Exhibit 10.3
HYPERCOM CORPORATION
COMMON STOCK
REGISTRATION RIGHTS AGREEMENT
August 13, 2003
To Each of the Purchasers Named
on the Signature Pages Hereof
Ladies and Gentlemen:
Xxxxxx X. Xxxxxxx (the "Seller") proposes to sell to the Purchasers (as
defined herein) upon the terms set forth in the Stock Purchase Agreement (as
defined herein) 7,000,000 shares of the common stock, par value $0.001 per share
(the "Securities") of Hypercom Corporation, a Delaware corporation (the
"Company"). As an inducement to the Purchasers to enter into the Stock Purchase
Agreement and in satisfaction of a condition to the obligations of the
Purchasers thereunder, the Company agrees with the Purchasers for the benefit of
holders (as defined herein) from time to time of the Registrable Securities (as
defined herein) as follows:
1. Definitions. (a) Capitalized terms used herein without definition
shall have the meanings ascribed thereto in the Stock Purchase Agreement. As
used in this Agreement, the following defined terms shall have the following
meanings:
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"Commission" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.
"Common Stock" means the Company's common stock, par value $0.001 per
share.
"Effectiveness Period" has the meaning assigned thereto in Section
2(b)(i) hereof.
"Effective Time" means the date on which the Commission declares the
Shelf Registration Statement effective or on which the Shelf Registration
Statement otherwise becomes effective.
"Electing Holder" has the meaning assigned thereto in Section 3(a)(ii)
hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
"holder" means, when used with respect to any Security, the record
holder of such Security.
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, conducted pursuant to Section 6 hereof.
"NASD Rules" means the Rules of the National Association of Securities
Dealers, Inc., as amended from time to time.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire, substantially in the form of Exhibit A
attached hereto, relating to the Securities.
"person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Securities Act)
included in the Shelf Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by the Shelf Registration Statement and by
all other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Company under the Exchange Act and incorporated
by reference therein.
"Purchasers" means the Purchasers named on the signature pages of the
Stock Purchase Agreement.
"Registrable Securities" means only those Securities which are actually
sold by the Seller to the Purchasers pursuant to the Stock Purchase Agreement,
and any security issued thereon as a stock dividend, stock split or
recapitalization; provided, however, that a security ceases to be a Registrable
Security when it is no longer a Restricted Security.
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"Restricted Security" means any Security except any such Security that
(i) has been registered pursuant to an effective registration statement under
the Securities Act and sold in a manner contemplated by the Shelf Registration
Statement, (ii) has been transferred in compliance with Rule 144 under the
Securities Act (or any successor provision thereto) or is transferable pursuant
to paragraph (k) of such Rule 144 (or any successor provision thereto) or (iii)
has otherwise been transferred and a new Security not subject to transfer
restrictions under the Securities Act has been delivered by or on behalf of the
Company.
"Rules and Regulations" means the published rules and regulations of
the Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Shelf Registration" means a registration effected pursuant to Section
2 hereof.
"Shelf Registration Statement" means a "shelf" registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission, filed by the Company pursuant to the
provisions of Section 2 of this Agreement, including the Prospectus contained
therein, any amendments and supplements to such registration statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such registration statement.
"Stock Purchase Agreement" means the Stock Purchase Agreement, dated as
of August 13, 2003, between the Seller, the Company and the Purchasers.
"underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.
2. Shelf Registration. (a) The Company shall, (1) use its commercially
reasonable best efforts to file with the Commission within 15 days, but in no
event later than 30 calendar days after the Closing of the Stock Purchase
Agreement, a Shelf Registration Statement relating to the offer and sale of the
Registrable Securities and (2) use its commercially reasonable best efforts to
cause such Shelf Registration Statement to be declared effective under the
Securities Act on or prior to 120 calendar days after the Closing Date;
provided, however, that no holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement or to use the Prospectus for
resales of Registrable Securities unless such holder is an Electing Holder.
(b) The Company shall use all reasonable efforts:
(i) to keep the Shelf Registration Statement continuously
effective in order to permit the Prospectus to be usable by holders for
resales of Registrable Securities until the earlier of (A) the sale
under the Shelf Registration Statement of all the Registrable
Securities registered thereunder and (B) all of the Securities ceasing
to
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be Restricted Securities (such period being referred to herein as the
"Effectiveness Period"); and
(ii) after the Effective Time, promptly upon the request of
any holder of Registrable Securities that is not then an Electing
Holder, to take any action reasonably necessary to enable such holder
to use the Prospectus for resales of Registrable Securities, including
without limitation any action necessary to identify such holder as a
selling securityholder in the Shelf Registration Statement; provided,
however, that nothing in this subparagraph shall relieve such holder of
the obligation to return a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(a) hereof.
3. Registration Procedures. In connection with the Shelf Registration
Statement, the following provisions shall apply:
(a) Not less than 30 calendar days prior to the Effective
Time, the Company shall mail the Notice and Questionnaire to the
holders of Registrable Securities. No holder shall be entitled to be
named as a selling securityholder in the Shelf Registration Statement
as of the Effective Time, and no holder shall be entitled to use the
Prospectus for resales of Registrable Securities at any time unless
such holder has returned a completed and signed Notice and
Questionnaire to the Company by the deadline for response set forth
therein; provided, however, holders of Registrable Securities shall
have at least 20 calendar days from the date on which the Notice and
Questionnaire is first mailed to such holders to return a completed and
signed Notice and Questionnaire to the Company.
(i) After the Effective Time, the Company shall, upon
the request of any holder of Registrable Securities that is
not then an Electing Holder, promptly send a Notice and
Questionnaire to such holder. The Company shall not be
required to take any action to name such holder as a selling
securityholder in the Shelf Registration Statement or to
enable such holder to use the Prospectus for resales of
Registrable Securities until such holder has returned a
completed and signed Notice and Questionnaire to the Company.
(ii) The term "Electing Holder" shall mean any holder
of Registrable Securities that has returned a completed and
signed Notice and Questionnaire to the Company in accordance
with Section 3(a) hereof.
(b) The Company shall furnish to each Electing Holder, counsel
to the Electing Holders, and the Managing Underwriters, if any, no
fewer than five Business Days prior to the initial filing of the Shelf
Registration Statement, a copy of such Shelf Registration Statement,
and shall furnish to such holders, counsel to such holders, and the
Managing Underwriters, if any, no fewer than two Business Days prior to
the filing of any amendment or supplement to the Prospectus, a copy of
such amendment or supplement and shall use all reasonable efforts to
reflect in each such document when so filed with the Commission such
comments as such holders and their respective counsel reasonably
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may propose; provided, however, that the Company shall make the final
decision as to the form and content of each such document. If any such
Shelf Registration Statement refers to any Electing Holder by name or
otherwise as the holder of any securities of the Company, then such
Electing Holder shall have the right to require (i) the insertion
therein of language, in form and substance reasonably satisfactory to
such Electing Holder, to the effect that the holding by such Electing
Holder of such securities is not to be construed as a recommendation by
such Electing Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that
such Electing Holder will assist in meeting any future financial
requirements of the Company or (ii) in the event that such reference to
such Electing Holder by name or otherwise is not required by the
Securities Act or any similar Federal statute then in force, the
deletion of the reference to such Electing Holder in any amendment or
supplement to the Registration Statement filed or prepared subsequent
to the time that such reference ceases to be required.
(c) From the date hereof until the end of the Effective
Period, the Company shall (subject to paragraph (j) below) promptly
take such action as may be necessary so that (i) each of the Shelf
Registration Statement and any amendment thereto and the Prospectus and
any amendment or supplement thereto (and each report or other document
incorporated by reference therein in each case) complies in all
material respects with the Securities Act and the Exchange Act and the
respective rules and regulations thereunder, (ii) each of the Shelf
Registration Statement and any amendment thereto does not, when it
becomes effective, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading and (iii) each of the
Prospectus and any amendment or supplement to the Prospectus does not
at any time during the Effectiveness Period include an untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) The Company shall promptly advise each Electing Holder,
and shall confirm such advice in writing if so requested by any such
holder (which notice pursuant to clauses (ii) through (iv) hereof shall
be accompanied by an instruction to suspend the use of the Prospectus
until the requisite changes have been made):
(i) when the Shelf Registration Statement and any
amendment thereto has been filed with the Commission and when
the Shelf Registration Statement or any post-effective
amendment thereto has become effective;
(ii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Shelf Registration
Statement or the initiation of any proceedings for such
purpose;
(iii) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the securities included in the Shelf
Registration
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Statement for sale in any jurisdiction or the initiation of
any proceeding for such purpose; and
(iv) if changes in the Shelf Registration Statement
or the Prospectus are required in order that the Shelf
Registration Statement and Prospectus do not contain an untrue
statement of a material fact and do not omit to state a
material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not
misleading.
(e) The Company shall use all reasonable efforts to prevent
the issuance, and if issued to obtain the withdrawal, of any order
suspending the effectiveness of the Shelf Registration Statement at the
earliest possible time.
(f) The Company shall furnish to each requesting Electing
Holder, without charge, at least one copy of the Shelf Registration
Statement and all post-effective amendments thereto, including
financial statements and schedules, and, if such holder so requests in
writing, all reports, other documents and exhibits that are filed with
or incorporated by reference in the Shelf Registration Statement.
(g) The Company shall, during the Effectiveness Period,
deliver to each Electing Holder, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) and any amendment or
supplement thereto as such Electing Holder may reasonably request; and
the Company consents (except during the continuance of any event
described in Section 3(d)(iv) above or any pending corporate
development described in Sections 3(j) and 6 below) to the use of the
Prospectus and any amendment or supplement thereto by each of the
Electing Holders in connection with the offering and sale of the
Registrable Securities covered by the Prospectus and any amendment or
supplement thereto during the Effectiveness Period.
(h) Prior to any offering of Registrable Securities pursuant
to the Shelf Registration Statement, the Company shall (i) register or
qualify or cooperate with the Electing Holders and a single counsel for
the Electing Holders in connection with the registration or
qualification of such Registrable Securities for offer and sale under
the securities or "blue sky" laws of such jurisdictions within the
United States as any Electing Holder may reasonably request, (ii) keep
such registrations or qualifications in effect and comply with such
laws so as to permit the continuance of offers and sales in such
jurisdictions for so long as may be necessary to enable any Electing
Holder or underwriter, if any, to complete its distribution of
Registrable Securities pursuant to the Shelf Registration Statement,
and (iii) take any and all other actions necessary or advisable to
enable the disposition in such jurisdictions of such Registrable
Securities; provided, however, that in no event shall the Company be
obligated to (A) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required
to so qualify but for this Section 3(h) or (B) file any general consent
to service of process in any jurisdiction where it is not as of the
date hereof so subject.
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(i) The Company shall cooperate with the Electing Holders to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold pursuant to the Shelf
Registration Statement, which certificates shall not bear any
restrictive legends and shall meet the requirements of any securities
exchange on which the Company's Common Stock is then listed and which
certificates shall be in such permitted denominations and registered in
such names as Electing Holders may request in connection with the sale
of Registrable Securities pursuant to the Shelf Registration Statement.
(j) Upon the occurrence of any fact or event contemplated by
paragraph 3(d)(iv) above, the Company shall (subject to the next
sentence) promptly prepare a post-effective amendment or supplement to
the Shelf Registration Statement or the Prospectus, or any document
incorporated therein by reference, or file any other required document
so that, as thereafter delivered to purchasers of the Registrable
Securities included therein, the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the
Company notifies the Electing Holders in accordance with clauses (ii)
through (iv) of paragraph 3(d) above to suspend the use of the
Prospectus until the requisite changes to the Prospectus have been
made, then each Electing Holder shall suspend the use of the Prospectus
until (i) such Electing Holder has received copies of the supplemented
or amended Prospectus contemplated by the preceding sentence or (ii)
such Electing Holder is advised in writing by the Company that the use
of the Prospectus may be resumed and has received copies of any
additional or supplemental filings that are incorporated by reference
in the Prospectus. Notwithstanding the foregoing, the Company shall not
be required to amend or supplement the Shelf Registration Statement,
any related Prospectus or any document incorporated by reference for a
period not to exceed 60 consecutive days (or 120 days in the aggregate
in any calendar year) if there occurs or exists any pending corporate
development the disclosure of which would, in the judgment of the
Company, be harmful to the business, operations, prospects, or
condition (financial or otherwise) of the Company and its subsidiaries,
taken as a whole.
(k) The Company shall use all reasonable efforts to comply
with all applicable Rules and Regulations, and to make generally
available to its securityholders as soon as practicable, but in any
event not later than eighteen months after (i) the effective date (as
defined in Rule 158(c) under the Securities Act) of the Shelf
Registration Statement, (ii) the effective date of each post-effective
amendment to the Shelf Registration Statement, and (iii) the date of
each filing by the Company with the Commission of an Annual Report on
Form 10-K that is incorporated by reference in the Shelf Registration
Statement, an earnings statement of the Company and its subsidiaries
complying with Section 11(a) of the Securities Act and the Rules and
Regulations of the Commission thereunder (including, at the option of
the Company, Rule 158).
(l) In the event of an underwritten offering conducted
pursuant to Section 6 hereof, the Company shall (subject to paragraph
3(j) above), if requested, promptly include or incorporate in a
Prospectus supplement or post-effective amendment to the
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Shelf Registration Statement such information as the Managing
Underwriters reasonably agree should be included therein and to which
the Company does not reasonably object and shall (subject to paragraph
3(j) above) make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after it is notified of
the matters to be included or incorporated in such Prospectus
supplement or post-effective amendment.
(m) The Company shall enter into such customary agreements
(including an underwriting agreement in customary form in the event of
an underwritten offering conducted pursuant to Section 6 hereof) and
take all other appropriate action in order to expedite and facilitate
the registration and disposition of the Registrable Securities, and in
connection therewith, if an underwriting agreement is entered into,
cause the same to contain indemnification provisions and procedures
substantially identical to those set forth in Section 5 hereof with
respect to all parties to be indemnified pursuant to Section 5 hereof;
provided, however, the Company shall not be required to facilitate an
underwritten offering pursuant to the Shelf Registration Statement by
any holders unless the offering relates to at least 25% of the
Securities sold pursuant to the Stock Purchase Agreement.
(n) The Company shall:
(i) (A) make reasonably available for inspection by
requesting Electing Holders, any underwriter participating in
any disposition pursuant to the Shelf Registration Statement,
and any attorney selected in accordance with Section 4(b)
hereof, one accountant and any other agent retained by such
holders or any such underwriter all relevant financial and
other records, pertinent corporate documents and properties of
the Company and its subsidiaries and (B) cause the Company's
officers, directors and employees to supply all information
reasonably requested by such holders or any such underwriter,
attorney, accountant or agent in connection with the Shelf
Registration Statement, in each case, as is customary for
similar due diligence examinations; provided, however, that
all records, information and documents that are designated in
writing by the Company, in good faith, as confidential shall
be kept confidential by such holders and any such underwriter,
attorney, accountant or agent, unless such disclosure is made
in connection with a court proceeding or required by law, or
such records, information or documents become available to the
public generally or through a third party without an
accompanying obligation of confidentiality; and provided,
further that, if the foregoing inspection and information
gathering would otherwise disrupt the Company's conduct of its
business, such inspection and information gathering shall, to
the greatest extent possible, be coordinated on behalf of the
requesting Electing Holders and the other parties entitled
thereto by one counsel designated by and on behalf of Electing
Holders and other parties;
(ii) in connection with any underwritten offering
conducted pursuant to Section 6 hereof, make such
representations and warranties to the Electing Holders
participating in such underwritten offering and to the
Managing Underwriters, in
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form, substance and scope as are customarily made by the
Company to underwriters in primary underwritten offerings of
equity securities;
(iii) in connection with any underwritten offering
conducted pursuant to Section 6 hereof, obtain opinions of
counsel to the Company (which counsel and opinions (in form,
scope and substance) shall be reasonably satisfactory to the
Managing Underwriters) addressed to each requesting Electing
Holder, covering such matters as are customarily covered in
opinions requested in primary underwritten offerings of equity
securities (it being agreed that the matters to be covered
shall include, without limitation, as of the date of the
opinion and as of the Effective Time or the date of the most
recent post-effective amendment thereto, as the case may be,
comment of such counsel as to the absence, to such counsel's
knowledge, from the Shelf Registration Statement and the
Prospectus, including the documents incorporated by reference
therein, of an untrue statement of a material fact or the
omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they
were made,) not misleading;
(iv) in connection with any underwritten offering
conducted pursuant to Section 6 hereof, obtain "cold comfort"
letters and updates thereof from the independent public
accountants of the Company (and, if necessary, from the
independent public accountants of any subsidiary of the
Company or of any business acquired by the Company for which
financial statements and financial data are, or are required
to be, included in the Shelf Registration Statement),
addressed to each requesting Electing Holder (if such Electing
Holder has provided such letter, representations or
documentation, if any, required for such cold comfort letter
to be so addressed) and the underwriters, in customary form
and covering matters of the type customarily covered in "cold
comfort" letters in connection with primary underwritten
offerings;
(v) in connection with any underwritten offering
conducted pursuant to Section 6 hereof, deliver such documents
and certificates as may be reasonably requested by any
Electing Holders and the Managing Underwriters, if any,
including without limitation certificates to evidence
compliance with Section 3(j) hereof and with any conditions
contained in the underwriting agreement or other agreements
entered into by the Company in connection therewith.
(o) The Company will use all reasonable efforts to cause the
Securities to be listed on the New York Stock Exchange or other stock
exchange or trading system, if any, on which the Common Stock primarily
trades on or prior to the Effective Time.
(p) The Company shall use all reasonable efforts to take all
other steps necessary to effect the registration, offering and sale of
the Registrable Securities covered by the Shelf Registration Statement
contemplated hereby
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(r) On or prior to the Effective Time, the Company shall cause
the transfer agent to remove the restrictive legends on all Registrable
Securities eligible for sale under the Shelf Registration Statement so
that they are freely tradable.
4. Registration Expenses. (a) All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by it whether or not any Shelf Registration Statement is filed or becomes
effective and whether or not any securities are issued or sold pursuant to any
Shelf Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including without limitation fees and expenses (A) with respect to filings
required to be made with the National Association of Securities Dealers, Inc.
and (B) in compliance with securities or Blue Sky laws (including without
limitation and in addition to that provided for in (b) below, reasonable fees
and disbursements of counsel for the underwriters or counsel for the holders of
Registrable Securities in connection with Blue Sky qualifications of the
Registrable Securities )), (ii) printing expenses (including without limitation
expenses of printing certificates for Registrable Securities and of printing
Prospectuses if the printing of Prospectuses is requested by the Managing
Underwriters, if any), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company and one counsel for the
holders of Registrable Securities, in accordance with the provisions of Section
4(b) hereof, (v) fees and disbursements of all independent certified public
accountants referred to in Section 3(n)(iv) hereof (including without limitation
the expenses of any special audit and "cold comfort" letters required by or
incident to such performance), (vi) Securities Act liability insurance, if the
Company desires such insurance, and (vii) fees and expenses of all other persons
retained by the Company. In addition, the Company shall pay its internal
expenses (including without limitation all salaries and expenses of its officers
and employees performing legal or accounting duties), the expense of any annual
audit, and the fees and expenses incurred in connection with the listing of the
Securities on the New York Stock Exchange. Notwithstanding the foregoing or
anything in this Agreement to the contrary, each holder of the Registrable
Securities being registered shall pay all commissions, placement agent fees and
underwriting discounts and commissions with respect to any Registrable
Securities sold by it and the fees and disbursements of any counsel or other
advisors or experts retained by such holders (severally or jointly), other than
counsel referred to in clause (iv) above.
(b) In connection with any registration hereunder, the Company shall
reimburse the holders of the Registrable Securities being registered in such
registration for the reasonable fees and disbursements of not more than one
counsel chosen by the holders of a majority of the Registrable Securities for
whose benefit the applicable Shelf Registration Statement is being prepared.
5. Indemnification and Contribution.
(a) Indemnification by the Seller and the Company. Upon the
registration of the Registrable Securities pursuant to Section 2 hereof, the
Seller and the Company shall each indemnify and hold harmless each Electing
Holder and each underwriter, selling agent or other securities professional, if
any, which facilitates the disposition of Registrable Securities, and each of
their respective officers and directors and each person who controls such
Electing Holder,
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underwriter, selling agent or other securities professional within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act (each such
person being sometimes referred to as an "Indemnified Person") against any
losses, claims, damages or liabilities, joint or several, to which such
Indemnified Person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Shelf Registration Statement or
any Prospectus contained therein or furnished by the Company to any Indemnified
Person, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading, and the Company
hereby agrees to reimburse such Indemnified Person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable to any such Indemnified Person in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such Shelf Registration Statement or
Prospectus, or amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Indemnified Person expressly for use therein; provided, further, however,
that the foregoing indemnity agreement with respect to any Prospectus shall not
inure to the benefit of any Indemnified Person who failed to deliver a final
Prospectus or an amendment or supplement thereto (provided by the Company to the
several Indemnified Persons in the requisite quantity and on a timely basis to
permit proper delivery on or prior to the relevant transaction date) to the
person asserting any losses, claims, damages and liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, if such material misstatement or omission or alleged
material misstatement or omission was cured in the final Prospectus or an
amendment or supplement thereto.
(b) Indemnification by the Holders and any Agents and Underwriters.
Each Electing Holder agrees, as a consequence of the inclusion of any of such
holder's Registrable Securities in any Shelf Registration Statement, and each
underwriter, selling agent or other securities professional, if any, which
facilitates the disposition of Registrable Securities shall agree, as a
consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors, officers who sign such Shelf Registration Statement and each person,
if any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities to which the Company or such other persons may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in such Shelf Registration Statement or Prospectus, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
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necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such holder, underwriter, selling agent or other securities professional
expressly for use therein and (ii) reimburse the Company and its directors and
officers who sign such Shelf Registration Statement for any legal or other
expenses reasonably incurred by the Company and such directors and officers in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) of this Section 5 of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under this Section 5, notify
such indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section 5.
In case any such action shall be brought against any indemnified party and it
shall notify an indemnifying party of the commencement thereof, such
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, such indemnifying party shall not be liable to such indemnified
party under this Section 5 for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, which consent will not be unreasonably withheld, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) Contribution. If the indemnification provided for in this Section 5
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) of this Section 5 in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information about such
indemnifying party or indemnified party supplied
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by such indemnifying party or by such indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 5(d) were
determined by pro rata allocation (even if the Electing Holders or any
underwriters, selling agents or other securities professionals or all of them
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 5(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the Electing
Holders and any underwriters, selling agents or other securities professionals
in this Section 5(d) to contribute shall be several in proportion to the
percentage of Registrable Securities registered or underwritten, as the case may
be, by them and not joint.
(e) Notwithstanding any other provision of this Section 5, in no event
will any (i) Electing Holder be required to undertake liability to any person
under this Section 5 for any amounts in excess of the dollar amount of the
proceeds to be received by such holder from the sale of such holder's
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to any Shelf Registration Statement and (ii)
underwriter, selling agent or other securities professional be required to
undertake liability to any person hereunder for any amounts in excess of the
discount, commission or other compensation payable to such underwriter, selling
agent or other securities professional with respect to the Registrable
Securities underwritten by it and distributed to the public.
(f) The obligations of the Company and Seller under this Section 5
shall be in addition to any liability that the Company and the Seller may
otherwise have to any Indemnified Person and the obligations of any Indemnified
Person under this Section 5 shall be in addition to any liability that such
Indemnified Person may otherwise have to the Company. The remedies provided in
this Section 5 are not exclusive and shall not limit any rights or remedies that
may otherwise be available to an indemnified party at law or in equity.
6. Underwritten Offering. Any holder of Registrable Securities who
desires to do so may sell Registrable Securities (in whole or in part) in an
underwritten offering; provided, however, the Company shall not be required to
facilitate an underwritten offering pursuant to the Shelf Registration Statement
by any holders unless the offering relates to at least 25% of the Securities
sold pursuant to the Stock Purchase Agreement. In any such underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering will be selected by, and the underwriting
arrangements with respect thereto (including the size of the offering) will be
approved by, the holders of a majority of the Registrable Securities to be
included in such offering; provided, however, that such investment bankers and
managers and underwriting arrangements must be reasonably satisfactory to the
Company. No holder may participate in any underwritten offering contemplated
hereby unless (a) such holder agrees to sell such holder's Registrable
Securities to be included in the
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underwritten offering in accordance with any approved underwriting arrangements,
(b) such holder completes and executes all reasonable questionnaires, powers of
attorney, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such approved underwriting arrangements
and (c) if such holder is not then an Electing Holder, such holder returns a
completed and signed Notice and Questionnaire to the Company in accordance with
Section 3(a) hereof within a reasonable amount of time before such underwritten
offering. The holders participating in any underwritten offering shall be
responsible for any underwriting discounts and commissions and fees and, subject
to Section 4 hereof, expenses of their own counsel. The Company shall pay all
expenses customarily borne by issuers, including but not limited to filing fees,
the fees and disbursements of its counsel and independent public accountants and
any printing expenses incurred in connection with such underwritten offering.
Notwithstanding the foregoing, upon receipt of a request from the Managing
Underwriter or a representative of holders of a majority of the Registrable
Securities to be included in an underwritten offering to prepare and file an
amendment or supplement to the Shelf Registration Statement and Prospectus in
connection with an underwritten offering, the Company may delay the filing of
any such amendment or supplement for up to 60 days if there occurs or exists any
pending corporate development the disclosure of which would, in the judgment of
the Company, be harmful to the business, operations, prospects, or condition
(financial or otherwise) of the Company and its subsidiaries, taken as a whole..
7. Rules 144 and 144A.
The Company agrees, for so long as any Registrable Securities remain
outstanding and during any period in which the Company (a) is not subject to
Section 13 of 15(d) of the Exchange Act, to make available, upon request of any
holder of Registrable Securities, to such holder or beneficial owner of
Registrable Securities in connection with any sale thereof and any prospective
purchaser of such Registrable Securities designated by such holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Securities Act in
order to permit resales of such Registrable Securities pursuant to Rule 144A of
the Securities Act, and (b) is subject to Section 13 of 15 (d) of the Exchange
Act, to make all filings required thereby in a timely manner in order to permit
resales of such Registrable Securities pursuant to Rule 144 of the Securities
Act.
8. Miscellaneous.
(a) Remedies. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under this Agreement may result in
material irreparable injury to the Purchasers or the holders of Registrable
Securities for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Purchasers or any holder of Registrable Securities may
obtain such relief as may be required to specifically enforce the Company's
obligations hereunder. The Company further agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(b) Other Registration Rights. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the
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rights granted to the holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof. The Company shall not permit any
securities other than the Registrable Securities to be included in any Shelf
Registration Statement hereunder. The rights granted to the holders of
Registrable Securities hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's securities
under any agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 2
hereof and this Section 8(c)(i), the Company has obtained the written consent of
holders of all outstanding Registrable Securities and (ii) in the case of all
other provisions hereof, the Company has obtained the written consent of holders
of a majority of the Registrable Securities (excluding Registrable Securities
held by the Company or its Affiliates). Notwithstanding the foregoing, a waiver
or consent to departure from the provisions hereof that relates exclusively to
the rights of holders whose Registrable Securities are being sold pursuant to a
Shelf Registration Statement and that does not affect directly or indirectly the
rights of other holders of Registrable Securities may be given by the holders of
a majority of Registrable Securities being sold by such holders pursuant to such
Shelf Registration Statement.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be given as provided in the Stock Purchase Agreement.
(e) Parties in Interest. The parties to this Agreement intend that all
holders of Registrable Securities shall be entitled to receive the benefits of
this Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities that are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto and any holder from time to time of the Registrable
Securities to the aforesaid extent. In the event that any transferee of any
holder of Registrable Securities shall acquire Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be entitled
to receive the benefits of and, if an Electing Holder, be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement to the aforesaid extent.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning, construction
or interpretation hereof.
(h) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to
provisions relating to
-15-
conflicts of law to the extent the application of the laws of another
jurisdiction would be required thereby.
(i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
(j) Survival. The respective indemnities, agreements, representations,
warranties and other provisions set forth in this Agreement or made pursuant
hereto shall remain in full force and effect, regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any
Electing Holder, any director, officer or partner of such holder, any agent or
underwriter, any director, officer or partner of such agent or underwriter, or
any controlling person of any of the foregoing, and shall survive the transfer
and registration of the Registrable Securities of such holder.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted with respect to the Registrable Securities. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
Please confirm by signing in the space provided below that the
foregoing correctly sets forth the agreement between the Company and you.
Very truly yours,
HYPERCOM CORPORATION
By:
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Name:
Title:
XXXXXX XXXXXXX
-----------------------
Xxxxxx Xxxxxxx
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REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE
Accepted and Agreed
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Name (Print)
By:
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Name:
Title:
Date:
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Address:
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Telephone:
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Facsimile:
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