EXHIBIT 10.18(a)
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of the 28th day of
January, 1997, between the person whose name and address appear on the signature
page attached hereto (individually a "Holder" or collectively with the holders
of the Units issued in the Offering, each as defined below, the "Holders") and
Marine Management Systems, Inc., a company incorporated under the laws of the
State of Delaware, having its principal place of business at 000 Xxxx Xxxxxx,
Xxxxxxxx, XX 00000 (the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and delivery of
this Agreement, the Holders are purchasing from the Company an aggregate of up
to 7 units (the "Units"), each Unit consisting of (i) 10,000 shares (the "Bridge
Shares") of the common stock, par value $.002 per share, of the Company (the
"Common Stock") and (ii) a non-negotiable 9% promissory note of the Company in
the principal amount of $50,000, all upon the terms set forth in the
Confidential Private Offering Memorandum of the Company dated January 13, 1997
(the "Bridge Financing");
WHEREAS, the Company has entered into a Letter of Intent with
Whale Securities Co., L.P. ("Whale") in connection with a proposed initial
public offering of the securities of the Company to be underwritten by Whale
(the "Proposed IPO") and intends to prepare and file a registration statement
relating to the Proposed IPO (the "Proposed IPO Registration Statement"), and to
use its best efforts to see that such registration statement is declared
effective, within twelve months following the closing date of the Bridge
Financing (the "Bridge Closing"); and
WHEREAS, the Company desires to grant to the Holder the
registration rights set forth herein with respect to the Bridge Shares and the
Penalty Shares (as defined below), if any (collectively, the "Registrable
Securities");
NOW, THEREFORE, the parties hereto mutually agree as follows:
1. Mandatory Registration of the Registrable Securities.
(a) The Company will include the Bridge Shares in a
registration statement which the Company will (i) prepare and file with the
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "Act") and (ii) use its best efforts to have declared effective
by the SEC within 15 months following the date a registration statement relating
to the initial public offering of the Company's securities (the "IPO") is
declared effective by the SEC (the "IPO Effective Date"), so as to permit the
public trading of the Bridge Shares commencing no later than 15 months following
the IPO Effective Date (the "Post-IPO Registration Statement"). At the Company's
option, the Post-IPO Registration Statement may include securities other than
Registrable Securities.
(b) If the Post-IPO Registration Statement is not
declared effective by the SEC within 15 months following the IPO Effective Date,
then, commencing on the first day of the sixteenth month following the IPO
Effective Date, the Company shall (i) issue to each holder of Registrable
Securities, on the first day of each month that any of the Registrable
Securities continue not to be publicly tradeable pursuant to an effective
registration statement under the Act, such number of additional shares of Common
Stock as is equal to 10% of the total number of Registrable Securities held by
such holder (any additional shares of Common Stock issued pursuant to this
Section 1(b) are referred to herein as the "Penalty Shares") and (ii) include
the Penalty Shares as well as the Bridge Shares in, and continue to use its best
efforts to cause the SEC to promptly declare the effectiveness of, the Post-IPO
Registration Statement so as to permit the public trading of the Registrable
Securities pursuant thereto. Notwithstanding the foregoing, in the event, and
during such time as, the effectiveness of the Post-IPO Registration Statement is
delayed due to unforeseen reasons beyond the Company's control, the Company
shall not be obligated to issue Penalty Shares to the Holder during any
consecutive 12-month period commencing on the 16th month following the IPO
Effective Date which are equal to more than 25% of the Holder's original Bridge
Shares.
(c) The Holders agree that they will not sell or
otherwise transfer any of their Registrable Securities pursuant to the Post-IPO
Registration Statement or otherwise, until: (i) twelve months following the
effective date of the Proposed IPO Registration Statement (or such longer period
as The Nasdaq Stock Market, Inc. may require in connection with the Proposed
IPO) or (ii) if the Proposed IPO is not consummated prior to the first
anniversary of the Bridge Closing, the first anniversary of such Bridge Closing.
(d) Once the Post-IPO Registration Statement covering
the Registrable Securities pursuant to the provisions of this Section 1 is
declared effective by the SEC, the Company will use its best efforts to maintain
the effectiveness of such Post-IPO Registration Statement or another
registration statement covering, and permitting the public trading of, the
unsold Registrable Securities (collectively, the "Mandatory Registration
Statement") until the earlier date to occur (the "Release Date") of (i) the date
that all of the Registrable Securities have been publicly sold pursuant to the
Mandatory Registration Statement, and (ii) the date that the holders of the
unsold Registrable Securities receive an opinion of counsel to the Company that
all of the unsold Registrable Securities, other than securities held by
"affiliates" of the Company, as such term is defined in Rule 144 of the Act, may
be publicly traded without statutory limitation as to quantity or timing and
without registration under the Act, pursuant to Rule 144K of the Act or
otherwise. If the Company fails to keep the Mandatory Registration Statement
continuously effective during such period, then the Company shall, promptly upon
the request of the Holders of at least 51% of the unsold Registrable Securities,
use its best efforts to update the Mandatory Registration Statement or file a
new registration statement covering the unsold Registrable Securities, subject
to the terms and provisions hereof, and, in the event the Company fails to do so
within 90 days after receipt of such request, the Company shall issue to the
Holder, on one occasion only, such number of additional shares of Common Stock
as is equal to one-quarter of the number of shares comprising the unsold
Registrable Securities held by such Holder (subject to adjustment for stock
splits, stock dividends or recapitalizations), without further consideration,
and the Company shall be obligated to cause such additional shares, as well as
the Registrable Securities remaining unsold, to be registered promptly under the
Act, subject to the terms and provisions hereof.
-2-
2. Piggyback Registration. If at any time following the IPO
Effective Date and prior to the Release Date, the Company proposes to prepare
and file a registration statement under the Act with the SEC covering equity or
debt securities of the Company, or any such securities of the Company held by
its shareholders, it will give written notice of its intention to do so by
registered mail ("Notice"), at least thirty (30) business days prior to the
filing of each such registration statement, to the Holders. Upon the written
request of a Holder (a "Requesting Holder"), made within twenty (20) business
days after the date of the Notice, that the Company include any of the
Requesting Holder's Registrable Securities in such proposed registration
statement, the Company shall use its best efforts to cause such registration
statement (a "Piggyback Registration Statement") to be declared effective under
the Act by the SEC so as to permit the public sale of the Requesting Holder's
Registrable Securities pursuant thereto; provided, however, that if the proposed
registration statement relates to an underwritten offering and in the written
opinion of the Company's managing underwriter for such offering the inclusion of
all or a portion of the Registrable Securities requested to be registered, when
added to the securities being registered by the Company, will exceed the maximum
amount of the Company's securities which can be marketed (i) at a price
reasonably related to their then current market value, or (ii) without otherwise
materially adversely affecting the entire offering, then the Company may exclude
from such offering all or a portion of the Registrable Securities which it has
been requested to register.
If securities are proposed to be offered for sale
pursuant to such Piggyback Registration Statement by other security holders of
the Company and the total number of securities to be offered by the Requesting
Holders and such other selling security holders is required to be reduced
pursuant to a request from the managing underwriter (which request shall be made
only for the reasons and in the manner set forth above), the aggregate number of
Registrable Securities to be offered by Requesting Holders pursuant to such
Piggyback Registration Statement shall equal the number which bears the same
ratio to the maximum number of securities that the underwriter believes may be
included for all the selling security holders (including the Requesting Holders)
as the original number of Registrable Securities proposed to be sold by the
Requesting Holders bears to the total original number of securities proposed to
be offered by the Requesting Holders and the other selling security holders.
Notwithstanding the provisions of this Section 2 the
Company shall have the right, at any time after it shall have given Notice
pursuant to this Section 2 (irrespective of whether any written request for
inclusion of Registrable Securities shall have already been made), to elect not
to file any Piggyback Registration Statement or to withdraw the same after the
filing but prior to the effective date thereof.
3. Additional Terms.
(a) If any stop order shall be issued by the SEC in
connection with a Mandatory Registration Statement or, following its
effectiveness, a Piggyback Registration Statement (collectively referred to
herein as the "Bridge Registration Statement") the Company will use its best
efforts to obtain the removal of such order. Following the effective date of the
Bridge Registration Statement, the Company shall, upon the request of the
Holder, forthwith supply such reasonable number of copies of the Bridge
Registration Statement, preliminary prospectus and prospectus meeting the
requirements of the Act, and other documents necessary
-3-
or incidental to the registration and public offering of the Registrable
Securities, as shall be reasonably requested by the Holder to permit the Holder
to make a public distribution of the Holder's Registrable Securities. The
Company will use its reasonable efforts to qualify the Registrable Securities
for sale in such states as the Holders of such securities shall reasonably
request, provided that no such qualification will be required in any
jurisdiction where, solely as a result thereof, the Company would be subject to
general service of process or to taxation or qualification as a foreign
corporation doing business in such jurisdiction. The obligations of the Company
hereunder with respect to the Holder's Registrable Securities are expressly
conditioned on the Holder's furnishing to the Company such appropriate
information concerning the Holder, the Holder's Registrable Securities and the
terms of the Holder's offering of such securities, as the Company may reasonably
request.
(b) The Company shall bear the entire cost and expense
of each registration of the Registrable Securities provided for herein;
provided, however, that the Holder shall be solely responsible for the fees of
any counsel retained by the Holder in connection with such registration and any
transfer taxes or underwriting discounts, commissions or fees applicable to the
Registrable Securities sold by the Holder pursuant thereto.
(c) The Company shall indemnify and hold harmless the
Holder and each underwriter, within the meaning of the Act, who may purchase
from or sell for the Holder, any Registrable Securities, from and against any
and all losses, claims, damages and liabilities caused by any untrue statement
of a material fact contained in the Bridge Registration Statement, any other
registration statement filed by the Company under the Act, any post-effective
amendment to such registration statements, or any prospectus included therein
required to be filed or furnished by reason of this Agreement or caused by any
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission based upon information furnished or required to be furnished in
writing to the Company by the Holder or underwriter expressly for use therein,
which indemnification shall include each person, if any, who controls either the
Holder or underwriter within the meaning of the Act and each officer, director,
employee and agent of the Holder and underwriter; provided, however, that the
indemnification in this paragraph (c) with respect to any prospectus shall not
inure to the benefit of the Holder or underwriter (or to the benefit of any
person controlling the Holder or underwriter) on account of any such loss,
claim, damage or liability arising from the sale of Registrable Securities by
the Holder or the underwriter, if a copy of a subsequent prospectus correcting
the untrue statement or omission in such earlier prospectus was provided to the
Holder or underwriter by the Company prior to the subject sale and the
subsequent Prospectus was not delivered or sent by the Holder or underwriter to
the purchaser prior to such sale.
(d) The Holder or underwriter or other person, as the
case may be, shall indemnify the Company, its directors, each officer signing
the Bridge Registration Statement and each person, if any, who controls the
Company within the meaning of the Act, from and against any and all losses,
claims, damages and liabilities caused by any untrue statement of a material
fact contained in the Bridge Registration Statement, any registration statement
or any prospectus required to be filed or furnished by reason of this Agreement
or caused by any omission to state
-4-
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission based upon
information furnished in writing to the Company by the Holder or underwriter
expressly for use therein.
(e) If for any reason the indemnification provided for
in the preceding subparagraphs is held by a court of competent jurisdiction to
be unavailable to an indemnified party with respect to any loss, claim, damage,
liability or expense referred to therein, then the indemnifying party, in lieu
of indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by the indemnified party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnified party and the indemnifying party,
but also the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations.
(f) Neither the filing of a Bridge Registration
Statement by the Company pursuant to this Agreement nor the making of any
request for prospectuses by the Holder shall impose upon the Holder any
obligation to sell the Holder's Registrable Securities.
(g) The Holder, upon receipt of notice from the Company
that an event has occurred which requires a post-effective amendment to the
Bridge Registration Statement or a supplement to the prospectus included
therein, shall promptly discontinue the sale of Registrable Securities pursuant
to such registration statement until the Holder receives a copy of the amended
Bridge Registration Statement or supplemented prospectus from the Company, which
the Company shall provide as soon as practicable after such notice.
4. Governing Law.
(a) The Registrable Securities are being, and will be,
delivered in New York. This Agreement shall be deemed to have been made and
delivered in the State of New York and shall be governed as to validity,
interpretation, construction, effect and in all other respects by the internal
laws of the State of New York.
(b) The Company and the Holder each (i) agrees that any
legal suit, action or proceeding arising out of or relating to this Agreement,
or any other agreement entered into between the Company and the Holder pursuant
to the Bridge Financing or the Bridge Registration Statement shall be instituted
exclusively in the New York State Supreme Court, County of New York, or in the
United States District Court for the Southern District of New York, (ii) waives
any objection which the Company or such Holder may have now or hereafter to the
venue of any such suit, action or proceeding, and (iii) irrevocably consents to
the jurisdiction of the New York State Supreme Court, County of New York and the
United States District Court for the Southern District of New York in any such
suit, action or proceeding. The Company and the Holder each further agrees to
accept and acknowledge service of any and all process which may be served in any
such suit, action or proceeding in the New York State Supreme Court, County of
New York or in the United States District Court for the Southern District of New
York and agrees that service of process upon the Company or the Holder mailed
-5-
by certified mail to the Company at the address set forth above, in the case of
the Company, and to the Holder's address, in the case of the Holder, shall be
deemed in every respect effective service of process upon the Company or the
Holder, as the case may be, in any suit, action or proceeding.
5. Amendment. This Agreement may only be amended by a written
instrument executed by the Company and the Holder.
6. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties, oral and
written, with respect to the subject matter hereof.
7. Execution in Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same document.
8. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed duly given when
delivered by hand or five days after such notice is mailed by registered or
certified mail, postage prepaid, return receipt requested, as follows:
If to the Holder, to his or her address set forth on the
signature page of this Agreement.
If to the Company, to the address set forth on the first page
of this Agreement.
9. Binding Effect; Benefits. The Holder may not assign his or
her rights hereunder. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective heirs, legal
representatives and successors. Nothing herein contained, express or implied, is
intended to confer upon any person other than the parties hereto and their
respective heirs, legal representatives and successors, any rights or remedies
under or by reason of this Agreement.
10. Headings. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this
Agreement.
11. Severability. Any provision of this Agreement which is
held by a court of competent jurisdiction to be prohibited or unenforceable in
any jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
-6-
IN WITNESS WHEREOF, this Agreement has been executed and
delivered by the parties hereto as of the date first above written.
MARINE MANAGEMENT SYSTEMS, INC.
By:____________________________________
Name:
Title:
HOLDER:
----------------------------------
Signature
---------------------------------
Print Name
Address of Holder:
----------------------------------
----------------------------------
----------------------------------
-7-
