REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
November 23, 1998, is entered into by and among XXXXX ENTERPRISES, INCORPORATED,
a Florida corporation ("Sykes"), Xxxxx X. Xxxxxxxxx and Xxxxxxx Xxxxxxxxx, each
an individual residing in the Federal Republic of Germany (collectively, the
"Sellers").
WHEREAS, this Agreement is made in connection with the sale by the
Sellers of all the outstanding capital interests (the "Quotas") of TAS GmbH
NORD) Telemarketing und Vertriebsberatung. a limited liability company organized
under the laws of the Federal Republic of Germany (the "Company"), to Xxxxx
Enterprises GmbH, a limited liability company organized under the laws of the
Federal Republic of Germany and a wholly-owned subsidiary of Sykes (the
"Buyer"), pursuant to the Acquisition Agreement dated November 23, 1998 by and
among Sykes, the Buyer and the Sellers (the "Acquisition Agreement");
WHEREAS, in order to induce the Sellers to enter into the Acquisition
Agreement. Sykes has agreed to provide the Sellers with the registration rights
set forth in this Agreement; and
WHEREAS, the execution and delivery of this Agreement is a condition to
the sale of the Quotas to the Buyer.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
1. Definitions.
-----------
Closing: The closing of the transactions contemplated by the Acquisi-
tion Agreement.
Common Stock: The common stock, par value $.01 per share, of Sykes.
Date of Issuance: The Closing Date (as defined in the Acquisition
Agreement).
Holder: A Seller so long as such Seller owns any Registrable Securities
and any of such Seller's respective successors and assigns who acquire rights in
accordance with this Agreement with respect to Registrable Securities directly
or indirectly from such Seller, or from such other successor and assign, and who
agree in writing, in form and substance satisfactory to Sykes, to be bound
hereby.
Registration Expenses: Any and all reasonable expenses actually
incurred incident to performance of or compliance with this Agreement other than
underwriting discounts and commissions and transfer taxes, if any, but including
up to $5,000 in the aggregate of the legal expenses of the Holders incurred with
respect to the registration of Registrable Securities.
Registrable Securities: The shares constituting the Subject Common
Stock; provided, however, that specific shares of the Subject Common Stock shall
not be Registrable Securities if and to the extent that (i) a Registration
Statement with respect to such shares of Subject Common Stock shall have been
declared effective under the Securities Act and such shares of Subject Common
Stock shall have been disposed of in accordance with such Registration State-
ment, (ii) such shares of Subject Common Stock shall have been distributed to
the public in accordance with Rule 144 (or any successor provision) promulgated
under the Securities Act, (iii) such shares of Subject Common Stock shall have
been otherwise transferred in accordance with the provisions of this Agreement
and the Acquisition Agreement, and new certificates for them not bearing a
legend restricting further transfer shall have been delivered by Sykes, or
(iv) the transfer of such shares of Subject Common Stock is prohibited by
Section 4.28(1) of the Acquisition Agreement.
Registration Statement: Any registration statement of Sykes tiled with
the SEC which provides for the registration for sale or other transfer of the
Registrable Securities (in whole or in part), including the prospectus included
therein, all amendments and any supplements to such Registration Statement,
including post-effective amendments, all exhibits and all material incorporated
by reference in such Registration Statement.
SEC: The United States Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended from time to
time, or any successor statute, and the rules and regulations of the SEC
thereunder, all as in effect at the time.
Subject Common Stock: The shares of Common Stock issued to the
Sellers pursuant to the Acquisition Agreement and any additional shares of
Common Stock or shares of any other security of Sykes issued in respect of such
shares, by way of stock splits, stock dividends, or otherwise.
2. Registration under the Securities Act.
-------------------------------------
(a) Registration on Demand.
----------------------
(i) Request for Registration. At any time during the period
beginning on the sixtieth day after the Date of Issuance and ending on the first
anniversary of the Date of Issuance and subject to Sections 2(c) and 2(d), the
Holder or Holders of a majority of the Registrable Securities then outstanding
may, by written notice to Sykes, require Sykes to effect the registration under
the Securities Act of Registrable Securities (a "Demand Registration"). The
notice requesting a Demand Registration shall specify the method of distribution
of the Registrable Securities to be covered. Upon receipt of such notice, Sykes
will promptly give written notice of such requested registration ( a "Section
2(a) Notice") to any and all other Holders who hold of record any Registrable
Securities and thereupon will file a Registration Statement in form and scope
sufficient to permit, under the Securities Act and any other applicable law and
regulations, the Registrable Securities to be registered in accordance with the
methods of distribution specified in such requests (the "Demand Registration
Statement"). Sykes shall use its best efforts to have the Demand Registration
Statement declared effective as promptly as practicable (but in no event later
than 120 days after such request) and to keep the Demand Registration Statement
continuously effective until the first anniversary of the Date of Issuance or,
if shorter, until such time as all the Registrable Securities covered by the
Demand Registration Statement have been sold pursuant thereto. The Demand
Registration Statement shall provide for the registration under the Securities
Act of:
(A) the Registrable Securities which Sykes has been so
requested to register by such Holder or Holders, and
(B) all other Registrable Securities which Sykes has been
requested to register by any other Holders of Registrable Securities by written
request (specifying the intended method of distribution thereof) given to Sykes
within 15 days after the giving of the Section 2(a) Notice.
Sykes may on one occasion only postpone filing a Demand Registration Statement
under this Section 2(a) for a reasonable period (not in excess of 90 days) if in
its reasonable judgment xx.xx filing would require the disclosure of material
information that Sykes has a bona tide business purpose for preserving as
confidential. Sykes shall be obligated to effect a Demand Registration pursuant
to this Section 2(a) only once.
(ii) Registration Statement Form. Registrations under this
Section 2(a) shall be on such appropriate registration forms of the SEC as shall
be selected by Sykes, be reasonably acceptable to the Holder or Holders who are
the registered holders of at least a majority of the Registrable Securities to
be registered pursuant to this Section 2(a) and permit the disposition of
Registrable Securities in accordance with the intended method or methods of
disposition specified in the requests for registration relating thereto.
(iii) Expenses. Sykes shall pay all Registration Expenses in
connection with the registration pursuant to this Section 2(a) and the Holder or
Holders requesting registration pursuant to this Section 2(a) shall pay all
underwriting discounts and commissions, any transfer taxes and any expenses of
counsel for any Holder or Holders not expressly included in Registration
Expenses relating to the sale or disposition of such Holder's Registrable
Securities pursuant to such Registration Statement.
(iv) Effective Registration Statement. A registration requested
pursuant to Section 2(a) hereof will not be deemed to have been effected unless
it has been declared effective by the SEC and not less than eighty-five percent
(85%) of the Registrable Securities covered thereby are sold in accordance with
the terms and conditions set forth therein; provided, however, that if, after it
has been declared effective, the offering of Registrable Securities pursuant to
such registration is interfered with by a stop order, injunction or other order
or requirement of the SEC or any other governmental agency or court, such
registration will be deemed not to have become effective or to have been
effected.
(v) Selection of Underwriter. If any of the Registrable
Securities covered by the Demand Registration are to be sold in an underwritten
offering, Sykes shall select the underwriter or underwriters in its sole discre-
tion. Sykes and the Holders will take all reasonable steps to cooperate with the
underwriter or underwriters so selected to conduct the offering in a manner
customary for such underwritten offering, including without limitation entering
into an underwriting agreement with such underwriters.
(vi) Registration Not Required. Notwithstanding the other
provisions of Section 2(a), Sykes shall not be required to effect a Demand
Registration under this Section 2(a):
(A) after Sykes has delivered notice of a Piggyback
Registration pursuant to Section 2(b) and for so long as such Piggyback
Registration is pending;
(B) for Registrable Securities owned by any Holder that did
not, by delivering the requisite notice, exercise its right to register such
Registrable Securities in a Piggyback Registration when so offered by Sykes
under Section 2(b); or
(C) if the Demand Registration covers Registrable
Securities with an aggregate market value of less than $250,000 or which
represent less than a majority of the Registrable Securities then outstanding.
(b) Piggyback Registrations.
-----------------------
(i) Right to Piggyback. Subject to Sections 2(c) and 2(d)
hereof, if at any time prior to the first anniversary of the Date of Issuance
Sykes proposes to file a Registration Statement under the Securities Act with
respect to any offering of the Common Stock by Sykes for its own account and/or
on behalf of any of its security holders (other than (i) a registration on Form
S-8 or S4 or any successor form, (ii) a registration relating to a transaction
subject to Rule 145 under the Securities Act, or (iii) any registration of
securities as it relates to an offering and sale to management of Sykes pursuant
to any employee stock plan or other employee benefit plan arrangement) then, as
soon as practicable (but in no event less than twenty (20) days prior to the
proposed date of filing such Registration Statement), Sykes shall give written
notice of such proposed filing to the Holders, and such notice shall offer the
Holders the opportunity to register such number of Registrable Securities as the
Holders may request (a "Piggyback Registration"). Subject to subsection 2(d),
Sykes shall include in such Registration Statement all Registrable Securities
requested within fifteen (15) days after the receipt of any such notice (which
request shall specify the Registrable Securities intended to be disposed of by
the Holders to be included in the registration for such offering pursuant to a
Piggyback Registration), provided, however, that if, at any time after giving
written notice of its intention to register Common Stock and prior to the
effective date of the Registration Statement filed in connection with such
registration, Sykes shall determine for any reason not to register or to delay
registration of the Common Stock to be registered for sale by Sykes, Sykes may,
at its election, give written notice of such determination to the Holder of
Registrable Securities and, thereupon, (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith), and (ii) in the case of
a determination to delay registering, shall be permitted to delay registering
any Registrable Securities, for the same period as the delay in registering such
Common Stock.
(ii) Piggyback Expenses. The Registration Expenses of the Holders
of Registrable Securities will be paid by Sykes in a Piggyback Registration.
Underwriting discounts and commissions and transfer taxes, if any, incurred with
respect to the Registrable Securities shall be borne by the Sellers.
(c) Underwriter's Cutback. Notwithstanding Sections 2(a) and 2(b), if
a Demand Registration or a Piggyback Registration is an underwritten offering
being made on behalf of Sykes, and the managing underwriter or underwriters
advise Sykes in writing that in their opinion the number of shares of Common
Stock requested to be included in such registration exceeds the number which can
be sold in such offering or would be reasonably likely to adversely affect the
price or distribution of the Common Stock offered in such offering or the timing
thereof, then the shares of Common Stock to be included in such registration
shall be the number of shares of Common Stock, adjusted on a pro rata basis,
that, in the opinion of such underwriter or underwriters, can be sold without an
adverse effect on the price, timing or distribution of the Common Stock to be
included. In an underwritten demand registration, the number of shares to be
sold by Sykes or other selling shareholders shall be reduced in accordance with
such opinion and, if necessary, eliminated, before there shall be any reduction
in the number of shares to be sold by Holders.
(d) Registration Not Required. Notwithstanding Sections 2(a) and
2(b), in the event the Holder or Holders request that any of the Registrable
Securities covered by this Agreement be sold in an underwritten offering or
otherwise request registration pursuant to this Agreement, Sykes shall not be
required to take the action required or contemplated herein to accommodate or
permit such underwritten offering or other registration of the shares subject to
the request if Sykes has provided to the requesting Holders an unqualified
opinion of counsel knowledgeable in Securities Act matters to the effect that
all of such Registrable Securities may immediately be sold by such Holders in a
brokered transaction under Rule 144 during any ninety (90) day period without
registration under the Securities Act and applicable state securities laws.
3. Hold-Back Agreements.
--------------------
(a) Restrictions on Public Sale by the Holders. In the event
Registrable Securities are covered by a Registration Statement tiled pursuant to
Section 2 of this Agreement, the Holders agree not to effect any public sale or
distribution of Common Stock, including a sale pursuant to Rule 144 under the
Securities Act, during the 15-day period prior to, and during the 90-day period
beginning on, the effective date of such Registration Statement (except pursuant
to such Registration Statement), if, and then only to the extent, so requested
in writing by Sykes, in the case of a non-underwritten public offering, or by
the managing underwriter or underwriters, in the case of an underwritten
offering.
(b) Restrictions on Public Security Sale by Sykes. Sykes agrees not
to make any filing to register and agrees not to effect or offer to effect any
public sale or distribution of or purchase any security (other than any such
sale or distribution of such Common Stock in connection with any transaction
subject to Rule 145 under the Securities Act or in connection with offers and
sales to employees under employee benefit plans) during the IS-day period prior
to, and during the 90-day period beginning on, the effective date of any
Registration Statement filed pursuant to Section 2(a) hereof.
4. Registration Procedures. In connection with Sykes' obligations under
Section 2 hereof, Sykes shall use it best efforts to effect or cause to be
effected the registration of the Registrable Securities under the Securities Act
to permit offers and sales in accordance with the intended method or methods of
distribution thereof. Sykes may require the Holders to use their best efforts to
furnish to Sykes such information regarding the distribution of the Registrable
Securities as Sykes may from time to time reasonably request in writing. Sykes
agrees to obtain customary services and materials from its counsel and
accountants and to perform all requirements in connection with an offering
required by Section 2, including without limitation such customary opinions of
counsel and "cold comfort" letters from independent certified public accountants
as are reasonably requested by any underwriters. Sykes has been informed by
PricewaterhouseCoopers, LLP ("PwC") that isolated trades in Sykes common stock
by members of PwC has caused the SEC to review independence standards governing
PwC. Sykes had no such communication with the SEC but it is acknowledged that as
a result of such review or for an other reason, Sykes may elect to use
independent accountants other than Sykes further agrees to (i) if furnish
Holders for whom shares are registered such number of copies of a prospectus and
preliminary prospectus, if applicable, as such Holders may reasonably request;
(ii) enter into customary agreements, including an underwriting agreement (which
shall include the indemnification and contribution provisions under Section 5 or
similar provisions), and to make customary representations to any underwriters
with respect to the registration statement; (iii) make available to any
underwriters its offices and records as reasonably requested for the purpose of
allowing the underwriters to conduct a customary "due diligence" investigation;
arid (iv) list the shares registered on such Holder's or Holders' behalf on the
exchange or quotation system on which the Sykes Common Stock is at the time
listed.
5. Indemnification.
---------------
(a) Sykes agrees to indemnify, to the extent permitted by law, each
Holder of Registrable Securities and (as applicable) its officers and directors
and each person or entity who controls such Holder (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities and expenses
caused by any untrue or alleged untrue statement of material fact contained in
any registration statement, prospectus or preliminary prospectus or any amend-
ment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (in the case of a prospectus, always in light of the
circumstances under which the statements are made) except insofar as the same
are caused by or contained in any information furnished in writing to Sykes by
such Holder or its affiliate expressly for use therein or by such Holder's
failure to deliver a copy of the registration statement or prospectus or any
amendments or supplements thereto after Sykes has furnished such Holder with a
sufficient number of copies of the same. In connection with an underwritten
offering, Sykes will indemnify such underwriters, their officers and directors
and each person or entity who controls such underwriters (within the meaning of
the Securities Act) to the same extent as provided above with respect to the
indemnification of the Holders of Registrable Securities.
(b) In connection with any registration statement in which a Holder
of Registrable Securities is participating, each such Holder will furnish to
Sykes in writing such information and affidavits as Sykes reasonably requests
for use in connection with any such registration statement or prospectus and, to
the extent permitted by law, will indemnify Sykes, its directors and officers
and each person or entity and entity who controls Sykes (within the meaning of
the Securities Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the state-
ments therein not misleading, (in the case of a prospectus, always in light of
the circumstances under which the statements are made) but only to the extent
that such untrue statement or omission is contained in any information or
affidavit so furnished in writing by such Holder or its affiliate; provided that
the obligation to indemnify will be several, not joint and several, among such
Holders of Registrable Securities and the liability of each such Holder of
Registrable Securities in the event that more than one Holder is liable will be
in proportion to and limited to the net amount received by such Holder from the
sale of Registrable Securities pursuant to such registration statement.
(c) Any person or entity entitled to indemnification hereunder will
(i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification; provided, however, that failure to
give such notice will not prejudice such person's or entity's right to indemni-
fication from the indemnifying party, except as to any losses suffered by such
person or entity which are attributable to such person's or entity's failure to
promptly give such notice to such indemnifying party and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. The indemnifying party will
not be subject to any liability for any settlement made by the indemnified party
without its consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees arid expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling person or entity
of such indemnified party and will survive the transfer of securities and the
termination of this Agreement. Sykes also agrees to make such provisions as are
reasonably requested by any indemnified party for contribution to such party in
the event Sykes' indemnification is unavailable or unenforceable for any reason.
6. Regulation S Offering. The Sellers agree that none of the Registrable
Securities will be offered for sale pursuant to Regulation S (as promulgated by
the SEC) without the prior written consent of Sykes.
7. Miscellaneous.
-------------
(a) No Inconsistent Agreements. Sykes has not entered into and will
not on or after the date of this Agreement enter into any agreement with respect
to the Common Stock which is inconsistent with the rights granted in this Agree-
ment to the Sellers or which otherwise conflicts with the provisions hereof
(b) Amendments and Waivers. The provisions of this Agreement, includ-
ing the provisions of this sentence, may not be amended, modified or supple-
mented, and waivers or consents to departures from the provisions hereof may not
be given, unless (i) Sykes has obtained the written consent of the Holders to
such amendment, modification, or supplement or (ii) Sykes has obtained from each
Holder a waiver or consent to such departure.
(c) Notices. All notices, requests, demands and other communications
(collectively, "Notices") that are required or may be given under this Agreement
shall be in writing. All Notices shall be deemed to have been duly given or
made: if by hand, immediately upon delivery; if by telecopier or similar device,
immediately upon sending, provided notice is sent on a business day during the
hours of 9:00 a.m. and 6:00 p.m. at the location of the party receiving the
Notice, but if net, then immediately upon the beginning of the first business
day after being sent; if by FedEx, Express Mail or any other reputable overnight
delivery service, three business days after being placed in the exclusive
custody and control of said courier; and if mailed by certified mail, return
receipt requested, ten business days after mailing. Notwithstanding the
foregoing, with respect to any Notice given or made by telecopier or similar
device, such Notice shall not be effective unless and until (i) the telecopier
or similar advice being used prints a written confirmation of the successful
completion of such communication by the party sending the Notice, and (ii) a
copy of such Notice is deposited in first class mail to the appropriate address
for the party to whom the Notice is sent. In addition, notwithstanding the
foregoing, a Notice of a change of address by a party hereto shall not be
effective until received by the party to whom such Notice of a change of address
is sent. All Notices are to be given or made to the parties at the following
addresses (or to such other address as either party may designate by Notice in
accordance with the provisions of this Section):
(i) if to the Holders, at the address set forth in the Acquisi-
tion Agreement, or at the most current address given by the Holders to Sykes by
means of a notice given in accordance with the provisions of this Section 7(c).
(ii) if to Sykes, at the address set forth in the Acquisition
Agreement, or at the most current address given by Sykes to the Sellers by means
of a notice given in accordance with the provisions of this Section 7(c).
(d) 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.
(e) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Florida.
(g) 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, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(h) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective permitted successors and assigns of the parties
hereto whether so expressed or not. In addition, whether or not any express
assignment has been made, the provisions of this Agreement which are for the
benefit of purchasers or other permitted Holders of Registrable Securities are
also for the benefit of, and enforceable by, any subsequent permitted Holder of
Registrable Securities. The registration rights of the Holders under this Agree-
ment may be transferred to any transferee who lawfully acquires at least fifteen
thousand (15,000) shares of the Registrable Securities; provided, however, that
Sykes is given written notice by the Holder at the time of such transfer stating
the name and address of the transferee and identifying the securities with
respect to which the tights under this Agreement are being assigned; and
provided further, that such transferee is a person who is reasonably
satisfactory to Sykes and executes an agreement in writing agreeing to be bound
by the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
XXXXX ENTERPRISES, INCORPORATED
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
SELLERS:
/s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Xxxxx X. Xxxxxxxxx
/s/ Xxxxxxx Xxxxxxxx
------------------------------------
Xxxxxxx Xxxxxxxxx
