EXHIBIT 1(e)
REGISTRATION RIGHTS AGREEMENT
DATED: December 11, 1996
Reference is made to: (a) that certain Agreement and Plan of Merger
(the "BTS Merger Agreement"), dated December 11, 1996 among AMERICAN UNITED
GLOBAL, INC., a Delaware corporation ("AUGI"); BTS ACQUISITION CORP., a Delaware
corporation ("Mergerco"); BROADCAST TOWER SITES, INC., a Delaware corporation
("BTS"); SIMANTOV MOSKONA ("Moskona"); and XXXXXX XXXXXXX ("Xxxxxxx"); and (b)
that certain Agreement and Plan of Merger (the "Arcadia Merger Agreement"), also
dated December 11, 1996 among AUGI; ARCADIA CONSULTING SERVICES, INC., a
Delaware corporation ("Arcadia") and XXXXX X. XXXXXX ("Xxxxxx"). The BTS Merger
Agreement and the Arcadia Merger Agreement are hereinafter collectively referred
to as the "Merger Agreements." Moskona, Xxxxxxx and Xxxxxx are hereinafter
individually referred to as a "Stockholder" and collectively as the
"Stockholders."
In order to induce Moskona and Xxxxxxx to enter into the BTS Merger
Agreement and to induce Xxxxxx to enter into the Arcadia Merger Agreement, and
for other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, each of AUGI and the Stockholders do hereby agree as follows:
1. Certain Defined Term. For purposes of this Agreement, the term
"Registrable Securities" shall mean and include the individual or collective
reference to: (i) the 507,246 shares of AUGI Common Stock issued to Moskona and
Xxxxxxx upon consummation of the merger (the "BTS Merger") described in the BTS
Merger Agreement and designated therein as the "AUGI Merger Stock"; (ii) the
192,754 shares of AUGI Common Stock to be issued to Xxxxxx upon consummation of
the merger (the "Arcadia Merger") described in the Arcadia Merger Agreement and
designated therein as the "AUGI Merger Stock"; and (iii) all additional shares
of AUGI Common Stock issuable to the Stockholders upon the vesting and permitted
exercise of options to purchase shares of AUGI Common Stock granted to such
Stockholders pursuant to their respective employment agreements entered into in
connection with the consummation of the BTS Merger and Arcadia Merger,
respectively (the "AUGI Option Stock").
Unless otherwise expressly defined herein, all capitalized terms used in
this Registration Rights Agreement shall have the same meaning as is defined in
the BTS Merger Agreement.
As to any particular Registrable Securities, such securities shall cease
to be Registrable Securities when:
(A) a registration statement with respect to the sale of
such securities shall have become effective under the
Securities Act and such securities shall have been disposed of
in accordance with such registration statement,
(B) all of such securities may be sold under Rule 144
(or any successor provision) during any three-month period
under the Securities Act,
(C) such securities shall have been otherwise
transferred and new certificates for them not bearing a legend
restricting further transfer shall have been delivered by AUGI
in accordance with applicable law,
(D) such securities shall have ceased to be outstanding,
or
(E) a Stockholder shall have been offered the
opportunity to have all of such Stockholder's Registrable
Securities sold pursuant to two or more such Registration
Statements (singly or in the aggregate), the effective dates
of at least two of such registration statements being not less
than six (6) months apart, but has elected not to cause such
Registrable Securities to be covered thereby.
1A. General. Notwithstanding any other provision of this Agreement, in no
event shall any underwriter cutback provisions contained herein (i) apply to the
82,884 shares of AUGI Common Stock issuable to Xxxxxx on the Closing Date of the
Arcadia Merger, or (ii) reduce or otherwise limit the ability of any of the
Stockholders to sell the maximum number of shares of AUGI Common Stock which
they are permitted to sell during any three-month period pursuant to Section
2(d) hereof; it being understood that AUGI shall have effected, pursuant to
Section 2(a) hereof of the maximum number of shares which all Stockholders are
permitted to sell during each three-month period referred to in such Section
2(d) no later than the first day of each such three-month period.
2. Demand Registration Rights.
(a) Filing of Demand Registration Statement. As soon as reasonably
practicable following the Closing Date of the BTS Merger and the date of
execution of the Arcadia Merger Agreement, AUGI shall file a Registration
Statement under the Securities Act, on a registration statement form then
available to AUGI and the Stockholders for such purpose (the "Demand
Registration Statement"), to register for sale by the Stockholders all (and not
less than all) of the AUGI Merger Stock. AUGI shall use its best efforts to
cause such Demand Registration Statement to be declared effective by the
Securities and Exchange Commission (the "Commission") on a date which shall be
not later than June 30, 1997. In such connection, AUGI shall (i) promptly file
all amendments to the Demand Registration Statement in response to all letters
of comments and other correspondence from the Commission, and (ii) at AUGI's
sole expense, shall bear all costs of registering the AUGI Merger Stock and
other securities included therein, including all filing fees, professional fees
of counsel and auditors to AUGI, printing fees, blue sky fees and expenses, fees
of underwriters and underwriters' counsel, printing costs and the like;
provided, that the Stockholders shall be solely responsible to pay all fees and
expenses of legal counsel and accountants engaged by the Stockholders,
commissions incurred in connection with the sale of AUGI Merger Stock, and all
income, capital gains and related taxes in connection with the sale of any such
AUGI Merger Stock.
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(b) Primary and Secondary Offerings. Notwithstanding anything to the
contrary, express or implied contained herein, the Stockholders hereby agree
that the Demand Registration Statement may include therein other AUGI securities
(including AUGI Common Stock) which AUGI shall be registering, either for its
own account, and/or for the account of other AUGI securityholders, in addition
to the Stockholders (collectively, with the Stockholders, the "AUGI
Registrants").
(c) Underwritten Offerings; Underwriters' Cutback. AUGI may, at its
sole and exclusive option, select one or more investment banker(s) acceptable to
AUGI, to manage and underwrite one or more offerings of AUGI securities,
including the AUGI Merger Stock, covered by any Demand Registration Statement
contemplated hereby. AUGI agrees to use its best efforts to cause a Demand
Registration Statement in respect of the AUGI Merger Stock to remain current for
a period of at least twenty four (24) months from the effective date of the
Arcadia Merger, and, in such connection, shall file such post-effective
amendments to the Demand Registration Statement or additional Demand
Registration Statements as shall be required by the applicable rules and
regulations of the Commission to enable the Stockholders (subject at all times
to the restrictions contained in Section 2(d) hereof) to effect sales and
distributions from time to time during such twenty-four (24) month period of
their AUGI Merger Stock pursuant thereto. Notwithstanding the foregoing, if the
managing underwriter for any offering of Registrable Securities effected
pursuant to Section 2 of this Agreement shall determine in good faith and advise
AUGI and the AUGI Registrants in writing that the inclusion in any registration
effected pursuant to this Agreement of some or all of the Registrable Securities
and/or other securities sought to be registered for AUGI Registrants creates a
substantial risk that the proceeds or the price per share that AUGI and/or such
AUGI Registrants will derive from such offering will be reduced or that the
number of securities to be registered (including those sought to be registered
at the instance of AUGI and/or such AUGI Registrants as well as those sought to
be registered by the Stockholders holding Registrable Securities) is too large a
number to be reasonably sold, AUGI will include in such registration to the
extent which AUGI is so advised they can be sold in such offering (the "Maximum
Number"), at the option of AUGI, either (i) the number of securities sought to
be registered by each seller (which term shall include each AUGI Registrant, as
well as the Stockholders holding Registrable Securities) reduced pro rata among
such sellers in proportion to the number of securities sought to be registered
by all such sellers or, (ii) (A) first, securities to be registered at the
instance of AUGI, if any, and (B) second, if the number of securities to be
registered under clause (A) is less than the Maximum Number, securities to be
registered by all other sellers pro rata as aforesaid.
(d) Lock-Up Agreement. Notwithstanding anything to the contrary in
this Agreement, each of the Stockholders does hereby covenant and agree that all
Registrable Securities now or hereafter owned of record by him which shall be
registered under the Securities Act of 1933, as amended, pursuant to a Demand
Registration contemplated by this Section 2 or a Piggyback Registration
contemplated by Section 3 below:
(i) may not be sold, transferred or otherwise subject to any
public distribution for a period of twelve (12) consecutive
months from the Closing Date of the BTS Merger (the "Initial
Twelve Month Period"); and
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(ii) thereafter shall be limited, in each consecutive
quarterly period of three (3) months each, commencing after
the expiration of the Initial Twelve Month Period, to the
sale, transfer or other public distribution of an aggregate
amount of Registrable Securities owned of record by each such
Stockholder which shall not exceed ten (10%) percent of the
aggregate number of shares of AUGI Merger Stock owned of
record by such Stockholder;
provided, that the foregoing lockup restrictions shall not be applicable to an
aggregate of up to 82,884 shares of AUGI Merger Stock issuable to Xxxxxx on the
Closing Date of the Arcadia Merger pursuant to the terms of the Arcadia Merger
Agreement; which shares of AUGI Merger Stock may be immediately sold by Xxxxxx
pursuant to such Demand Registration Statement or otherwise.
The lockup restrictions set forth in this Section 2(d) are a
material element of the consideration paid by AUGI pursuant to the Merger
Agreements. Accordingly, except for certificates evidencing 82,884 shares of
AUGI Merger Stock issuable to Xxxxxx on the Closing Date of the Arcadia Merger,
(i) AUGI shall have the right to provide its transfer agent with appropriate
"stop transfer" instructions, and (ii) all certificates issued to the
Stockholders evidencing the AUGI Merger Stock shall (in addition to any other
legends required pursuant to this Agreement or other Transaction Documents)
contain the following legend:
"THE SALE, TRANSFER, HYPOTHECATION OR ASSIGNMENT OF THE SHARES
EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS PURSUANT
TO THE TERMS OF A CERTAIN REGISTRATION RIGHTS AGREEMENT BETWEEN THE
CORPORATION AND THE RECORD HOLDER OF THIS CERTIFICATE; A COPY OF
WHICH AGREEMENT IS ON FILE AT THE OFFICES OF THE CORPORATION."
The lockup restrictions set forth in this Section 2(d) shall expire
and be of no further force or effect on a date which shall be twenty-four (24)
months from the effective date of the BTS Merger.
(e) Contemporaneous Piggyback Registrations. Notwithstanding
anything to the contrary in this Agreement, the Stockholders may not require any
Demand Registration within 120 days of any opportunity to participate in any
Piggyback Registration contemplated by Section 3 below.
(f) AUGI Option Stock. AUGI shall promptly register on a Form S-8
Registration Statement or other applicable registration statement all (i) AUGI
Options to the extent the same shall have vested and are exercisable in
accordance with their terms, and (ii) AUGI Option Stock issued or issuable to
the Stockholders upon exercise of AUGI stock options, and the Stockholders shall
have the right to include any shares of AUGI Option Stock issued upon exercise
of any stock option in a Registration Statement filed pursuant to Sections 2 or
3 hereof, for purposes of resale.
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3. Piggyback Registration Rights.
(a) In addition to and not in limitation of the rights specified in
Section 2 above, if, at any time on or after the date of this Agreement, AUGI
proposes to register any of its equity securities under the Securities Act of
1933, as amended (the "Securities Act"), on a registration statement on Form
S-1, Form X-0, Xxxx X-0, or an equivalent general registration form then in
effect (a "Registration Statement"), whether in whole or in part for purposes of
a sale by any stockholder of AUGI (other than the Stockholders) of such equity
securities for such person's (each such person, an "AUGI Registrant") own
account, on each such occasion AUGI shall give prompt written notice of its
intention to do so to the Stockholders.
(i) Upon the written request of the Stockholders, given within
fifteen (15) days following the receipt of any such written notice (which
request shall specify the Registrable Securities intended to be disposed of by
such Stockholder and the intended method of distribution thereof), AUGI will use
its best efforts to include in such registration statement any or all of the
Registrable Securities then owned by such Stockholder requesting such
registration to the extent necessary to permit the sale or other disposition of
the shares constituting Registrable Securities to be so registered, but only to
the extent of a number of shares of AUGI Common Stock such that the Stockholders
are able to sell shares of Registrable Securities but
(x) in the case of an underwritten public offering,
subject to such "underwriter cutbacks" described in Section
3(b) of this Agreement, as the applicable underwriter may
determine in good faith, and
(y) in the case of any other offering, on a proportional
basis with AUGI and/or such other AUGI Registrants intending
to sell shares pursuant to such registration statement
(each such effort to include Registrable Shares under such a Registration
Statement pursuant to this Section 3 is sometimes hereinafter referred to as a
"Piggyback Registration").
(ii) The Stockholders shall have the right to withdraw a
request to include Registrable Securities in any registration statement filed
pursuant to this Section 3(a) by giving written notice to AUGI of his election
to withdraw such request at least five (5) days prior to the proposed filing
date of such registration statement.
(b) If the managing underwriter for any offering of Registrable
Securities effected pursuant to Section 3(a) of this Agreement shall determine
in good faith and advise AUGI and/or the AUGI Registrants and the Stockholders
holding Registrable Securities in writing that the inclusion in any registration
effected pursuant to this Agreement of some or all of the Registrable Securities
sought to be registered creates a substantial risk that the proceeds or the
price per share that AUGI and/or such AUGI Registrants will derive from such
offering will be reduced or that the number of securities to be registered
(including those sought to be registered at the instance of AUGI and/or such
AUGI Registrants as well as those sought to be registered by the Stockholders
holding Registrable Securities) is too large a number to be reasonably sold,
AUGI will include in such registration to the extent which AUGI is so advised
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they can be sold in such offering (the "Maximum Number"), at the option of AUGI,
either (i) the number of securities sought to be registered by each seller
(which term shall include each AUGI Registrant, as well as the Stockholders
holding Registrable Securities) reduced pro rata among such sellers in
proportion to the number of securities sought to be registered by all such
sellers or, (ii) (A) first, securities to be registered at the instance of AUGI,
if any, and (B) second, if the number of securities to be registered under
clause (A) is less than the Maximum Number, securities to be registered by all
other sellers pro rata as aforesaid.
4. Restrictive Legend. Until a Registration Statement (whether a Piggyback
Registration, a Demand Registration, or otherwise) has become effective under
the Securities Act covering every share issued to the Stockholders pursuant to
the BTS Merger and/or Arcadia Merger (whether or not subsequently transferred)
and such shares are disposed of pursuant to such effective Registration
Statement, each certificate representing each such share of AUGI Common Stock
issued to the Stockholders pursuant to the Arcadia Merger and/or the BTS Merger
which has not been covered by and disposed of pursuant to such an effective
Registration Statement, and all certificates and instruments issued in transfer
thereof, shall be endorsed with the substantially the following restrictive
legend:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN TAKEN
FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO THE DISTRIBUTION
THEREOF, AND NEITHER SUCH SHARES NOR ANY INTEREST THEREIN MAY BE
SOLD, TRANSFERRED, ASSIGNED OR PLEDGED EXCEPT IF REGISTERED UNDER
APPLICABLE FEDERAL OR STATE BLUE SKY OR SECURITIES LAWS OR ANY
EXEMPTIONS FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS ARE
AVAILABLE, ALL IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN
THE REGISTERED HOLDER HEREOF AND THE ISSUER OF SUCH SHARES. A COPY
OF WHICH IS AVAILABLE FROM THE COMPANY UPON REQUEST."
Upon the effectiveness of any such Registration Statement and in connection with
the disposition of shares pursuant thereto, AUGI shall, upon the request of any
Stockholder, issue upon the direction of such Stockholder a replacement
certificate with regard to any shares covered by such Registration Statement and
being disposed of pursuant thereto, which certificate shall be without such
legend, in exchange for any such legended certificate.
5. Registration Statements and Prospectus'. AUGI shall furnish to the
Stockholders, at the Company's expense, such number of copies of the
Registration Statement and each amendment and supplement thereto, preliminary
prospectus, final prospectus and such other documents as such Stockholder may
reasonably request in order to facilitate the public offering of the Registrable
Securities pursuant to this Agreement.
6. Blue Sky Laws. AUGI shall promptly, at AUGI's expense, use its
reasonable efforts to register or qualify the Registrable Securities covered by
any Registration Statement filed pursuant to this Agreement under such state
securities or blue sky laws of such jurisdictions
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as such Stockholder participating in such registration may reasonably request,
except that AUGI shall not for any purpose be required to execute a general
consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction where it is not so qualified.
7. Miscellaneous.
(a) AUGI shall notify the Stockholders, promptly after it shall
receive notice thereof, of the date and time when the Registration Statement and
each post-effective amendment thereto has become effective or a supplement to
any prospectus forming a part of the Registration Statement has been filed.
(b) AUGI shall advise the Stockholders, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop order by
the SEC suspending the effectiveness of the Registration Statement or the
initiation or threatening of any proceeding for the 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. AUGI's obligations to cause said
Registration Statements to become effective, and to otherwise comply with the
terms and conditions of this Agreement, shall be limited to performance on a
"best efforts" basis. The Stockholders, in turn, shall be obligated to utilize
their best efforts to facilitate the completion and effectiveness of any
Registration Statement pursuant hereto including, without limitation, furnishing
customary information (for inclusion in any such Registration Statement and for
due diligence purposes in connection therewith), undertakings, and agreements
(including, without limitation, customary indemnifications of underwriters) in
connection therewith.
(c) AUGI agrees to bear (i) all SEC registration and filing fees,
(ii) printing and mailing expenses, fees and disbursements of counsel and
accountants for AUGI and the underwriters and all expenses and fees incident to
an application for listing the shares of AUGI Common Stock on The Nasdaq
National Market, (iii) NASD filing fees and expenses incurred by any person or
entity in connection therewith, and (iv) legal fees and disbursements and other
expenses of complying with state securities or blue sky laws of any
jurisdictions in which such Registrable Securities are to be registered or
qualified.
(d) The Stockholders agree to bear all discounts, commissions and
fees of any such underwriters, brokers and dealers incurred with respect to the
distribution of such Registrable Securities, and the fees and disbursements of
counsel, if any, which may be selected by the Stockholders.
(e) AUGI hereby agrees to indemnify and hold harmless the
Stockholders from and against, and agrees to reimburse such Stockholder with
respect to, any and all claims, actions (actual or threatened), demands, losses,
damages, liabilities, costs and expenses to which such Stockholder may become
subject under the Securities Act or otherwise, insofar as such claims, actions,
demands, losses, damages, liabilities, costs or expenses are caused by any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, any prospectus contained therein, or any amendment
or supplement thereto, or are caused by 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; provided, however, that AUGI shall not be
liable in any such case to the extent that any such claim, action, demand,
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loss, damage, liability, cost or expense is caused by an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished in writing by such Stockholder for use in the
preparation thereof; provided further, however, that this indemnity is subject
to the condition that insofar as it relates to any untrue statement, alleged
untrue statement, omission or alleged omission made in a preliminary prospectus
but eliminated or remedied in the final prospectus, such indemnity shall not
inure to the benefit of any Stockholder if a copy of the final prospectus was
not furnished to the person asserting the claim, action, demand, loss, damage or
liability.
(f) The Stockholders hereby agrees to indemnify and hold harmless
AUGI, its officers, directors, legal counsel and accountant and each person or
entity who controls AUGI within the meaning of the Securities Act, from and
against, and agrees to reimburse AUGI, its officers, directors, legal counsel,
accountants and controlling persons or entities with respect to, any and all
claims, actions, demands, losses, damages, liabilities, costs or expenses to
which AUGI, its officers, directors, legal counsel, accountants or such
controlling persons or entities, may become subject under the Securities Act or
otherwise, insofar as such claims, actions, demands, losses, damages,
liabilities, costs or expenses are caused by any untrue or alleged untrue
statement of any material fact contained in the Registration Statement, any
prospectus contained or any amendment or supplement thereto, or are caused by
the omission or the 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 in which they were made, not misleading, in each case to the
extent, but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
conformity with information furnished in writing by such Stockholder for use in
the preparation thereof.
(g) If any claim shall be asserted against any person or entity (an
"Indemnified Person") for which such person or entity intends to seek
indemnification pursuant to Section 7(e) or (f), as the case may be, such
Indemnified Person shall give prompt written notice to AUGI or the Stockholders,
as the case may be, of the nature of such claim, but the failure to give such
notice shall not relieve AUGI or the Stockholders, as the case may be, of their
obligations under this Section 7 unless it or they have been prejudiced
substantially thereby. AUGI or the Stockholders (whichever is not the
Indemnified Person in the particular instance) shall have the exclusive right to
conduct, at their expense, through counsel of its or their own choosing, which
counsel is approved by the Indemnified Person (which approval may not be
unreasonably withheld), the defense of any such claim, and may compromise or
settle such claims with the prior consent of AUGI or the Stockholders (which
consent shall not be unreasonably withheld).
(h) THIS AGREEMENT SHALL BE CONSTRUED (BOTH AS TO VALIDITY AND
PERFORMANCE) AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WHOLLY
WITHIN SUCH JURISDICTION.
(i) In the event of any dispute concerning the interpretation or
application of this Agreement, the same shall be resolved by final and binding
arbitration in accordance with the procedures set forth in the BTS Merger
Agreement; provided, that in the event of any actual or threatened violation by
AUGI or the Stockholders or their respective covenants and
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agreements contained herein, for which the other party or parties hereto shall
have no adequate remedy at law, the actual or alleged injured party or parties
shall have the right to apply to, and obtain from, any court of competent
jurisdiction such injunctive relief, specific performance or other equitable
remedy as such court may award in the circumstances.
IN WITNESS WHEREOF, this Agreement has been duly executed by or on
behalf of each party hereto on the date set forth above.
AMERICAN UNITED GLOBAL, INC.
By: [ILLEGIBLE]
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Name:
Title:
The STOCKHOLDERS
/s/ Simantov Moskona
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Simantov Moskona
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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