REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of February 27, 1997,
by and among IAT Multimedia, Inc., a Delaware corporation (the "Company"),
Vertical Financial Holdings, a Delaware corporation ("Vertical"), and Walther
Glas GmbH, a company organized under the laws of Germany ("Walther Glas").
W I T N E S S E T H
WHEREAS, in or about the first week of February 1997 the
Company received an aggregate of approximately $500,000 in stockholder loans
from Vertical, Walther Glas, Xxxxxx Xxxx and Xxxxx-Xxxx Xxxxxx;
WHEREAS, Vertical has been granted certain registration rights
pursuant to that certain Investor's Rights Agreement, dated as of October 4,
1996 (the "Investor's Rights Agreement"), by and between the Company and
Vertical;
WHEREAS, Walther Glas, Xxxxxx Xxxx and Xxxxx-Xxxx Xxxxxx (the
"Registration Rights Group") have not previously been granted registration
rights and the Company deemed it to be in its best interest to grant each of
Walther Glas and Xxxxx-Xxxx Xxxxxx certain registration rights in respect of all
of the shares of Common Stock (the "Glas Common Stock" and the "Xxxxxx Common
Stock", respectively) held by Walther Glas and Xxxxx-Xxxx Xxxxxx, respectively,
as of the Effective Date (as herein defined) and to Xxxxxx Xxxx certain
registration rights in respect of an aggregate of 250,000 shares of Common Stock
held by Xxxxxx Xxxx as of the Effective Date (the "Xxxx Common Stock");
WHEREAS, the Company and Vertical have entered into
Registration Rights Agreements (of which this agreement is one) with each of
Walther Glas, Xxxxxx Xxxx and Xxxxx-Xxxx Xxxxxx (the "Registration Rights
Agreements"); and
WHEREAS, the Company has proposed to enter into an
Underwriting Agreement with the several underwriters (the "Underwriters")
providing for the public offering (the "Public Offering") by the Underwriters,
including Royce Investment Group, Inc. ("Royce") as Representative of the
Underwriters, of shares of Common Stock.
NOW, THEREFORE, in consideration of the foregoing, the parties
hereto agree as follows:
1. Registration Rights. The Company covenants and agrees as
follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term "Act" means the Securities Act of 1933, as
amended.
(b) The term "Common Stock" means shares of the common stock
of the Company, par value $.01 per share.
(c) The term "Covered Securities" means the Glas Common Stock,
Xxxx Common Stock and Xxxxxx Common Stock which the respective member of the
Registration Rights Group has requested the Company to register pursuant to
Section 1.2 or 1.3 of his Registration Rights Agreement.
(d) The term "Effective Date" means the date of the final
prospectus related to the Public Offering.
(e) The term "Form S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits the inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(f) The term "1934 Act" means the Securities Exchange Act of
1934, as amended.
(g) The term "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document.
(h) The term "Registerable Securities" has the meaning set
forth in the Investor's Rights Agreement.
(i) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 Request for Registration.
(a) If the Company shall receive at any time after the
Effective Date a written request from Walther Glas that the Company file a
registration statement under the Act covering the registration of at least 25%
of the shares of Glas Common Stock held by Walther Glas as of the Effective
Date, the Company shall file as soon as practicable, and in any event within 60
days of the receipt of such request, and use all reasonable efforts to cause to
become effective as soon as practicable, the registration under the Act of all
the Covered Securities which Walther Glas requests to be registered, subject to
the limitations of Subsections 1.2(b) and 1.2(c) and Section 1.12.
(b) If Walther Glas intends to distribute the Covered
Securities covered by its request by means of an underwriting, it shall so
advise the Company as a part of its request made pursuant to Subsection 1.2(a).
The underwriter will be selected by the Company and shall be acceptable to
Walther Glas, which acceptance shall not be unreasonably withheld. Walther Glas
shall (together with the Company as provided in Subsection 1.4(e)) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting.
-2-
Notwithstanding any other provision of this Section 1.2, if the underwriter
advises Walther Glas in writing that marketing factors require a limitation of
the number of shares to be underwritten, then the Company shall exclude from
such underwriting (i) first, the maximum number of securities, if any, other
than the Covered Securities and Registrable Securities, being sold for the
account of other than the Company, as is necessary to reduce the size of the
offering and (ii) second, the minimum number of Covered Securities, divided pro
rata to the extent practicable, among the number of Covered Securities requested
to be registered by the members of the Registration Rights Group, as is
necessary in the opinion of the managing underwriter(s) to reduce the size of
the offering.
(c) In addition, the Company shall not be obligated to effect,
or to take any action to effect, any registration pursuant to this Section 1.2
after the Company has effected one registration pursuant to a demand made by
Walther Glas under the provisions of this Section 1.2.
1.3 Company Registration. If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration effected
by the Company for stockholders other than Walther Glas) any of its stock or
other securities under the Act in connection with the public offering of such
securities (other than a registration relating solely to the sale of securities
to participants in a Company stock plan, a registration relating solely to a
Rule 145 transaction, a registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the shares of Common Stock or a
registration in which the only Common Stock being registered is Common Stock
issuable upon conversion of debt securities which are also being registered),
the Company shall, at such time, promptly give Walther Glas written notice of
such registration. Upon the written request of Walther Glas given within 20 days
after giving of such notice by the Company in accordance with Section 3.5, the
Company shall, subject to the limitations of Sections 1.8 and 1.12, cause to be
registered under the Act all of the shares of Glas Common Stock that Walther
Glas has requested to be registered.
1.4 Obligations of the Company. Whenever required under this Section 1
to effect the registration of any shares of Common Stock, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such shares of Common Stock and use its best efforts to cause
such registration statement to become effective, and keep such registration
statement effective for a period of up to 120 days or until the distribution
contemplated in the Registration Statement has been completed, whichever first
occurs; provided, however, that such 120 day period shall be extended for a
period of time equal to the period Walther Glas refrains from selling any
securities included in such registration at the request of an underwriter of
Common Stock (or other securities) of the Company, and provided further that in
the case of any registration of shares of Common Stock on Form S-3 that are
intended to be offered on a continuous or delayed basis, such 120 day period
shall be extended until all such shares of Common Stock are sold, if applicable
rules under the Act governing the obligation to file a post-effective amendment
permit, in lieu of filing a post-effective amendment which (I) includes any
-3-
prospectus required by Section 10(a)(3) of the Act or (II) reflects facts or
events representing a material or fundamental change in the information set
forth in the registration statement, the incorporation by reference of
information required to be included in (I) and (II) above to be contained in
periodic reports filed pursuant to Section 13 or 15(d) of the 1934 Act in the
registration statement.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as, in the opinion of counsel to the Company,
may be necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement.
(c) Furnish to Walther Glas such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as Walther Glas may reasonably
request in order to facilitate the disposition of the Covered Securities owned
by it.
(d) Use its best efforts to register and qualify the Covered
Securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by Walther
Glas; provided that the Company shall not be required in connection therewith or
as a condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Act.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering.
(f) Notify Walther Glas at any time when a prospectus relating
to Walther Glas' Covered Securities covered by such registration statement is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(g) Cause all such Covered Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all Covered
Securities registered pursuant hereunder and a CUSIP number for all Covered
Securities, in each case not later than the effective date of such registration.
(i) Furnish, on the date that such Covered Securities are
delivered to the underwriters for sale in connection with the registration
pursuant to this Section 1, if such Covered
-4-
Securities are being sold through underwriters, or, if such Covered Securities
are not being sold through underwriters, on the date that the registration
statement with respect to such Covered Securities becomes effective, (i) an
opinion, dated such date, of counsel representing the Company for the purposes
of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to Walther Glas, and (ii) a letter, dated such date, from the
independent certified public accountants of the Company, in form and substance
as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to Walther Glas.
1.5 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 1 with
respect to the Covered Securities of Walther Glas that Walther Glas shall
furnish to the Company such information regarding itself, the shares of Common
Stock held by it, and the intended method of disposition of such securities as
shall be required to effect the registration of Walther Glas' Covered
Securities.
1.6 Expenses of Demand Registration. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company and the
reasonable fees and disbursements of one counsel for Walther Glas, shall be
borne by the Company.
1.7 Expenses of Company Registration. The Company shall bear and pay
all expenses incurred in connection with any registration, filing or
qualification of shares of Common Stock with respect to the registrations
pursuant to Sections 1.2 or 1.3 for Walther Glas, including (without limitation)
all registration, filing, and qualification fees, printers' and accounting fees
relating or apportionable thereto and, for one such registration only, the
reasonable fees and disbursements of one counsel for Walther Glas, but excluding
underwriting discounts and commissions relating to the Covered Securities.
1.8 Underwriting Requirements. In connection with any offering
involving an underwriting of shares of the Company's capital stock pursuant to
Section 1.3, the Company shall not be required under Section 1.3 to include any
of Walther Glas' Covered Securities in such underwriting unless Walther Glas
accepts the terms of the underwriting as agreed upon between the Company and the
underwriters, and then only in such quantity as the underwriters determine in
their sole discretion will not jeopardize the success of the offering by the
Company. If the total amount of Covered Securities requested by Walther Glas to
be included in such offering, exceeds the amount of securities sold other than
by the Company and the Registrable Securities that the underwriters determine in
their sole discretion is compatible with the success of the offering, then the
Company shall exclude from such underwriting (i) first, the maximum number of
securities, if any, other than the Covered Securities and Registrable
Securities, being sold for the account of other than the Company, as is
necessary to reduce the size of the offering and (ii) second, the minimum number
of Covered Securities, divided pro rata to the extent practicable, among the
number of Covered
-5-
Securities requested to be registered by the members of the Registration Rights
Group, as is necessary in the opinion of the managing underwriter(s) to reduce
the size of the offering.
1.9 Indemnification. In the event any Covered Securities are included
in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless Walther Glas, any underwriter (as defined in the Act) for
Walther Glas and each person, if any, who controls Walther Glas or such
underwriter within the meaning of the Act or the 1934 Act, against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Act, the 1934 Act or state securities and blue sky laws, or
otherwise insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto and any document filed in
connection therewith or in connection with any registration or qualification
under the state securities and blue sky laws, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Act, the 1934 Act or state securities
and blue sky laws or any rule or regulation promulgated under the Act, the 1934
Act or state securities and blue sky laws and the Company will pay to Walther
Glas, such underwriter or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the Company shall not be liable in any such case for any such loss, claim,
damage, liability, or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
Walther Glas, any such underwriter or controlling person; provided, however,
that the indemnity agreement contained in this Subsection 1.9(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Company, which
consent shall not be unreasonably withheld.
(b) To the extent permitted by law, Walther Glas will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
stockholder selling securities in such registration statement and any
controlling person of any such underwriter or other stockholder, against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Act, or the 1934 Act, insofar as
such losses, claims, damages, or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by Walther Glas expressly for use
in connection with such registration; and Walther Glas will pay, as incurred,
any legal or other expenses reasonably incurred by any person intended to be
-6-
indemnified pursuant to this Subsection 1.9(b), in connection with investigating
or defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this Subsection 1.9(b) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of
Walther Glas, which consent shall not be unreasonably withheld; provided, that,
in no event shall Walther Glas' liability under this Subsection 1.9(b) exceed
the proceeds received by Walther Glas from the offering (net of any underwriting
discounts and commissions).
(c) Promptly after receipt by an indemnified party under this
Section 1.9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of its liability under this Section 1.9, but (i) only to the
extent of the liability actually resulting from the failure to deliver written
notice and (ii) the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 1.9.
(d) If the indemnification provided for in this Section 1.9 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission; provided, that in no event shall Walther Glas' liability
under this Section 1.9(d) exceed the proceeds received by Walther Glas from the
offering (net of any underwriting discounts and commissions).
-7-
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Walther Glas under this
Section 1.9 shall survive the completion of any offering of Covered Securities
in a registration statement under this Section 1, and otherwise.
1.10 Reports Under Securities Exchange Act of 1934. With a view to
making available to Walther Glas the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit
Walther Glas 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 SEC Rule 144, at all times after 90 days after the
effective date of the first registration statement filed by the Company for the
offering of its securities to the general public;
(b) take such action, including the voluntary registration of
its Common Stock under Section 12 of the 1934 Act, as is necessary to enable
Walther Glas to utilize Form S-3 for the sale of its shares of Common Stock,
such action to be taken as soon as practicable after the end of the fiscal year
in which the first registration statement filed by the Company for the offering
of its securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to Walther Glas, so long as Walther Glas owns any
shares of Common Stock, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at
any time after 90 days after the effective date of the first registration
statement filed by the Company), the Act and the 1934 Act (at any time after it
has become subject to such reporting requirements), (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 Walther Glas of any rule or regulation of the
SEC which permits the selling of any such securities without registration or
pursuant to such form.
1.11 Assignment of Registration Rights. Subject to the provisions of
Section 1.12 and the other limitations herein, the rights to cause the Company
to register shares of Glas Common Stock pursuant to this Section 1 may be
assigned (but only with all related obligations) by Walther Glas to any
transferee or assignee of such securities; provided that (a) the Company is,
within a reasonable time after such transfer, furnished with written notice of
the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned; and
-8-
(b) such transferee or assignee agrees in writing to be bound by and subject to
the terms and conditions of this Agreement. The term "Walther Glas" shall
include any such assignee.
1.12 Approval of Vertical. The exercise by Walther Glas of any
registration rights pursuant to Sections 1.2 or 1.3 hereof and the assignment of
registration rights pursuant to Section 1.12 hereof are subject to the prior
written consent of Vertical.
2. Miscellaneous.
2.1 Successors and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of shares of Common Stock). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
2.2 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of New York, disregarding New York principles of
conflicts of laws which would otherwise provide for the application of the
substantive laws of another jurisdiction. The parties agree that all actions or
proceedings arising in connection with this Agreement shall be tried and
litigated only in the State of New York. The parties waive any right they may
have to assert the doctrine of forum non conveniens or to object to such venue,
and hereby consent to court ordered relief.
2.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
2.4 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
2.5 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery or delivery by facsimile to the party
to be notified or four days after deposit with an air courier, the United States
Post Office or air courier in the case of non-U.S. parties, 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 ten days' advance written notice to the
other parties.
2.6 Expenses. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys' fees, costs and necessary disbursements in addition to
any other relief to which such party may be entitled.
-9-
2.7 Amendments and Waivers. Any term of this Agreement may be amended
only with the consent of the Company, Vertical and Walther Glas. The observance
of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of the Company and Vertical.
2.8 Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
IAT MULTIMEDIA, INC.
By: /s/ Xxxxxx Xxxx
-----------------------------
Name: Xxxxxx Xxxx
Title: Chief Executive Officer
Address: Xxxxxxxxxxx 00, Xxxxxxxxx-Xxxxx, Xxxxxxxxxxx
Facsimile Telephone Number: 000-00-00-000-0000
VERTICAL FINANCIAL HOLDINGS
By: /s/ Xxxxx Xxxx
-----------------------------
Name: Xxxxx Xxxx
Title: Director
Address: 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
Facsimile Telephone Number: 000-000-0000
WALTHER GLAS GmbH
By: /s/ Xxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxx
Title: CEO
Address: Glasmuttenlieg 23
Facsimile Telephone Number: 05253/85-200
-10-
