EXHIBIT 10.5
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JUNE 29, 2000
between
FIELDWORKS, INCORPORATED
and
FWRKS ACQUISITION CORP.
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated June 29, 2000,
between FIELDWORKS, INCORPORATED, a Minnesota corporation (the "Company") and
FWRKS Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of
Kontron Embedded Computers AG, a German corporation (the "Purchaser"). This
Agreement is made pursuant to the Purchase and Option Agreement of even date
herewith, between the Company and the Purchaser (the "Purchase Agreement"). The
Company has agreed to provide the Purchaser and any transferees and subsequent
purchasers of Registrable Securities (as hereinafter defined) that may be
issued, from time to time, those registration rights with respect to the
Registrable Securities, set forth in this Agreement. Capitalized terms used
herein without definition shall have the meanings set forth in the Purchase
Agreement.
The parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized terms shall have
the following meanings:
"Closing Date" shall have the meaning assigned to such term in
the Purchase Agreement.
"Commission" shall mean the Securities and Exchange
Commission.
"Common Stock" shall mean the common stock, $.001 par value
per share, of the Company.
"Demand Registration" shall have the meaning assigned to such
term in Section 3 hereof.
"Holder" shall mean a Purchaser, or any transferee, who is the
record owner of Registrable Securities.
"Option" shall mean the common stock purchase option of the
Company granted to the Purchaser under Section 1.2 the Purchase
Agreement.
"Person" shall mean an individual, partnership, corporation,
limited liability company, business trust, joint state company trust,
unincorporated organization, joint venture, a government authority or
other entity of whatever nature.
"Preferred Stock" shall mean such shares of the Series B
Preferred Stock, $.001 par value per share, of the Company and the
Series C Preferred Stock, $.001 par value per share, of the Company,
that may be acquired by the Purchaser or its assign upon exercise of an
option by Industrial Works Holding Co., LLC.
"Prospectus" shall mean the prospectus included in any
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 such Registration Statement, and
all other amendments and supplements to the Prospectus, including
post-effective amendments to the Registration Statement of which such
Prospectus is a part, and all material incorporated by reference in
such Prospectus.
"Registrable Securities" shall mean the Securities, but only
so long as they remain Restricted Securities.
"Registration Expenses" shall have the meaning ascribed
thereto in Section 8 hereof.
"Registration Statement" shall mean any registration statement
of the Company that covers any of the Registrable Securities pursuant
to the provisions of this Agreement, including the Prospectus,
amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits, and all material incorporated
by reference in such Registration Statement.
"Restricted Securities" shall mean the Securities unless and
until, in the case of any such Securities, (i) they have been
effectively registered under the Securities Act and disposed of in
accordance with the Registration Statement covering them, (ii) they are
permitted to be distributed to the public in a single transaction
pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act, or (iii) they are otherwise freely transferable without
restriction under the Securities Act.
"Securities" shall mean (i) any and all shares of Common Stock
issued or issuable to Purchaser or its transferees upon exercise of the
Warrants, (ii) any and all shares of Common Stock issued or issuable to
Purchaser or its transferees upon exercise of the Option, (iii)
following the acquisition of such shares of Preferred Stock by the
Purchaser or its assign from Industrial Works Holding Co., LLC., any
and all shares of Common Stock issued or issuable to Purchaser or its
transferees upon conversion of the Preferred Stock, (iv) any shares of
Common Stock issued (or issuable upon conversion or exercise of any
warrant, right or other security that is issued) pursuant to the
exercise of any right granted under sections 6.8 or 8.1 of the Purchase
Agreement and (v) any other shares of Common Stock issued as (or
issuable upon conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with
respect to, or in exchange for or in replacement of, the shares listed
in clauses (i) through (iv) above.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Warrant" shall mean the common stock purchase warrant of the
Company issued to the Purchaser as of the date hereof.
2. Securities Subject to this Agreement. The Securities entitled to the
benefits of this Agreement are the Registrable Securities.
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3. Demand Registration.
(a) Request for Registration. Subject to the provisions of Section 3(b)
hereof and at any time commencing on the Closing Date, one or more Holders
owning in the aggregate in excess of 25% of the issued and outstanding
Registrable Securities may make a written request to the Company for
registration under and in accordance with the provisions of the Securities Act
of up to all of the Registrable Securities owned by any such Holder (a "Demand
Registration"). If, however, the Company shall furnish to the Holder or Holders
requesting a registration statement pursuant to this Section 3 a certificate
signed by the President of the Company stating that, in the good faith judgment
of the Board of Directors of the Company, a material acquisition or disposition
by the Company is being negotiated or has been publicly announced or that such
registration statement would have a material detrimental effect on the Company,
the Company shall have the right to defer such filing for a period of not more
than 120 days after receipt of the request of the Holder or Holders requesting
such registration; provided, however, that the Company may not utilize this
right more than once in any 12 month period. Unless the Company shall elect to
defer the Demand Registration as provided in the previous sentence, upon receipt
of such Demand Registration request, the Company shall within 20 days after
receipt of such request, give written notice (the "Notice") of such request to
all other Holders and will include in such registration all Registrable
Securities with respect to which the Company receives written requests for
inclusion therein within 30 days after it gives the Notice to the applicable
Holders.
(b) Number of Registrations. The Holders are entitled to in the
aggregate two Demand Registrations regardless of the Person or Persons making
demand, provided a request for a second Demand Registration shall not be made
prior to six months after the request for the first Demand Registration. If the
Company determines that there are material developments that require the filing
of a post-effective amendment to the Registration Statement, then each Holder
shall refrain from selling any Registrable Securities until the post-effective
amendment is declared effective. The Company shall file and attempt to have
declared effective such post-effective amendment as soon as possible. The
Company shall not be deemed to have effected a Demand Registration unless and
until such Demand Registration is declared effective.
(c) Priority on Demand Registrations. If the managing underwriter or
underwriters of a Demand Registration (or in the case of a Demand Registration
not being underwritten, Holders owning in the aggregate in excess of 50% of the
Registrable Securities to be registered in such Demand Registration) advise the
Company in writing that in its or their opinion the number of Securities
proposed to be sold in such Demand Registration exceeds the number of Securities
that can be sold in such offering without an adverse effect on such offering,
the Company will include in such registration only the number of securities
that, in the opinion of such underwriter or underwriters (or Holders, as the
case may be) can be sold, selected pro rata among the Holders that have
requested to be included in such Demand Registration; provided, that if any
Holder has requested inclusion in such Demand Registration and all Registrable
Securities that such Holder has requested to be included in such Demand
Registration pursuant to this Section 3 are not so included, such Holder shall
be entitled to one additional Demand Registration (an "Additional Registration")
hereunder (with all expenses of registration relating to such additional Demand
Registration to be
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borne by the Company) on the same terms and conditions as would have applied to
such Holders had such earlier Demand Registration not been made.
(d) Selection of Underwriters and Counsel. If any Demand Registration
is an underwritten offering with respect to any issue of Registrable Securities,
the Holders of a majority of such Registrable Securities to be included in such
Demand Registration will select (i) the investment banker or bankers and manager
or managers of nationally recognized standing to administer the offering subject
to the consent of the Company, such consent not to be unreasonably withheld, and
(ii) one counsel to the sellers of such Registrable Securities in such offering.
The right of any Holder to registration shall be conditioned upon such Holder's
participation in such underwriting. The Holders of the Registrable Securities to
be registered shall pay all underwriting discounts and commissions of such
investment banker or bankers and manager or managers. Subject to Section 8
hereof, the Company shall pay the reasonable fees and expenses of one such
counsel to the sellers of such Registrable Securities incurred in connection
with reviewing and otherwise acting in connection with the registration
statement relating to such underwritten public offering up to a maximum amount
for each Demand Registration of $10,000.
4. Piggyback Registration Rights.
(a) If at any time after the Closing Date (but without obligation to do
so), the Company proposes to register any securities under the Securities Act
either for its own account or the account of any selling security holders (other
than pursuant to (i) Section 3, (ii) a registration statement on Form S-4 or S-8
or any successor or similar forms, (iii) a registration relating solely to a
Commission Rule 145 offering, or (iv) a registration on any form that does not
permit secondary sales), it will give a Notice to each of the Holders of its
intention at least 20 days in advance of the filing of any registration
statement with respect thereto. Upon the written request of any of the Holders
given within 15 days after receipt of such Notice, the Company, subject to
Section 4(b) below, will use its reasonable best efforts to include in such
registration, and in any underwriting involved therein, all the Registrable
Securities included in such request.
(b) Underwritten Offerings.
(i) In the case of an underwritten offering of Common Stock by
the Company, each Holder shall, with respect to Registrable Securities
that such Holder then desires to sell, enter into an underwriting
agreement with the same underwriters engaged by the Company with
respect to the Common Stock being offered by the Company and the
Company shall cause such underwriters to include in any such
underwriting all of the Registrable Securities that a Holder then
desires to sell; provided, however, that such underwriting agreement is
in substantially the same form as the underwriting agreement that the
Company enters into in connection with the primary offering it is
making.
(ii) If the managing underwriter with respect to such
underwritten offering requests in writing that the number of shares of
Registrable Securities to be offered by selling security holders be
reduced because in the judgment of the managing underwriter the
offering would be materially and adversely affected, then the number of
shares of such
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Registrable Securities shall be reduced by such amount as the managing
underwriter may determine in writing so as to not materially and
adversely affect the proposed offering, which reduced number of
securities shall be included in the offering selected, first, among the
Holders and other holders of Common Stock having registration rights on
a pari passu basis with the Holders participating in such offering, as
nearly as possible pro rata, based on the number of shares of
Registrable Securities and Common Stock such Holders and other holders
have requested to be included therein, and second, to the extent
available, among any other selling security holders.
(c) The Holders of a majority of the Securities to be included
in such registration will select one counsel to the sellers of such
Registrable Securities in such offering. The Company shall pay the
reasonable fees and expenses of one such counsel to the sellers of such
Registrable Securities incurred in connection with reviewing and
otherwise acting in connection with the registration statement relating
to such offering up to a maximum amount of $10,000 for each exercise of
registration rights granted pursuant to this Section 4.
5. Form S-3 Registration.
(a) Request for Registration. At any time after the Closing Date when
the Company has qualified for the use of Form S-3, in addition to the rights
contained in the foregoing provisions of this Agreement, one or more Holders may
make a written request to the Company for registration on Form S-3 under and in
accordance with the provisions of the Securities Act of up to all of the
Registrable Securities owned by any such Holder (a "Form S-3 Registration"),
provided the number of shares requested to be sold would have an aggregate price
to the public of at least $500,000. If, however, the Company shall furnish to
the Holder or Holders requesting a registration statement pursuant to this
Section 5 a certificate signed by the President of the Company stating that, in
the good faith judgment of the Board of Directors of the Company, a material
acquisition or disposition by the Company is being negotiated or has been
publicly announced or that such registration statement would have a material
detrimental effect on the Company, the Company shall have the right to defer
such filing for a period of not more than 120 days after receipt of the request
of the Holder or Holders requesting such registration; provided, however, that
the Company may not utilize this right more than once in any 12 month period.
Unless the Company shall elect to defer the Form S-3 Registration as provided in
the previous sentence, upon receipt of such Form S-3 Registration request, the
Company shall within 15 days after receipt of such request, give written notice
(the"Form S-3 Notice") of such request to all other Holders and will include in
such registration all Registrable Securities with respect to which the Company
receives written requests for inclusion therein within 30 days after it gives
the Form S-3 Notice to the applicable Holders.
(b) Number of Form S-3 Registrations. The Holders are entitled to
unlimited Form S-3 Registrations; provided, however, the Company shall not be
obligated to effect more than two Form S-3 Registrations in any 12 month period.
(c) Priority on Form S-3 Registrations. If the managing underwriter or
underwriters of a Form S-3 Registration (if the Form S-3 Registration is being
underwritten) advise the Company in writing that in its or their opinion the
number of Securities proposed to be sold in such Form S-3
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Registration exceeds the number of Securities that can be sold in such offering
without an adverse effect on such offering, the Company will include in such
registration only the number of securities that, in the opinion of such
underwriter or underwriters (or Holders, as the case may be) can be sold,
selected pro rata among the Holders that have requested to be included in such
Form S-3 Registration.
6. Information. Upon making a request pursuant to Section 3, 4 or 5,
the Holder shall specify the number of shares of Registrable Securities to be
registered on its behalf and the intended method of disposition thereof;
provided, however, upon making a request pursuant to Section 3 or 4, that if the
Holders of a majority of the Registrable Securities included in such request for
registration specify one particular type of underwritten offering, such method
of disposition shall be the type of underwritten offering or a series of such
underwritten offerings used in connection with the disposition of the
Registrable Securities pursuant to such Registration Statement as the Holders of
a majority of the Registrable Securities may elect during the time period the
Registration Statement is effective.
The Company may require the Holders to furnish to the Company such
information in writing regarding themselves and the distribution of Registrable
Securities as the Company may from time to time reasonably request in writing in
order to comply with the Securities Act. The Holders agree to supply the Company
with such information and to notify the Company as promptly as practicable of
any inaccuracy or change in information they have previously furnished to the
Company.
7. Registration Procedures. If and whenever the Company is required by
the provisions of this Agreement to use its reasonable best efforts to effect or
cause a registration under the Securities Act as provided in this Agreement, the
Company will, at its expense, as expeditiously as practicable:
(a) In accordance with the Securities Act and the rules and
regulations of the Commission, use reasonable best efforts to prepare
and file with the Commission a Registration Statement in the form of an
appropriate registration statement with respect to the Registrable
Securities and use its reasonable best efforts to cause such
Registration Statement to become and remain continuously effective
until the earlier of (i) the time that all of the Registrable
Securities covered by such Registration Statement have been sold in
accordance with the intended methods of disposition of the seller or
sellers set forth in such Registration Statement and (ii) 180 days
after such Registration Statement has been declared effective;
provided, that if for any portion of such 180-day period the
Registration Statement is not effective or if Holders are required to
refrain from selling Registrable Securities pursuant to Section 3(b),
then such 180-day requirement for maintaining the effectiveness of the
Registration Statement shall be extended by the length of such
interruption(s); provided, further, that if such registration has been
effected pursuant to Form S-3 (or any successor form) then such period
of effectiveness shall be for 12 months after the Registration has been
declared effective, and shall prepare and file with the Commission such
amendments to such Registration Statement and supplements to the
Prospectus contained therein as may be necessary to keep such
Registration Statement effective and such Registration Statement and
Prospectus accurate and complete during such period;
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(b) Furnish to each Holder participating in such registration
(each of such Persons being referred to herein as a "Participant" in
such registration) such reasonable number of copies of the Registration
Statement and Prospectus and such other documents as such Participant
may reasonably request in order to facilitate the public offering of
the Registrable Securities;
(c) Use its reasonable best efforts to register or qualify the
Registrable Securities covered by such Registration Statement under
such state securities or blue sky laws of such jurisdictions as such
Participants may reasonably request; provided, however, that the
Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation in any jurisdiction
in which it is not so qualified or to subject itself to taxation in
connection with any such registration or qualification of such
Registrable Securities;
(d) Notify the Participants in such registration, promptly
after it shall receive notice thereof, of the date and time when such
Registration Statement and each post-effective amendment thereto has
become effective or a supplement to any Prospectus forming a part of
such Registration Statement has been filed;
(e) Notify the Participants in such registration promptly of
any request by the Commission for the amending or supplementing of such
Registration Statement or Prospectus or for additional information;
(f) Prepare and file with the Commission, promptly upon the
request of any Participant in such registration, the Registration
Statement and any amendments or supplements to such Registration
Statement or Prospectus that, in the reasonable opinion of counsel for
such Participants, is required under the Securities Act or the rules
and regulations thereunder in connection with the distribution of the
Securities by such Participants or to otherwise comply with the
requirements of the Securities Act and such rules and regulations;
(g) Prepare and promptly file with the Commission and promptly
notify the Participants in such registration of the filing of such
amendments or supplements to such Registration Statement or Prospectus
as may be necessary to correct any statements or omissions if, at the
time when a Prospectus relating to such Securities is required to be
delivered under the Securities Act, any event has occurred as the
result of which any such Prospectus or any other Prospectus then in
effect may include an untrue statement of a material fact or omit to
state any 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;
(h) Advise the Participants in such registration, promptly
after it shall receive notice or obtain knowledge thereof, of the
issuance of any stop order by the Commission suspending the
effectiveness of such Registration Statement or the initiation or
threatening of any proceeding for that purpose and promptly use its
best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued;
(i) Otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to the Company's security holders
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earnings statements satisfying the provisions of Section 11(a) of the
Securities Act, no later than 45 days after the end of any 12 month
period (or 90 days, if such a period is a fiscal year) beginning with
the first month of the Company's first fiscal quarter commencing after
the effective date of a Registration Statement;
(j) Not file any amendment or supplement to such Registration
Statement or Prospectus to which a majority in interest of the
Participants in such registration has reasonably objected on the
grounds that such amendment or supplement does not comply in all
material respects with the requirements of the Securities Act or the
rules and regulations thereunder, after having been furnished with a
copy thereof at least three business days prior to the filing thereof
unless the Company shall have been advised by its counsel that such
amendment is required under or is advisable in view of the Securities
Act or the rules or regulations adopted thereunder in connection with
the distribution of Securities by the Company or the Participants;
(k) Furnish to a single firm of counsel, initially Xxxxxx
Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP, or such other counsel
thereafter designated by the Holders who hold a majority of the
Registrable Securities being sold (the "Holder's Counsel"), and each
underwriter of the securities being sold by such Holders, at least five
days prior to the filing thereof, such number of copies of such
registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of
the prospectus included in such registration statement (including each
preliminary prospectus), in conformity with the requirements of the
Securities Act, and such other documents, as such counsel may
reasonably request, in substantially the form in which they are
proposed to be filed with the SEC, in order to facilitate the public
sale or other disposition of the Registrable Securities owned by such
Holders;
(l) Enter into such agreements (including an underwriting
agreement in a form reasonably acceptable to the Company and its
counsel) and take such other actions as the Holders shall reasonably
request in order to expedite or facilitate the disposition of such
Registrable Securities;
(m) In the event of an underwritten offering, use its best
efforts to furnish to the Holders an opinion from the Company's counsel
and a "cold comfort" letter from the Company's independent public
accountant (in accordance with SAS 72), addressed to such Holders, in
customary form and covering such matters of the type customarily
covered by such opinions and "cold comfort" letters, in each case for
the type of offering contemplated (i.e., underwritten or
self-underwritten), as such Holders shall reasonably request;
(n) Make available for inspection by the Holders, by any other
underwriter participating in any disposition to be effected pursuant to
such registration statement, and by any attorney, accountant or other
agent retained by such Holders or any such underwriter, all reasonably
pertinent financial and other records, reasonably pertinent corporate
documents and properties of the Company, and cause all of the Company's
officers, directors, employees and the independent public accountants
who have audited its financial statements to supply all information
reasonably requested by such Holders or any such underwriter, attorney,
accountant or agent in connection with such registration statement;
provided, however, that each such Holder and each such representative
of
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such Holder, underwriter, attorney, accountant or agent must execute
and deliver to the Company a confidentiality agreement in form and
substance reasonably acceptable to the Company agreeing to keep any
such information and records concerning the Company confidential;
(o) Permit such Holders to participate in the preparation of
such registration or comparable statement;
(p) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all
such Registrable Securities, in each case not later than the effective
date of such registration;
(q) At or prior to the effective date of the registration use
commercially reasonable efforts to cause all Registrable Securities
covered by such Registration Statement to be (i) listed on each
securities exchange, if any, on which similar securities issued by the
Company are then listed or (ii) authorized to be quoted on the National
Association of Securities Dealers Automated Quotation System if the
securities so qualify and if the Company does not then have similar
securities listed on any national securities exchange; and
(r) In the case of an underwritten offering, enable the
Registrable Securities to be in such denominations or such number of
shares and registered in such names as the underwriters may request at
least two business days prior to the sale of the Registrable
Securities.
8. Expenses of Registration. Except as provided in the following
sentence, all expenses incident to the Company's performance of or compliance
with the provisions of Sections 3, 4, 5, 6 and 7 of this Agreement
(collectively, the "Registration Expenses") shall be borne by the Company,
including, without limitation:
(a) All registration and filing fees (including expenses
relating to filings with NASD Regulation, Inc.);
(b) Fees and expenses of compliance with all securities or
blue sky laws (including fees and disbursements of counsel for the
Company in connection with blue sky qualifications of the Registrable
Securities), provided, however, that the Company shall not be obligated
to file any general consent to service of process or to qualify as a
foreign corporation in any jurisdiction in which it is not so qualified
or to subject itself to taxation in connection with any such
registration or qualification of such Registrable Securities;
(c) Printing, messenger, telephone and delivery expenses;
(d) Reasonable fees and disbursements of the Holders Counsel
incurred in connection with reviewing or otherwise acting in connection
with the Registration Statement; and
(e) Fees and disbursements of the Company's counsel and
independent auditors.
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If the Holders request a Demand Registration pursuant to Section 3 of this
Agreement and thereafter voluntarily withdraw such request, the Holders shall
bear the expenses of the Company referred to in the preceding sentence in
connection with such request (and such request and any actions by the Company
pursuant thereto shall not be counted as one of the Demand Registrations to
which the Holders are entitled under this Agreement), unless, by notice to the
Company, the Holders elect to have such request count as one of the Demand
Registrations to which the Holders are entitled hereunder, in which case all of
the Company's expenses in connection with such request shall be borne by the
Company.
Nothing in this Section 8 shall be deemed to require the Company to pay
or bear any expenses of any Participant's transfer or other taxes or any
underwriting discounts, selling commissions or similar fees of the Participants.
9. Indemnification and Contribution.
(a) Indemnification by the Company. Whenever, pursuant to
Section 3, 4 or 5, a Registration Statement relating to the Registrable
Securities is filed under the Securities Act, the Company will (except
as to matters covered by Section 9(b) hereof) indemnify and hold
harmless each Participant in the registration, each of their officers,
directors and employees, each underwriter of Registrable Securities,
and each Person, if any, who controls any such Person within the
meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act (collectively, the "Participant Indemnitees" and,
individually, a "Participant Indemnitee"), against any losses, claims,
damages or liabilities, including all actual legal or other expenses
reasonably incurred by a Participant Indemnitee in connection with
investigating or defending against such loss, claim, damage, liability
or action, joint or several, to which such Participant Indemnitees 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 any untrue statement or alleged untrue
statement of any material fact contained in such Registration
Statement, or Prospectus contained therein, or any amendment or
supplement thereto, except as corrected by amendment or prospectus
supplement, 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 under which they were made, not misleading, unless any
such statement or omission is based on written information provided by
the Participant Indemnitee, or a representation of a Participant
Indemnitee, that such Participant Indemnitee has requested be included
in such Registration Statement or Prospectus.
(b) Indemnification by Participants. Each Participant (a
"Participant Indemnitor") in such registration, severally but not
jointly, will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the Registration
Statement and each other Person, if any, who controls the Company,
within the meaning of the Securities Act, each underwriter of
Registrable Securities and each Person, if any, who controls the
Company or any such underwriter within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act (collectively, the
"Company Indemnitees" and, individually, a "Company Indemnitee") and
each other Participant Indemnitor against all losses, claims, damages
or liabilities, joint or several, to which any of the Company
Indemnitees or the other Participant Indemnitors may become subject
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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 any untrue statement or alleged untrue statement of any
material fact contained in such Registration Statement, or Prospectus
contained therein, 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 under which they were
made, not misleading, but only if, and to the extent that, such
statement or omission is based on written information provided by the
Participant Indemnitor or a representation of a Participant Indemnitor,
that such Participant Indemnitor, has requested be included in such
Registration Statement or Prospectus, and will reimburse each Company
Indemnitee and each other Participant Indemnitor for all legal or other
expenses reasonably incurred by it in connection with investigating or
defending against such loss, claim, damage, liability or action;
provided, however, that the maximum amount of liability in respect of
such indemnification (including, but not limited to, attorneys' fees
and expenses) shall be limited, in the case of each Participant
Indemnitor, to an amount equal to the net proceeds actually received by
such Participant Indemnitor from the sale of Registrable Securities
under such registration statement.
(c) Indemnification Procedures. Promptly after receipt by a
Participant Indemnitee or a Company Indemnitee (collectively,
"Indemnitees" and, individually, an "Indemnitee") under Section 9(a) or
9(b) hereof of notice of the commencement of any action, such
Indemnitee will, if a claim in respect thereof is to be made against
the indemnifying party under such clause, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify
the indemnifying party will not relieve the indemnifying party from any
liability that it may have to any Indemnitee otherwise than under such
clauses. In case any such action shall be brought against any
Indemnitee, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such Indemnitee, and
after notice from the indemnifying party to such Indemnitee of its
election to assume the defense thereof, the indemnifying party shall
not be liable to such Indemnitee under such clause for any legal or
other expenses subsequently incurred by such Indemnitee in connection
with the defense thereof other than reasonable costs of investigation;
provided, however, that the Indemnitee shall have the right to employ
one counsel to represent such Indemnitee if, in the reasonable judgment
of such Indemnitee, it is advisable for such party to be represented by
separate counsel because separate defenses are available, or because a
conflict of interest exists between such indemnified and indemnifying
party in respect of such claim, and in that event the fees and expenses
of such separate counsel shall be paid by the indemnifying party.
Notwithstanding the foregoing, if the Company is an Indemnitee, the
Company shall designate the one counsel, and in all other
circumstances, the one counsel shall be designated by a majority in
interest based upon the Registrable Securities of the Indemnitees. For
purposes of this Section 9 the terms "control," and "controlling
person" have the meanings that they have under the Securities Act.
(d) Contribution. If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless an Indemnitee, then
the indemnifying party shall contribute to the amount paid or payable
by the Indemnitee as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the
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indemnifying party on the one hand and the Indemnitee on the other from
the registration or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, or provides a lesser sum to the
Indemnitee than the amount hereinafter calculated, in such proportion
as is appropriate to reflect not only the relative benefits received by
the indemnifying party on the one hand and the Indemnitee on the other
but also the relative fault of the indemnifying party and the
Indemnitee as well as any other relevant equitable considerations. The
relative fault of the Company, on the one hand, and the Purchasers, on
the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Purchasers and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. 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.
10. Reports Under Exchange Act. With a view to making available to the
Holders the benefits of Rule 144 promulgated under the Securities Act and any
other rule or regulation of the Commission that may at any time permit a Holder
to sell securities of the Company to the public without registration or pursuant
to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144, at all times so long as the
Company remains subject to the periodic reporting requirements under
Sections 13 or 15(d) of the Exchange Act;
(b) take such action, including the voluntary registration of
its Common Stock under Section 12 of the Exchange Act, as is necessary
to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities;
(c) file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act
and the Exchange Act; and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement
by the Company that it has complied with the reporting requirements of
Commission Rule 144, the Securities Act and the Exchange Act, or that
it qualifies as a registrant whose securities may be resold pursuant to
Form S-3, (ii) a copy of the most recent annual or quarterly report of
the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably
requested in availing any Holder of any rule or regulation of the
Commission which permits the selling of any such securities without
registration or pursuant to such form.
11. No Interference. From and after the date of this Agreement, the
Company shall not enter into any agreement with any holder or prospective holder
of any securities of the Company that would allow such holder or prospective
holder to have registration rights superior to or in conflict with the
registration rights of the Holders hereunder. The Company is not currently a
party to any agreement granting registration rights with respect to any of its
securities to any person which conflicts with the Company's obligations
hereunder or gives any other party the right to
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include any securities in any Registration Statement filed pursuant hereto,
except for such rights and conflicts as have been irrevocably waived.
12. Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Delaware, without giving effect to the
choice of law principles thereof.
13. Amendment and Modification. This Agreement may be amended, modified
or supplemented in any respect only by written agreement by the Company and
Holders owning two-thirds of the issued and outstanding shares of Registrable
Securities (or securities that are exercisable, convertible or exchangeable into
Registrable Securities) (provided that no such amendment shall unfairly
discriminate against a particular Holder relative to the other Holders). Any
action taken by the Holders, as provided in this Section 11, shall bind all
Holders.
14. Invalidity of Provision. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.
15. Notices. Any notice required or permitted under this Agreement
shall be given in writing and shall be deemed effectively given upon personal
delivery (which shall include delivery by responsible overnight carrier)to the
party to be notified or five days after deposit with the United States Post
Office, by registered or certified mail, postage prepaid and addressed to the
party to be notified at the address indicated for such party on the signature
page hereof, or at such other address as such party may designate by written
notice hereunder to the other parties, with a copy (which shall not constitute
notice) to (i), if to the Company, Xxxxxx & Xxxxxxx LLP, Xxxxxxxxx Center South,
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxxx Xxxxxx,
Esq., and (ii) if to any Holder, Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP,
000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxx X.
Xxxxx, Esq.
16. Headings; Execution in Counterparts. The headings and captions
contained herein are for convenience of reference only and shall not control or
affect the meaning or construction of any provision hereof. This Agreement may
be executed in any number of counterparts, each of which shall be deemed to be
an original and all of which together shall constitute one and the same
agreement.
17. Entire Agreement. This Agreement, including any exhibits hereto and
the documents and instruments referred to herein and therein, embodies the
entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to the subject
matter hereof.
18. Attorneys' Fees. If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or
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misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party or parties shall be entitled to recover such
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled,
as may be ordered in connection with such proceeding.
19. Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns.
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[COUNTERPART SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the day and year first above written.
FIELDWORKS, INCORPORATED
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Xxxxx X. Xxxx
President and Chief Executive Officer
Address: 0000 Xxxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
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[COUNTERPART SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the day and year first above written.
PURCHASER:
FWRKS ACQUISITION CORP.
By: /s/ Xxxxxx XxXxxxxx
-----------------------------------
Xxxxxx XxXxxxxx
President
Address: Teknor Applicom Inc.
000 Xxxx-Xxxxxx
Xxxxxxxxxx, XX Xxxxxx
X0X 0X0
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