EXHIBIT 10.7
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into effective as of April 21, 1998, by and between Technisource, Inc.,
a Florida corporation (the "Company"), and Xxxxx X. Xxxxxxxxx ("Shareholder").
RECITALS
A. Shareholder is a founder of the Company and owns 3,492,720
shares (the "Shares") of the Company's common stock, par value
$.01 per share (the "Common Stock"). The Company has agreed to
grant the Shareholder certain registration rights in
accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereto agree as follows:
1. DEFINITIONS. The following terms shall have the meanings set forth
below:
a. "COMMISSION" means the Securities and Exchange Commission, or any
other Federal agency at the time administering the Federal securities laws.
b. "CUTBACK REGISTRATION" means any registration in connection
with an underwritten public offering in which the managing underwriter advises
the Company that marketing factors require a limitation of the number of the
Company's securities to be underwritten in such public offering (including a
limitation to zero).
c. "1933 ACT" means the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
d. "1934 ACT" means the Securities Exchange Act of 1934 or any
similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
e. "REGISTRATION STATEMENT" means a registration statement
filed by the Company with the Commission for a public offering and sale of
securities of the Company (other than any registration statement that effects
the Company's initial public offering, any registration statement on Form S-4 or
Form S-8, or their successors, or any other form for a limited purpose, or any
registration statement covering only securities proposed to be issued in
exchange for securities or assets of another corporation or entity).
f. "REGISTRATION EXPENSES" means the expenses described in
Section 4.
g. "REGISTRABLE SHARES" means all of the Shares, and any other
shares of Common Stock or other securities of the Company or any other issuer
issued or issuable in respect of such Shares (because of stock splits, stock
dividends, reclassifications, recapitalizations, mergers, combinations or
similar events, if applicable); PROVIDED, HOWEVER, that the Shares which are
Registrable Shares shall cease to be Registrable Shares upon any sale or
transfer of such shares pursuant to a Registration Statement, Section 4(1) of
the 1933 Act, Rule 144 under the 1933 Act or otherwise, except that the Shares
which are Registrable Shares shall remain Registrable Shares notwithstanding any
transfer of the Shares to any of Shareholder's affiliates or by the Shareholder
or such affiliates to any member of the Shareholder's immediate family or to a
trust established for the benefit of the Shareholder or any family member of the
Shareholder or to any corporation or other entity which is wholly owned by the
Shareholder, such affiliates, such family members, or such trusts (Shareholder,
such affiliates, such family members such trusts and such entities referred to
herein collectively as "Permitted Transferees"). As a condition to effecting any
registration pursuant to this Agreement, the Company may require that any
Permitted Transferees, on whose behalf a registration hereunder is being
effected, execute an agreement further acknowledging their obligations under
Section 7 of this Agreement. All references in this Agreement to the term
"Shareholder" shall be read to include any Permitted Transferee that owns or
holds any Registrable Shares.
2. REGISTRATION RIGHTS.
a. REQUESTED REGISTRATION.
i. Subject to the other provisions of this Agreement, Shareholder
shall have the right (a "Request Right") to require the Company to effect an
aggregate of three registrations with respect to the Registrable Shares (each
such registration being a "Requested Registration"). (The Company is required to
effect a total of only three Requested Registrations pursuant to this Section
2(a) notwithstanding that Registrable Shares may have been transferred to one or
more Permitted Transferees.) To effect a Requested Registration, Shareholder
shall make a written request (a "Request Notice") to the Company which shall
describe in detail the contemplated sale of Registerable Securities, including
the number of Registerable Securities to be registered. The Company shall be
entitled to include in any Requested Registration shares of Common Stock to be
sold by holders of either Common Stock or rights to acquire Common Stock to whom
the Company has previously granted or in the future does grant any registration
rights and shares of Common Stock to be sold by the Company for its own account,
provided that such inclusion shall not limit the number of Registrable Shares
included in such Registration Statement.
ii. Shareholder may revoke its Request Notice in the event of a
Cutback Registration that would limit the total number of Registrable Shares
that can be sold pursuant to such Requested Registration to a number that is
less than 90% of the number of the Registrable Shares specified to be sold in
the Request Notice.
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iii. The Company shall, as soon as practicable, but in no event
more than 120 days after receipt of a Request Notice, file a Registration
Statement covering the Registrable Shares to be included in the registration
requested by such Request Notice and cause such Registration Statement to become
effective as soon as practicable thereafter.
b. PIGGYBACK REGISTRATION.
i. At any time and from time to time after the date of this
Agreement, whenever the Company proposes to file a Registration Statement, the
Company will prior to such filing give written notice to Shareholder of its
intention to do so and, upon the written request of Shareholder given within
fifteen (15) days after the Company provides such notice, the Company shall use
its good faith efforts to cause all Registrable Shares which the Company has
been requested by Shareholder to register to be registered under the 1933 Act to
the extent necessary to permit their sale or other disposition in accordance
with the intended methods of distribution specified in the request of
Shareholder; provided that the Company shall have the right to postpone or
withdraw any registration effected pursuant to this Section 2.b. without
obligation to Shareholder.
ii. In connection with any registration under Section 2.b.
involving an underwritten offering of the Company's securities, the Company
shall not be required to include any Registrable Shares in such underwriting
unless Shareholder accepts the terms of the underwriting as agreed upon between
the Company and the underwriters selected by it, and then only in such quantity
as will not, in the sole discretion of the underwriters, jeopardize the success
of the offering by the Company. If in the sole discretion of the managing
underwriter or underwriters the registration of all, or part of, the Registrable
Shares which Shareholder has requested to be included would adversely affect
such public offering, then the Company shall be required to include in the
underwriting only that number of Registrable Shares, if any, which the managing
underwriter or underwriters believe may be sold without causing such adverse
effect. If the number of Registrable Shares to be included in the underwriting
in accordance with the foregoing is less than the total number of shares which
Shareholder has requested to be included, then Shareholder and each participant
in such underwriting shall participate in the underwriting pro rata based upon
their total ownership of Registrable Shares.
3. REGISTRATION PROCEDURES. When the Company is required by the
provisions of this Agreement to effect the registration of any of the
Registrable Shares under the 1933 Act, the Company shall:
a. file with the Commission a Registration Statement with
respect to such Registrable Shares and use its best efforts to cause that
Registration Statement to become and remain effective;
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b. prepare and file with the Commission any amendments and
supplements to the Registration Statement and the prospectus included in the
Registration Statement as may be necessary to keep the Registration Statement
effective until the earlier to occur of (i) such time as all Registrable Shares
included therein have been sold or (ii) the expiration of two years;
c. furnish to Shareholder such reasonable numbers of copies of
the prospectus, including a preliminary prospectus and any amended or
supplemental prospectus, in conformity with the requirements of the 1933 Act,
and such other documents as Shareholder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares; and
d. use its best efforts to register or qualify the Registrable
Shares covered by the Registration Statement under the securities or Blue Sky
laws of such states as Shareholder shall reasonably request, and do any and all
other acts and things that may be necessary or desirable to enable Shareholder
to consummate the public sale or other disposition of the Registrable Shares
owned by Shareholder in such jurisdiction; PROVIDED, HOWEVER, that the Company
shall not be required in connection with this Section 3 to qualify as a foreign
corporation in any jurisdiction nor register or qualify the securities in any
state which as a condition to such registration or qualification would impose
material restrictions or other material conditions on the Company or any of its
officers, directors or shareholders (including with respect to any shares held
by such persons or entities) unless such restrictions or other conditions are
approved by the party adversely affected.
If the Company advises Shareholder that any preliminary or
final prospectus is no longer in compliance with the requirements of the 1933
Act, or that at such time it is otherwise a violation of any applicable
securities laws to offer or sell securities pursuant to a preliminary or final
prospectus, Shareholder shall immediately cease offering or selling the
Registrable Securities and, if requested, return all old prospectus to the
Company. Shareholder may recommence offers and sales of Registrable Securities
upon receipt from the Company of an amended prospectus, if applicable, or
receipt of ratification from the Company that the offer and sale of Registrable
Securities may resume.
4. ALLOCATION OF EXPENSES. The Company will pay all Registration
Expenses of all registrations under this Agreement. The term "Registration
Expenses" shall mean all expenses incurred by the Company in complying with this
Agreement, including, without limitation, all registration and filing fees,
exchange listing fees, printing expenses, fees and disbursements of counsel for
the Company, state Blue Sky fees and expenses, and the expense of any special
audits incident to or required by any such registration, but excluding
underwriting discounts and selling commissions attributable to the Registrable
Shares and the fees and expenses of Shareholder's own counsel and accountants,
which shall be borne by such party.
5. INFORMATION BY SHAREHOLDER. Shareholder shall promptly furnish to
the Company such information regarding Shareholder and the distribution proposed
by Shareholder as the Company may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Agreement.
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6. "LOCK-UP" AGREEMENT. If requested by the Company or an underwriter
or both in connection with an underwritten offering of Common Stock or other
securities of the Company, Shareholder shall agree not to sell or otherwise
transfer or dispose of any Registrable Shares or other securities of the Company
held by Shareholder for a specified period of time before and/or after the
effective date of a Registration Statement, provided that the same request shall
have been made of other holders of the Company's Common Stock or other
securities (including affiliates of the Company) and such other holders have
complied with such request. Such agreement shall be in writing in a form
satisfactory to the Company and any such underwriter. The Company may impose
stop transfer instructions with respect to the Registrable Shares or other
securities subject to the foregoing restriction until the end of the lock-up
period.
7. INDEMNIFICATION.
a. BY THE COMPANY. In the event of any registration of any of
the Registrable Shares under the 1933 Act pursuant to this Agreement, the
Company will indemnify and hold harmless the sellers of such Registrable Shares
against any losses, claims, damages or liabilities, joint or several, to which
such sellers may become subject under the 1933 Act, 1934 Act, state securities
laws or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
of any material fact contained in any Registration Statement under which such
Registrable Shares were registered under the 1933 Act, any preliminary
prospectus or final prospectus contained in the Registration Statement, or any
amendment or supplement to such Registration Statement, or arise out of or are
based upon the omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and the Company will
reimburse such sellers for any legal or any other expenses reasonably incurred
by such sellers in connection with investigating and defending any such loss,
claim, damage, liability or action; PROVIDED, HOWEVER, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon any untrue statement or
omission made in such Registration Statement, preliminary prospectus or
prospectus, or any such amendment or supplement, in reliance upon and in
conformity with information furnished to the Company by or on behalf of such
sellers, specifically for use in the preparation thereof, or as a result of the
failure of such sellers, or any agent of such sellers, to deliver any amendments
and supplements to any Registration Statement and the prospectus included in any
such Registration Statement (provided such amended or supplemental prospectus
has been delivered to sellers or their agent).
b. BY SELLERS OF REGISTRABLE SHARES. In the event of any
registration of any of the Registrable Shares under the 1933 Act pursuant to
this Agreement, each seller of Registrable Shares, severally and not jointly,
will indemnify and hold harmless the Company, each of its directors and officers
and each underwriter (if any) and each person, if any, who controls the Company
or any such underwriter within the meaning of the 1933 Act or the 1934 Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Company, such directors and officers, underwriter or controlling person may
become subject under the 1933 Act, 1934 Act, state securities laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement of
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a material fact contained in any Registration Statement under which such
Registrable Shares were registered under the 1933 Act, any preliminary
prospectus or final prospectus contained in the Registration Statement, or any
amendment or supplement to the Registration Statement, or arise out of or are
based upon any omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and each seller of Registrable Shares will reimburse the Company, each of its
directors and officers, each underwriter and each controlling person, severally
and not jointly, for any legal or other expenses reasonably incurred by the
Company, each director and officer, each underwriter and each controlling person
in connection with investigating and defending any such loss, claim, damage,
liability or action, if the statement or omission was made in reliance upon and
in conformity with information furnished to the Company by or on behalf of such
seller, specifically for use in connection with the preparation of such
Registration Statement, prospectus, amendment or supplement.
c. CLAIMS. Each party entitled to indemnification under this
Section 7 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; PROVIDED, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld); and, provided, further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 7. The Indemnified
Party may participate in such defense at such party's expense. No Indemnifying
Party, in the defense of any such claim or litigation, except with the consent
of the Indemnified Party, shall consent to entry of any judgment or enter into
any settlement, which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect of such claim or litigation.
8. MISCELLANEOUS.
a. GOVERNING LAW. This Agreement shall be governed in all respects
by the laws of the state of Florida.
b. SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.
c. ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement
constitutes the full and entire understanding and agreement between the parties
with regard to the subjects hereof. Neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated, except by a written instrument
signed by the Company and Shareholder.
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d. NOTICES, ETC. All notices and other communications required
or permitted hereunder shall be in writing and shall be mailed by United States
first-class mail, postage prepaid, or delivered personally by hand or nationally
recognized courier addressed as follows:
If to Shareholder:
Xxxxx Xxxxxxxxx
c/o Technisource, Inc.
0000 X. Xxxxxxx Xxxxx Xxxx
Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
If to the Company:
Technisource, Inc.
0000 X. Xxxxxxx Xxxxx Xxxx
Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
Facsimile No. (000) 000-0000
Attention:
or at such other address as a party shall have furnished to the other party in
writing. All such notices and other written communications shall be effective on
the earlier of the date of mailing or delivery.
e. SEPARABILITY. In case any provision of this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
f. TITLES AND SUBTITLES. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
g. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and all of which together
shall constitute one instrument.
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NOW THEREFORE, the parties hereto have executed this Agreement
effective as of the day and year first above written.
TECHNISOURCE, INC., a Florida corporation.
By: /S/ XXXXXX X. XXXXXXX
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Its: President
/S/ XXXXX X. XXXXXXXXX
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Xxxxx X. Xxxxxxxxx
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