1
Exhibit 10.36
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered
into as of the 6th day of May, 1998, by and between AvTeam, Inc. (the "Company")
and the entity which is a signatory to this Agreement (the"Holder").
RECITALS
A. Pursuant to an agreement of even date herewith (the "Stock Purchase
Agreement"), the Holder is purchasing (the "Stock Purchase") from a shareholder
of the Company shares (the "Shares") of the Company's Common Stock, par value
$.01 per share ("Common Stock"), in a transaction exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
in such amounts as set forth in the Stock Purchase Agreement.
B. The Holder has requested, and the Company has agreed, as a condition
to the Holder's obligation to effect the Stock Purchase, to register under the
Securities Act the Shares to be purchased by the Holder, upon the terms, and
subject to the conditions, hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and other good, valuable and
sufficient consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
AGREEMENT
1. DEMAND REGISTRATION.
(a) The Company agrees that the Company will, with reasonable
promptness, and in any case not later than thirty (30) days from the date of the
closing of the Stock Purchase (the "Closing Date"), file a registration
statement (the "Registration Statement") with the Securities and Exchange
Commission ("Commission") relating to the Shares to be acquired by the Holder in
connection with the Stock Purchase. The Company shall use its best efforts to
cause such Registration Statement to promptly become effective under the
Securities Act and to qualify the same under the blue sky laws of such states as
may be requested; provided, however, that with respect to compliance with blue
sky laws, the Company shall not be obligated to qualify as a foreign corporation
or as a dealer in securities or to execute or file any general consent to
service of process under the laws of any such state where it is not so subject.
(b) The Company shall be obligated to effect registration and
qualification pursuant to a request of the Holder under this Section 1 no more
than one time subject to the terms and conditions hereof.
2. EXPENSES. Subject to the limitations contained in this Section 2 and
except as otherwise specifically provided in this Agreement, all of its costs
and expenses of the registration and qualifications pursuant to Section 1 hereof
shall be borne by the Company. Such costs and expenses shall include, without
limitation, the fees and expenses of counsel for the Company and of its
accountants, all other costs, fees and expenses of the Company incident to the
preparation, printing and filing under the Securities Act of the registration
statement and all amendments and supplements thereto, the cost of furnishing
copies of each preliminary prospectus, each final prospectus and each amendment
or supplement thereto to underwriters, dealers and other purchasers of the
Shares and the costs and expenses (including fees and disbursements of counsel)
incurred in connection with the qualification of the Shares under the blue sky
laws of various jurisdictions. The Company shall not, however, pay any
underwriting discount or commissions to the extent related to the sale of Shares
sold in any registration and qualification.
2
3. PROCEDURES.
(a) In the case of a registration or qualification pursuant to
Section 1, the Company will keep the Holder advised in writing as to the
initiation of proceedings for such registration and qualification and as to the
completion thereof, and will advise the Holder, upon request, of the progress of
such proceedings.
(b) At the Company's expense, the Company will keep the
registration and qualifications under this Agreement effective (and in
compliance with the Securities Act) by such action as may be necessary or
appropriate until such time, if any as the Shares shall have been sold;
provided, that the Company intends to amend the Registration Statement on Form
S-3 at such time as the Company becomes eligible to use such form; and provided,
further, that the Company shall not be required to keep the Registration
Statement effective for a period of more than two years from the Closing Date.
The Company's obligations under this Section 3(b) shall include, without
limitation, the filing of post-effective amendments and supplements to any
registration statement or prospectus necessary to keep the Registration
Statement current and the further qualification under any applicable blue sky or
other state securities laws to permit such sale or distribution, all as
requested by the Holder. The Company will immediately notify the Holder at any
time when a prospectus relating thereto is required to be delivered under the
Securities 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 any material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing.
(c) Without limiting any other provision hereof, in connection
with any registration of Shares under this Agreement, the Company will use its
best efforts to comply with the Securities Act, the Securities Exchange Act of
1934, as amended (the "Securities Exchange Act"), and all applicable rules and
regulations of the Commission.
(d) In connection with any registration of Shares under this
Agreement, the Company will provide, if appropriate, a transfer agent and
registrar for the Shares not later than the effective date of such Registration
Statement.
(e) In connection with any registration of Shares under this
Agreement, the Company will, if requested by the underwriters for any Shares
included in such registration, enter into an underwriting agreement with such
underwriters for such offering, such agreement to contain such representations
and warranties by the Company and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, provisions relating to
indemnification and contribution.
4. INDEMNIFICATION. The Company will indemnify and hold
harmless the Holder and each person, if any, who controls the Holder within the
meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several, and expenses (including reasonable attorneys'
fees and expenses and reasonable costs of investigation) to which the Holder or
such controlling person may be subject, under the Securities Act or otherwise,
insofar as any thereof arise out of or are based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in (A) the Registration
Statement under which the Holder's Shares were registered under the Securities
Act pursuant to Section 1 hereof, any prospectus or preliminary prospectus
contained therein, or any amendment or supplement thereto or (B) any other
document incident to the registration of the Shares under the Securities Act or
the qualification of the Shares under any state securities laws applicable to
the Company, (ii) the omission or alleged omission to state in any item referred
to in the preceding clause (i) 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 Securities Act, the Securities
Exchange Act or any other federal or state securities law, rule or regulation
applicable to the Company and relating to action or inaction by the Company in
connection with any such registration or qualification, except insofar as such
losses, claims, damages, liabilities or expenses
2
3
arise out of or are based upon any untrue statement or alleged untrue statement
or omission or alleged omission based upon information furnished to the Company
in writing by the Holder for the Holder expressly for use therein (with respect
to which information the Holder shall so indemnify and hold harmless the
Company, any underwriter for the Company and each person, if any, who controls
the Company or such underwriter within the meaning of the Securities Act).
5. NOTICES. All notices required or permitted to be given pursuant to
this Agreement shall be given in writing, shall be transmitted by personal
delivery, by registered or certified mail, return receipt requested, postage
prepaid, or by telecopier or other electronic means (with a confirming copy by
registered or certified mail, postage prepaid) and shall be addressed as
follows:
When the Holder is the intended recipient, to each Holder at
its address set forth in the Purchase Agreement.
When the Company is the intended recipient:
AvTeam, Inc.
0000 Xxxxxxxxx Xxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxx
WITH A COPY TO:
Xxxxx & XxXxxxxx
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
ATTENTION: Xxxxxx Xxxxx, Esq.
Telecopy: (000) 000-0000
Any party to this Agreement (each a "Party") may designate a new address to
which notices required or permitted to be given pursuant to this Agreement shall
thereafter be transmitted by giving written notice to that effect to the other
Parties. Each notice transmitted in the manner described in this Section 5 shall
be deemed to have been given, received and become effective for all purposes at
the time it shall have been (i) delivered to the addressee as indicated by the
return receipt (if transmitted by mail), the affidavit of the messenger (if
transmitted by personal delivery) or the answer back or call back (if
transmitted by telecopier or other electronic means, but only if a confirmation
copy of such telecopied or electronically delivered notice is also delivered by
registered or certified mail, postage prepaid) or (ii) presented for delivery to
the addressee as so indicated during normal business hours, if such delivery
shall have been refused for any reason.
6. GOVERNING LAW; FORUM.
(a) The validity, interpretation, performance and enforcement
of this Agreement shall be governed by the laws the State of Florida (without
giving effect to the laws, rules or principles of the State of Florida regarding
conflicts of laws).
(b) Each party agrees that any proceeding arising out of or
relating to this Agreement or the breach or threatened breach of this Agreement
shall be commenced and prosecuted in a court in Miami, Florida. Each party
consents and submits to the non-exclusive personal jurisdiction of any court in
Miami, Florida in respect of any such proceeding. Each party consents to service
of process upon it with respect to any such proceeding by registered mail,
return receipt requested, and by any other means permitted by
3
4
applicable laws and rules. Each party waives any objection that it may now or
hereafter have to the laying of venue of any such proceeding in any court in
Miami, Florida and any claim that it may now or hereafter have that any such
proceeding in any court in Miami, Florida has been brought in an inconvenient
forum.
(c) Final judgment against any party hereto in any suit or
proceeding shall be conclusive, and may be enforced in any other jurisdiction
(i) by suit, action or proceeding on the judgment, a certified or true copy of
which shall be conclusive evidence of the fact and the amount of indebtedness or
liability of the party hereto, or (ii) in any other manner provided by or
pursuant to the laws of such other jurisdiction.
(d) Nothing herein shall in any way be deemed to limit the
ability or right of any party to serve any legal process, summons, notices or
other documents in any other manner permitted by applicable law, or to obtain
jurisdiction over any other party, or to bring actions, suits or proceedings
against any other party in such other jurisdictions, and in such manner, as may
be otherwise permitted by applicable law.
7. BINDING EFFECT; ASSIGNMENT; THIRD PARTY BENEFICIARIES. This
Agreement shall be binding upon the parties and their respective successors and
assigns and shall inure to the benefit of the parties and their respective
successors and permitted assigns. No party shall assign any of its rights or
delegate any of its duties under this Agreement (by operation of law or
otherwise) without the prior written consent of the other parties. Any
assignment of rights or delegation of duties under this Agreement by a party
without the prior written consent of the other parties, if such consent is
required hereby, shall be void. No person (including, without limitation, any
employee of a party) shall be, or be deemed to be, a third party beneficiary of
this Agreement.
8. ENTIRE AGREEMENT; EFFECTIVE DATE OF AGREEMENT. This Agreement
constitutes the entire contract between the parties with respect to the subject
matter hereof and cancels and supersedes all of the previous contracts,
commitments, representations, warranties and understandings (whether oral or
written) by, between or among the parties with respect to the subject matter
hereof.
9. AMENDMENTS. No addition to, and no cancellation, renewal, extension,
modification or amendment of, this Agreement shall be binding upon a party
unless such addition, cancellation, renewal, extension, modification or
amendment is set forth in a written instrument which states that it adds to,
amends, cancels, renews, extends or modifies this Agreement and has been
approved by all of the parties hereto.
10. WAIVERS. No waiver of any provision of this Agreement shall be
binding upon a party unless such waiver is expressly set forth in a written
instrument which is executed and delivered by such party or on behalf of such
party by an officer of, or attorney-in-fact for, such party. Such waiver shall
be effective only to the extent specifically set forth in such written
instrument. Neither the exercise (from time to time and at any time) by a party
of, nor the delay or failure (at any time or for any period of time) to
exercise, any right, power or remedy shall constitute a waiver of the right to
exercise, or impair, limit or restrict the exercise of, such right, power or
remedy or any other right, power or remedy at any time and from time to time
thereafter. No waiver of any right, power or remedy of a party shall be deemed
to be a waiver of any other right, power or remedy of such party or shall,
except to the extent so waived, impair, limit or restrict the exercise of such
right, power or remedy.
11. REMEDIES.
(a) The rights, powers and remedies of the parties set forth
herein for a breach of or default under this Agreement are cumulative and in
addition to, and not in lieu of, any rights or remedies that any party may
otherwise have under this Agreement, at law or in equity.
(b) The parties acknowledge that the Shares are unique, and
that any violation of this Agreement cannot be compensated for by damages alone.
Accordingly, in addition to all of the other remedies which may be available
hereunder or under applicable law, any party shall have the right to any
4
5
equitable relief which may be appropriate to remedy a breach or threatened
breach by any other party hereunder, including, without limitation, the right to
enforce specifically the terms of this Agreement by obtaining injunctive relief
in respect of any violation or non-performance hereof, and any party shall have
the right to seek recovery of and be awarded attorneys' fees and expenses in any
proceeding with respect to this Agreement as reasonably determined by the court
in which such proceeding is brought.
12. HEADINGS; COUNTERPARTS. The headings set forth in this Agreement
have been inserted for convenience of reference only, shall not be considered a
part of this Agreement and shall not limit, modify or affect in any way the
meaning or interpretation of this Agreement. This Agreement may be signed in any
number of counterparts, each of which (when executed and delivered) shall
constitute an original instrument, but all of which together shall constitute
one and the same instrument. It shall not be necessary when making proof of this
Agreement to account for any counterparts other than a sufficient number of
counterparts which, when taken together, contain signatures of all of the
parties.
13. SEVERABILITY. If any provision of this Agreement shall hereafter be
held to be invalid, unenforceable or illegal, in whole or in part, in any
jurisdiction under any circumstances for any reason, (i) such provision shall be
reformed to the minimum extent necessary to cause such provision to be valid,
enforceable and legal while preserving the intent of the parties as expressed
in, and the benefits to the parties provided by, this Agreement or (ii) if such
provision cannot be so reformed, such provision shall be severed from this
Agreement and an equitable adjustment shall be made to this Agreement
(including, without limitation, addition of necessary further provisions to this
Agreement) so as to give effect to the intent as so expressed and the benefits
so provided. Such holding shall not affect or impair the validity,
enforceability or legality of such provision in any other jurisdiction or under
any other circumstances. Neither such holding nor such reformation or severance
shall affect or impair the legality, validity or enforceability of any other
provision of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the date first above written.
AVTEAM, INC.
By: /s/ Xxxxxx X. Xxxx
---------------------------------
Name: Xxxxxx X. Xxxx
Title: Chairman, President and CEO
HOLDER:
BARON SMALL CAP FUND
By: /s/ Xxxxx Xxxxx
----------------------------------
Name: Xxxxx Xxxxx
Title: Chief Operating Officer
5
