EXHIBIT 10(e)
Registration Rights Agreement
dated July 1, 1994
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of this 1st day of
July 1995, between VERSUS TECHNOLOGY, INC., a Delaware
corporation (the "Corporation"), and the persons set forth on
Schedule A hereto (the "Lenders").
W I T N E S S E T H
WHEREAS, the Corporation agreed to provide the Lenders with
registration rights as set forth herein as further consideration
for the purchase by the Lenders of 11,250,000 shares of Common
Stock of the Corporation closing as of the date of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
terms and conditions hereof, the parties hereto agree as follows:
1. Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
Affiliate and Associate: Such terms shall have the respective
meanings assigned to them pursuant to Rule 12b-2 under the Exchange
Act.
Commission: The United States Securities and Exchange
Commission and any successor federal agency having similar powers.
Exchange Act: The Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and
regulations thereunder, all as at the time in effect.
Person: An individual, partnership, joint venture, corpora-
tion, trust, unincorporated organization or the government or any
department or agency thereof.
Registrable Securities: All of the Corporation's restricted
Common Stock, $.01 par value ("Common Stock") purchased by the
Lenders as of the date of this Agreement.
Registration Expenses: Except as otherwise specifically
provided herein, all of the Corporation's out-of-pocket expenses,
without limitation as to amount, incident to the Corporation's
performance of or compliance with Section 2 herein, including,
without limitation, all fees and expenses, outside messenger and
delivery expenses, the fees and disbursements of counsel for the
Corporation and of its independent public accountant, and any fees
and disbursements of underwriters customarily paid by issuers or
sellers of securities and the expenses of one firm of attorneys who
shall represent the Lenders. Registration Expenses shall not
include any underwriter's discounts, commissions or transfer taxes
paid by the Lenders.
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Securities Act: The Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations
thereunder, all as at the time in effect.
2. Registration
2.1 Registration on Request (Demand Registration). (a)
Request. At any one time more than six (6) months after the date
hereof, upon the written request of a majority in interest of
Lenders that the Corporation effect the registration under the
Securities Act of all or part of each Lender's Registrable
Securities specifying the intended method or methods of disposition
thereof, the Corporation will use its best efforts to effect the
registration under the Securities Act of such securities to permit
their disposition (in accordance with the intended methods thereof
as aforesaid) and keep such registration open for a period of not
less than nine (9) months, provided that if such registration may
then be effected by the Corporation on Form S-3 or Form S-3B or any
successor Form of registration, then the Corporation shall keep
such registration effective until the Registerable Securities may
be sold publicly pursuant to Rule 144 by persons who are not
affiliates of the Company.
(b) Registration Statement Form. Registrations under this
Section 2.1 shall be on an appropriate registration form of the
Commission as determined by the Corporation and shall permit the
disposition of the Registrable Securities in accordance with the
intended method or methods of disposition specified in the
Lenders' request for such registration.
(c) Expenses. The Corporation will pay all Registration
Expenses in connection with any registration of the Registrable
Securities.
2.2 Incidental Registration (Piggyback Registration). (a)
Notice and Request. If the Corporation at any time proposes to
register any of its securities under the Securities Act (except
registrations solely for registration of shares in connection with
an employee benefit plan or a merger or consolidation), whether or
not for sale for its own account, it will each such time give
prompt written notice to the Lenders of its intention to do so.
Upon the written request of any Lender within 30 days after the
receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by the Lender,
the Corporation will use its best efforts to effect the registra-
tion under the Securities Act of all Registrable Securities which
the Corporation has been so requested to register by the Lender
as part of the incidental registration, provided that if the
Corporation shall determine for any reason not to register or to
delay registration of such securities the Corporation may, at its
election, give written notice of such determination to the
Lenders, and, thereupon, (i) in the case of a determination not
to register, shall be relieved of its obligation to register any
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Registrable Securities in connection with such registration,
without prejudice, however, to the rights of the Lenders to
request that such registration be effected as a registration under
Section 2.1, and (ii) in the case of a determination to delay
registering, shall be permitted to delay registering any
Registrable Securities, for the same period as the delay in
registering such other securities. No registration effected under
this Section 2.2 shall relieve the Company of its obligation to
effect any registration upon request under Section 2.1. The
Registration Expenses of the Lenders shall be paid by the
Corporation.
(b) Underwriters Cutback. If, in any incidental registration
referred to in Section 2.2(a) above, the managing underwriter or
underwriters thereof shall advise the Corporation in writing that
in its or their reasonable opinion the number of securities
proposed to be sold in such registration exceeds the number that
can be sold in such offering without having a material effect on
the success of the offering (including, without limitation, an
impact on the selling price or the number of shares that any
participant may sell), the Corporation will include in such
registration only the number of securities that, in the reasonable
opinion of such underwriter or underwriters can be sold without
having a material adverse effect on the success of the offering as
follows: (i) first, all of the shares to be issued and sold by the
Corporation and (ii) second, the Registrable Securities requested
to be included in such registration by the Lenders and any other
Person pro rata on the basis of the aggregate number of shares
requested to be included.
(c) Sales during Registration. The Lenders participating
in the incidental registration agree, if requested by the managing
underwriter in an underwritten public offering, not to effect any
public sale or distribution of securities of the Corporation of the
same class as the Registrable Securities so registered, including
a sale pursuant to Rule 144 under the Securities Act (except as
part of such underwritten offering), during the ten-day period
prior to, and during the 90-day period beginning on, the closing
date of the underwritten offering. The Lender agrees that it
shall undertake, in its request to participate in any such
underwritten offering, not to effect any public sale or
distribution of any applicable class of Registrable Securities
during the 90-day period commencing on the date of sale of such
applicable class of Registrable Securities unless it has provided
90 days prior written notice of such sale or distribution to the
underwriter(s).
2.3 Registration Procedures. Whenever the Corporation is
required to effect the registration of any Registrable Securities
under the Securities Act as provided in Sections 2.1 and 2.2, it
shall, as expeditiously as possible:
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(i) prepare and (within 120 days after a request
for registration is given to the Corporation or as soon thereafter
as possible) file with the Commission a registration statement with
respect to such Registrable Securities and use its best efforts to
cause such registration statement to become effective;
(ii) prepare and file with the Commission such
amendments and supplements to the registration statement and
prospectus used in connection therewith as may be necessary to keep
such registration statement effective and to comply with the
provisions of the Securities Act for nine (9) months if under 2.1
and 90 days if under 2.2;
(iii) furnish to each Lender participating such
number of conformed copies of such registration statement and of
each amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus contained in
such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under
Rule 424 under the Securities Act, in conformity with the require-
ments of the Securities Act, and such other documents, as such
Lender may reasonably request;
(iv) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such
registration statements under such other securities or blue sky
laws of such jurisdictions where an exemption is not available and
as the Lenders participating shall reasonably request, to keep
such registration or qualification in effect for so long as such
registration statement remains in effect, and take any other action
which may be reasonably necessary or advisable to enable the
Lenders participating to consummate the disposition in such
jurisdictions of the securities owned by them, except that the
Corporation shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdic-
tion wherein it would not but for the requirements of this
subdivision (iv) be obligated to be so qualified or to consent to
general service of process in any such jurisdiction; and
(v) notify each Lender participating, at any time
when a prospectus forming a part of such registration statement is
required to be delivered under the Securities Act, upon discovery
that, or upon 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 any material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the
circumstances under which they were made, and at the request of the
participating Lenders promptly prepare and furnish to the
participating Lenders a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of
such securities, such prospectus shall not include an untrue
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statement of a material fact or omit 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 under
which they are made.
2.4 Limitations, Conditions and Qualifications to Obligations
under Registration Covenants. The obligations of the Corporation
to use its reasonable efforts to cause the Registrable Securities
to be registered under the Securities Act are subject to each of
the following limitations, conditions and qualifications.
(a) The Corporation shall not be obligated to file any
registration statement pursuant to Section 2.1 hereof at any time
if the Corporation would be required to include financial state-
ments audited as of any date other than the end of its fiscal year.
(b) The Corporation shall be entitled to postpone for a
period of time (which in the judgment of the Corporation is
reasonable under the circumstances) the filing of any registration
statement otherwise required to be prepared and filed by it
pursuant to Section 2.1 if the Corporation determines, in its
reasonable judgment, that such registration and offering would
interfere with any financing, acquisition, corporate reorganization
or other proposed material transaction involving the Corporation or
any of its Affiliates or that it would require the Corporation to
disclose material non-public information that it deems advisable
not to disclose and promptly gives the Lender written notice of
such determination. Further, the Corporation shall have the right
to require each Lender participating not to sell securities in a
public offering for a period of up to 90 days during the effective-
ness of any registration statement if the Corporation shall
determine that such sale would interfere with any transaction
involving the Corporation as described above or that such registra-
tion would require disclosure of such material non-public informa-
tion. If pursuant to the preceding sentence the Corporation has
required the Lender to discontinue the sale of securities during
the effectiveness of a registration statement, then the period of
time any such registration statement must be kept effective
pursuant to Section 2.3(ii) hereof shall be extended for a period
equal to the length of such discontinuance.
(c) If the Lender proposes that the sale of
Registrable Securities pursuant to Section 2.1 hereof be an
underwritten offering, the Corporation shall have the right to
approve the choice of underwriters who undertake such offering.
2.5 Indemnification. (a) Indemnification by the Corpora-
tion. In the event of any registration of any Registrable
Securities of the Corporation under the Securities Act pursuant to
Section 2.1 or 2.2, the Corporation will, and hereby does,
indemnify and hold harmless, each Lender, its directors and
officers, any underwriter and each other Person, if any, who
controls any Lender or any such underwriter, against any losses,
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claims, damages or liabilities, to which any Lender or any such
director or officer or underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based
upon any untrue statement of any material fact contained in any
registration statement under which such securities were registered
under the Securities Act or any prospectus contained therein, or
any omission or alleged omissions to state therein a material fact
required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made not
misleading, and the Corporation will reimburse each Lender, and
each such director, officer, underwriter and controlling person for
any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim or
liability or action or proceeding in respect thereof; provided that
the Corporation shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or expense arises out
of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement
or any such prospectus, in reliance upon and in conformity with
written information furnished to the Corporation by or on behalf of
any Lender or underwriter, as the case may be, specifically
stating that it is for use in the preparation thereof; and
provided, further, that the Corporation shall not be liable in any
case to the extent that such loss, claim, damage, liability or
expense arises out of an untrue or alleged untrue statement or
omission or alleged omission in a prospectus, if such statement or
omission is corrected in an amendment or supplement to the
prospectus and the Lender thereafter fails to deliver such
prospectus as amended or supplemented prior to or concurrently with
the sale of the Registrable Securities. Such indemnity shall
remain in full force and effect regardless of any investigation
made by or on behalf of any Lender, or any such director, officer
or controlling person and shall survive the transfer of such
securities by the Lender.
(b) Indemnification by the Lenders. The Corporation
may require, as a condition to including any Registrable Securities
in any registration statement filed pursuant to Section 2.1 or 2.2,
that the Corporation shall have received an undertaking satisfacto-
ry in all respects to it from each Lender participating, to
indemnify and hold harmless (in the same manner and to the same
extent as set forth in subdivision (a) of this Section 2.5) the
Corporation, each director of the Corporation, each officer of the
Corporation and each other person, if any, who control the
Corporation within the meaning of the Securities Act, with respect
to any statement or alleged statement in or omission or alleged
omission from such registration statement or any prospectus
contained therein, if such statement or alleged statement or
omission or alleged omission was made in reliance upon or in
conformity with written information furnished to the Corporation by
the Lender for use in the preparation of such registration
statement or prospectus. Such indemnity shall remain in full force
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and effect, regardless of any investigation made by or on behalf of
the Corporation or any such director, officer or controlling person
and shall survive the transfer of such securities by the Lender.
(c) Notices of Claims, etc. Promptly after receipt by
an indemnified party of notice of the commencement of any action or
proceeding involving a claim referred to in the preceding subdivi-
sions of this Section 2.5, such indemnified party will, if a claim
in respect thereof is to be made against an indemnifying party,
give written notice to the latter of the commencement of such
action, provided that the failure of any indemnified party to give
notice as provided herein shall not relieve the indemnifying party
of its obligations under the preceding subdivisions of this Section
3.6, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action
is brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such
claim, the indemnifying party shall be entitled to participate in
and to assume the defense thereof, jointly with any other indemni-
fying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection
with the defense thereof other than reasonable costs of investiga-
tion. No indemnifying party shall be liable for any settlement of
any action or proceeding effected without its written consent. No
indemnifying party shall, without the consent of the indemnified
party, consent to entry of any judgment or enter into any settle-
ment which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such claim or litigation.
(d) Other Indemnification. Indemnification similar to
that specified in the preceding subdivisions of this Section 2.5
(with appropriate modifications) shall be given by the Corporation
and each Lender participating with respect to any required
registration or other qualification of securities under any Federal
or state law or regulation of any governmental authority other than
the Securities Act.
3. Notices. All communication provided for hereunder shall
be sent by first-class mail and, if to a Lender, addressed to it
at the address set forth on Exhibit A, or to such other address as
the Lender may have designated to the Corporation in writing,
and, if to the Corporation, addressed to it at c/o Olmsted
Engineering, 0000 Xxxx Xxxx Xxxxx, Xxxxxxxx Xxxx, XX 00000,
Attention: President, or to such other address as the Corporation
may have designated to the Lender in writing.
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4. Assignment. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns.
5. Descriptive Headings. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for
reference only and shall not limit or otherwise affect the meaning
hereof.
6. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be
governed by, the laws of the State of Michigan.
7. Counterparts. This Agreement may be executed simulta-
neously in any number of counterparts, each of which shall be
deemed an original, but all such counterparts shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their respective officers thereunto
duly authorized as of the date first above written.
VERSUS TECHNOLOGY, INC.
By: XXXX X. XXXXXXX
_______________________
Name: Xxxx X. Xxxxxxx
Title: President
The Lenders by their Agent-in-Fact
pursuant to Subscription Agreements
signed by them
BDS SECURITIES CORPORATION
By: XXXXXX XXXXXXXX
____________________
Name: Xxxxxx Xxxxxxxxx, President
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Schedule A
Versus Technology, Inc.
Investors
Name & Address Amount Warrants Telephone Fax
Xxxx X. Xxxx $50,000 25,000
00 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxxxxx, XX 00000
Xxxxxx Xxxxxxxxx 50,000 25,000
c/o BDS Securities Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxx X. Xxxxxxx 50,000 25,000
000 Xxxxxxxxx Xxxx.
Xxxxxx Xxxxx, XX 00000
Xxxxxxx Xxxxxxx 50,000 25,000
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Xxxxx Snowday 50,000 25,000
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx Xxxx, XX 00000
Olmsted Engineering 100,000 50,000
0000 Xxxx Xxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Chase Manhattan Bank, 200,000 100,000
Custodian for Xxxxxx Xxxxxxxxx
XXX Rollover, CUST #5000-4957
ATTN: Xxx Xxxxxxxx, Tenth Floor
0000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000 ______ ______
$550,000 275,000
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