Exhibit 10(z)(1)
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is entered into as of March
30, 2001 by and among NCT Group, Inc., a Delaware corporation having its
principal place of business at 00 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000,
XXX (the "Company"), and NXT plc, a public company registered in England and
Wales under company number 514718 (the "Holder").
RECITALS
The execution and delivery of this Agreement is a condition to the Holder's
obligation under the Framework Agreement to be entered into as of the date
hereof between the Company, the Holder, New Transducers Limited and NCT Audio
Products, Inc. (the "Framework Agreement").
Accordingly, in consideration of the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
AGREEMENT
1. Certain Definitions. As used in this Agreement, the following terms shall
have the following meanings:
"Approved Underwriter" shall have the meaning set forth in Section 2.
"Blackout Period" shall have the meaning set forth in Section 4.
"Common Stock" shall mean the common stock, par value $0.01, of the
Company.
"Completion Date" shall mean the Completion Date as defined in the I
Framework Agreement.
"Damages" shall have the meaning set forth in Section 8.
"Demand Registration" shall have the meaning set forth in Section 2.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Prospectus" shall mean the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement, with respect
to the terms of the offering of any portion of the Registrable Securities
covered by the Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such Prospectus.
"Registration" shall have the meaning set forth in Section 2.
"register," "registered" and "registration" shall mean and refer to a
registration effected by preparing and filing a Registration Statement and
taking all other actions that are necessary or appropriate in connection
therewith, and the declaration or ordering of effectiveness of such Registration
Statement by the SEC.
"Registrable Securities" shall mean all or any portion of the Common Stock
issued to the Holder under the Framework Agreement or subsequently transferred
to a permitted transferred under Section 14 hereof.
"Registration Expenses" shall have the meaning set forth in Section 7.
"Registration Statement" shall mean any registration statement of the
Company in compliance with the Securities Act that cover the Registrable
Securities pursuant to the provisions of this Agreement, including, without
limitation, the Prospectus, all amendments and supplements to such Registration
Statement, including all post-effective amendments, all exhibits and all
material incorporated by reference in such Registration Statement.
"Required Registration" shall have the meaning set out in Section 2.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Underwritten registration" or "underwritten offering" shall mean a
registration in which securities of the Company are sold to an underwriter or
through an underwriter as agent for reoffering to the public.
2. Required Registration
(a) Initial Registration Obligation. As soon as reasonably practicable
following the Completion Date, the Company shall file a Registration
Statement with the SEC, and use all reasonable commercial efforts to
cause such Registration Statement to be declared effective under the
Securities Act, covering the sale of the Registrable Securities held
by the Holder (the "Required Registration"). It is the intent of the
parties that the Registration Statement be declared effective not
later than July 31, 2001. If the Required Registration has not become
effective on or before July 31, 2001, the Company shall continue to
use its reasonable commercial efforts to ensure that the Required
Registration becomes effective, but may thereafter cease using its
reasonable commercial efforts to have the Required Registration
declared effective if it becomes reasonably apparent that the
prevailing circumstances make it highly unlikely that the Required
Registration will become effective within the next 6 months.
(b) Demand Registration. In the event that, pursuant to Section 2(a)
above, the Company ceases to pursue the Required Registration, the
Holder shall, beginning 90 days following the date on which such
pursuit is ceased, have the right to request in writing that the
Company register all Registrable Securities then held by the Holder (a
"Demand Registration").
(c) Effective Registration. A registration shall not constitute the
Required Registration or a Demand Registration (a "Registration")
until the applicable Registration Statement has become effective and
remains continuously effective for the lesser of; (i) the period
during which all Registrable Securities registered thereunder are
sold; and (ii) one year (not including those days covered by any
Blackout Period); provided, however, that a registration shall not
constitute a Registration if: (x) after such registration has become
effective, such registration or the related offer, sale or
distribution of Registrable Securities thereunder is interfered with
by any stop order, injunction or other order or requirement of the SEC
or other governmental agency or court for any reason not attributable
to the Holder and such interference is not thereafter eliminated; or
(y) the conditions to closing specified in the underwriting agreement,
if any, entered into in connection with a Demand Registration are not
satisfied or waived, other than by reason of a failure by the Holder.
(d) Underwriting Procedures. If the Holder so elects, the offering of
Registrable Securities pursuant to a Demand Registration shall be in
the form of a firm commitment underwritten offering and the managing
underwriter(s) selected for such offering shall be the Approved
Underwriter selected in accordance v, with Section 2(f). With respect
to any firm commitment underwritten offering, the Company shall enter
into a reasonable and customary underwriting agreement with the
Approved Underwriter. If the Approved Underwriter advises the Company
or the Holder in writing that, in its opinion, the aggregate amount of
stock requested to be included in such offering is sufficiently large
so as to have a material adverse effect on the success of such
offering, then the Company shall include in such registration only the
aggregate amount of stock that in the opinion of the Approved
Underwriter may be sold without any such material adverse effect and
shall allocate the amount of the stock to be included in such
registration as follows; (i) first, the Holder shall be allowed to
include all of the Registrable Securities it then holds and (ii)
second, the Company and any other stockholder exercising piggyback
registration rights shall be allowed to include such amount of Common
Stock as the Approved Underwriter deems appropriate subject to any
priorities agreed to by the Company and such other stockholders. If,
as a result of the cutback provisions above, the Holder is not
permitted to sell all of the Registrable Securities it then holds, the
Holder may terminate the registration and such registration shall not
constitute a Registration.
(e) Selection of Underwriters. If the election to make the registration a
firm commitment underwritten offering under Section 2(e), regarding
Demand Registrations is made, the Holder shall select and obtain one
or more investment banking firms of national reputation to act as the
managing underwriters of the offering (collectively, the "Approved
Underwriter"); provided, however, that the Company shall have the
right to consent to the Approved Underwriter, which consent shall not
be unreasonably withheld.
(f) Holder's Right of Withdrawal. The Holder shall have the right to
withdraw, its Registrable Securities from the Registration Statement
in connection with a Demand Registration at any time prior to the
effective date thereof.
3. Incidental Registration. If the Company shall determine to register any
Common Stock, or any securities convertible into or exchangeable or
exercisable for Common Stock, for its own account or for the account of any
stockholder (other than a registration on Forms S-4 or S-8, or any
replacement or successor form thereof), the Holder shall be entitled to
include Registrable Securities then held by it in such registration (and
related underwritten offering, if any) (each, an "Incidental Registration")
on the following terms and conditions:
(a) The Company shall give written notice to the Holder of the pending
registration at least twenty (20) days prior to the filing of the
Registration Statement and offer it an opportunity to participate. The
Holder shall have the right to request, by written notice given to the
Company within ten (10) days of its receipt of notice of the pending
Incidental Registration, that all but not less than all of the
Registrable Securities then held by the I-folder be included in such
Registration Statement;
(b) If the proposed registration relates to an underwritten offering, the
notice of the Company provided under Section 3(a) shall specify the
name of the managing underwriter or underwriters for such offering and
the number of securities to be registered for the account of the
Company and for the account of any other stockholder of the Company;
(c) If the proposed registration relates to an underwritten offering, the
Holder must: (i) sell its Registrable Securities on the basis provided
in the underwriting arrangements approved by the Company; and (ii)
complete and execute all questionnaires, powers of attorney,
indemnities (but only to the extent such indemnities relate
specifically to information supplied by Holder), hold-back agreements,
underwriting agreements and other documents on the same basis as other
similarly situated selling stockholders (or, if there are no other
selling stockholders, as would be customary in a transaction of this
type) required under the terms of such underwriting arrangements or by
the SEC;
(d) If the managing underwriter for the underwritten offering under the
proposed registration to be made by the Company advises the Company or
the Holder in writing that, in its opinion, the aggregate amount of
stock requested to be included in such offering is sufficiently large
so as to have a material adverse effect on the success of such
offering, then the Company shall include in such registration only the
aggregate amount of stock that in the opinion of the managing
underwriter may be sold without any such material adverse effect and
shall allocate the amount of the stock to be included in such
registration as follows: (i) first, the Company (if such registration
was initiated thereby) or the selling stockholders exercising demand
registration rights, as the case may be, shall be permitted to include
all of the stock to be registered thereby; (ii) second, the Holder
shall be permitted to include all of the Registrable Securities then
held by it; and (iii) third, any other selling stockholder and, in the
case that the Company did not initiate the registration, the Company
shall be allowed to include such amount of stock as the managing
underwriter deems appropriate, subject to any priorities agreed to by
the Company and such other stockholders. If as a result of the cutback
provisions above, the Holder is not permitted to sell all of the
Registrable Securities it then holds, the Holder shall be entitled to
continue to use its rights under Section 2 and Section 3 to register
the remainder of such Registrable Securities; and
(e) The Holder shall have the right to withdraw its Registrable Securities
from the Registration Statement at any time prior to the effective
date thereof, but if the same relates to an underwritten offering, it
may do so after the initial filing thereof only during the time period
and on terms deemed appropriate by the managing underwriters for such
underwritten offering.
4. Blackout Periods.
(a) Following July 31, 2001, upon written notice from the Company to the
Holder that the Company determines in the good faith judgment of the
Board of Directors of the Company, with the advice of counsel, that
the filing of any Registration Statement or the sale of Registrable
Securities pursuant to the Registration Statement would require
disclosure of material non-public information, the disclosure of which
would have a material adverse effect on the Company, the Company may,
(v) if the Registration Statement has not yet been filed, delay such
filing, (y) if the Registration Statement has been filed but has not
yet become effective, cease taking steps to cause the Registration
Statement to become effective, and (z) if the Registration Statement
has already become effective, suspend the sale of Registrable
Securities pursuant to such Registration Statement until the earliest
of;
(i) the date upon which such material information is disclosed to the
public or ceases to be material; and
(ii) such time as the Company notifies the Holder that the Company
will no longer delay such filing of the Registration Statement,
recommence taking steps to make such Registration Statement
effective or allow sales pursuant to such Registration Statement
to resume.
(The period during which the Company delays the filing of the Registration
Statement, ceases taking steps to cause the Registration Statement to become
effective or suspends sales of Registrable Securities is hereinafter called a
"Blackout Period".)
(b) Any delivery by the Company of notice of a Blackout Period prior to
the effectiveness of any Demand Registration effected pursuant to
Section 2 hereof shall give the Holder the right, by written notice to
the Company within twenty (20) Business Days after the commencement of
such Blackout Period, to cancel such registration and such
registration, if initiated pursuant to Section 2, shall not count as a
Registration.
(c) Notwithstanding contrary provisions in this Section 4, the Company
shall limit its use of Blackout Periods, in their aggregate, to ninety
(90) days in any twelve (12) month period.
5. Restrictions on Public Sale by Holder of its Registrable Securities. If the
Holder's Registrable Securities are included (in whole or in part) in a
Registration Statement filed by the Company under Sections 2 and Section 3
for sale in an underwritten offering, the Holder agrees, if requested by
the managing underwriter(s) of such offering, not to sell, make any short
sale of, loan, grant any option for the purchase of, dispose of or effect
any public sale or distribution of securities of the same class as (or
securities exchangeable for or convertible into securities of the same
class as) the Holder's Registrable Securities, including a sale pursuant to
Rule 144 under the Securities Act (except as part of such underwritten
registration), during the five (5) day period prior to, and during the
ninety (90) day period (one hundred eighty (180) day period in cases of an
initial public offering or a much shorter period if requested by the
managing underwriter(s) with respect to any other stockholders of the
Company selling shares in the offering) beginning on the closing date of
such underwritten offering, to the extent that the Holder is timely
notified in writing by the Company or the managing underwriter(s).
6. Registration Procedures. In connection with the Company's registration
obligations pursuant to Sections 2 and Section 3 hereof, the Company will
use all commercially reasonable efforts to effect such registration to
permit the sale of the Registrable Securities covered thereby in accordance
with the intended method or methods of disposition thereof, and pursuant
thereto the Company will as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement with respect to
such Registrable Securities and use all commercially reasonable
efforts to cause such Registration Statement to become effective,
provided that, before filing any Registration Statement or Prospectus
or any amendments or supplements thereto, the Company will furnish to
the Holder and its counsel, copies of all such documents proposed to
be filed with the SEC (a "Filing "), at least five (5) days prior
thereto, and the Company will not file any such Filing to which the
Holder reasonably objects within such five (5) day period, provided,
further that the Company will not name or otherwise provide any
information with respect to the Holder in any Registration Statement
or Prospectus without the express written consent of the Holder,
unless required to do so by the Securities Act and the rules and
regulations thereunder, provided however, that the rights of the
Holder to comment on and require amendments to a Filing shall be
limited to (i) comments or amendments with respect to the portions of
such Filing which reference the Holder, the Agreement, the Framework
Agreement, or any other written agreement between the Holder and the
Company, or (ii) circumstances where in the reasonable belief of the
Holder, the Filing without such amendment would include an untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which such prospectus
is or is to be used, not misleading;
(b) prepare and file with the SEC such amendments, post-effective
amendments and supplements to the Registration Statement and the
Prospectus as may be necessary to comply with the provisions of the
Securities Act and the rules and regulations thereunder with respect
to the disposition of all Registrable Securities covered by such
Registration Statement until the earlier of such time as all of such
Registrable Securities have been disposed of in accordance with the
intended methods of disposition by the Holder set forth in such
registration statement or the expiration of one year (not including
those days covered by any Blackout Period) after such registration
statement becomes effective;
(c) promptly notify the Holder: (i) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with
respect to the Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the SEC for
amendments or supplements to the Registration Statement or the
Prospectus or for additional information; (iii) of the issuance by the
secretary of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that
purpose; (iv) if at any time the representations and warranties of the
Company contemplated by the Framework Agreement cease to be true and
correct when made; (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification of
the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and (vi)
of the happening of any event which makes any statement made in the
Registration Statement, the Prospectus or any document incorporated
therein by reference untrue or which requires the making of any
changes in the Registration Statement, the Prospectus or any document
incorporated therein by reference, so that such documents will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading; at which point, the Holder agrees that,
upon receipt of any notice from the Company of the happening of such
event, the Holder will forthwith discontinue disposition of
Registrable Securities under the Prospectus related to the applicable
Registration Statement until the Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 6(i) below,
or until it is advised in writing by the Company that the use of the
Prospectus may be resumed;
(d) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement as soon as
practicably possible;
(e) furnish to the Holder, without charge, at least one signed copy of the
Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, all documents filed
therewith, incorporated therein by reference and all exhibits thereto
(including those incorporated by reference);
(f) deliver to the Holder, without charge, such reasonable number of
conformed copies of the Registration Statement (and any post-effective
amendment thereto) and such number of copies of the Prospectus
(including each preliminary prospectus) and any amendment or
supplement thereto (and any documents incorporated by reference
therein) as the Holder may reasonably request, all in full conformity
with the Securities Act; the Company consents to the use of the
Prospectus or any amendment or supplement thereto by the Holder in
connection with the offer and sale of the Registrable Securities
covered by the Prospectus or any amendment or supplement thereto;
(g) register or qualify or cooperate with the Holder in connection with
the registration or qualification of such Registrable Securities for
offer and sale under the securities or "blue sky" laws of such
jurisdictions as the Holder reasonably requests; use its best efforts
to keep each such registration or qualification effective during the
period such Registration Statement is required to be kept effective
pursuant to the terms of this Agreement; and take any steps necessary
or advisable to enable the disposition of such Registrable Securities
in all such jurisdictions reasonably requested by the Holder, provided
that under no circumstances shall the Company be required in
connection therewith or as a condition thereof to qualify to do
business or to tile a general consent to service of process in any
such jurisdictions;
(h) cooperate with the Holder and the managing underwriter(s), if any, to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold, free of any and all
restrictive legends, such certificates to be in such denominations and
registered in such names as the managing underwriter(s), if any, or
the Holder may request;
(i) upon the occurrence of any event contemplated by Section 6(c)(vi)
above, prepare a supplement or post-effective amendment to the
Registration Statement or the Prospectus or any document incorporated
therein by reference or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Securities,
the Prospectus will not contain an untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein not misleading;
(j) make e generally available to the Holder the Company's outstanding
securities earnings statements, sufficient to satisfy the provisions
of Section 11(a) of the Securities Act, no later than sixty (60) days
after the end of any twelve (12) month period (or ninety (90) days, if
such period is a fiscal year) beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of
the Registration Statement, which statements shall cover said twelve
(12) month period;
(k) provide and cause to be maintained a transfer agent and registrar for
all Registrable Securities covered by each Registration Statement from
and after a date not later than the effective date of such
Registration Statement;
(l) use all commercially reasonable efforts to cause all Registrable
Securities covered by each Registration Statement to be listed,
subject to notice of issuance, prior to the date of the first sale of
such Registrable Securities pursuant to such Registration Statement,
on each securities exchange on which the Common Stock issued by the
Company is then listed, and admitted to trading, including the Nasdaq
Stock Market, if the Common Stock is then admitted to trading on the
Nasdaq Stock Market;
(m) enter into such agreements (including underwriting agreements in
customary form containing, among other things, reasonable and
customary indemnities) and take such other actions as the Holder shall
reasonably request in order to expedite or facilitate the disposition
of such Registrable Securities; and
(n) furnish, at the request of the Holder, on the date that the
Registrable Securities are delivered to an underwriter for sale in
connection with an underwritten registration, or, in connection with
any other registration, on the date that the registration statement
with respect to such registration becomes effective: (i) an opinion,
dated such date, of the counsel representing the Company for the
purpose 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 the Holder; 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 underwriter(s), if any, and to the Holder,
subject to the Holder providing information reasonably requested by
such independent certified public accountants to comply with the rules
governing delivery of such letters.
It shall be a condition precedent to the obligations of the Company to take any
action pursuant to this Section 6 with respect to the Registrable Securities of
the Holder that the Holder shall furnish them to the Company such information
regarding itself and the Registrable Securities held by it as shall be required
by the Securities Act to effect the registration of the Holder's Registrable
Securities.
7. Registration Expenses. All expenses incident to any registration to be
effected hereunder (whether or not the Registration Statement is filed or
declared effective) and incident to the Company's performance of or
compliance with this Agreement, including without limitation all
registration and filing fees, fees and expenses of compliance with
securities or "blue sky" laws, printing expenses, messenger and delivery
expenses, National Association of Securities Dealers, Inc., stock exchange
and qualification fees, fees and disbursements of the Company's counsel and
of independent certified public accountants of the Company (including the
expenses of any special audit required by or incident to such performance),
(all such expenses being herein called "Registration Expenses") will be
borne by the Company. The Company will also pay its internal expenses, the
expenses of any annual audit and the fees and expenses of any person
retained by the Company. Except in the case of an Incidental Registration,
the Holder will bear all expenses of underwriters and selling brokers
relating to the Registrable Securities (including discounts, commissions or
fees of such underwriters or brokers), dealer managers or similar
securities industry professionals relating to the distribution of the
Registrable Securities. In the case of an Incidental Registration, the
Holder shall only be liable for any discounts, commissions or fees of any
underwriters or brokers relating to the Registrable Securities. The Holder
will also bear the Holder's own internal expenses.
8. Indemnification
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless the Holder, its officers, directors, partners and
employees and any person who controls the Holder (within the meaning
of Section 15 of the Securities Act) from and against any and all
losses, claims, damages and liabilities (including any investigation,
legal or other expenses reasonably incurred in connection with, and
any amount paid in settlement of, any action, suit or proceeding or
any claim asserted) (collectively, "Damages") to which the Holder may
become subject under the Securities Act, the Exchange Act or other
federal or state securities law or regulation, at common law or
otherwise, insofar as such Damages arise out of or are based upon (i)
any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, Prospectus or preliminary
prospectus or any amendment or supplement thereto, (ii) the omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading and
(iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or any state securities or "blue sky"
laws in connection with the Registration Statement, Prospectus or
preliminary prospectus or any amendment or supplement thereto;
provided that the Company will not be liable to the Holder to the
extent that such Damages arise from or are based upon any untrue
statement or omission (x) based upon written information furnished to
the Company by the Holder expressly for the inclusion in such
Registration Statement, (y) made in any preliminary prospectus if the
Holder failed to deliver a copy of the Prospectus with or prior to the
delivery of written confirmation of the sale by the Holder to the
claim underlying such Damages and such Prospectus would have corrected
such untrue statement or omission and (z) made in any Prospectus if
such untrue statement or omission was corrected in an amendment or
supplement to such Prospectus and the Holder failed to deliver such
amendment or supplement prior to or concurrently with the sale of
Registrable Securities to the party asserting the claim underlying
such Damages.
(b) Indemnification by the Holder. The Holder, as to its own statements or
omissions only, agrees to indemnify and hold harmless the Company, its
directors and each officer who signed such Registration Statement and
each person who controls the Company (within the meaning of Section 15
of the Securities Act) under the same circumstances as the foregoing
indemnity from the Company to the Holder to the extent that such
losses, claims, damages, liabilities or actions arise out of or are
based upon any untrue statement of a material fact or omission of a
material fact that was made in the Prospectus, the Registration
Statement, or any amendment or supplement thereto, in reliance upon
and in conformity with information relating to the Holder furnished in
writing to the Company by such party expressly for use therein,
provided that in no event shall the aggregate liability of the Holder
exceed the amount of the net proceeds received by such party upon the
sale of the Registrable Securities giving rise to such indemnification
obligation. The Company and the Holder shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the
distribution, to the same extent as customarily furnished by such
persons in similar circumstances.
(c) Procedure for Indemnification Proceedings. Any person entitled to
indemnification hereunder will (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks
indemnification and (ii) permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory 1o the
indemnified party; provided, however, that any person entitled to
indemnification hereunder shall have the right to employ separate
counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such person
and not of the indemnifying party unless: (A) the indemnifying party
has agreed to pay such fees or expenses; (8) the indemnifying party
shall have failed to assume the defense of such claim and employs
counsel reasonably satisfactory to such person; or (C) in the
reasonable judgment of such person and the indemnifying party, based
upon advice of their respective counsel, a conflict of interest may
exist between such person and the indemnifying party with respect to
such claims (in which case, if the person notifies the indemnifying
party in writing that such person elects to employ separate counsel at
the expense of the indemnifying party, the indemnifying party shall
not have the right to assume the defense of such claim on behalf of
such person). If such defense is not assumed by the indemnifying
party, the indemnifying party will not be subject to any liability for
any settlement made v without its consent, so long as such consent is
not unreasonably withheld. No indemnified party will be required to
consent to the entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by
all claimants or plaintiffs to such indemnified party of a release
from all liability in respect to such claim or litigation. Any
indemnifying party who is not entitled to, or elects not to, assume
the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim. As used in this Section
8(c), the terms "indemnifying party," "indemnified party" and other
terms of similar import are intended to include only the Company (and
its officers, directors and control persons as set forth above) on the
one hand, and the Holder (and its respective officers, directors,
partners, employees, attorneys and control persons as set forth above)
on the other hand, as applicable.
(d) Contribution. If for any reason the foregoing indemnities are
unavailable, then the indemnifying party shall contribute to the
amount paid or payable by the indemnified party as a result of such
losses, claims, damages, liabilities or expenses: (i) in such
proportion as is appropriate to reflect the relative benefits received
by the indemnifying party on the one hand and the indemnified party on
the other; or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law or provides a lesser sum to the
indemnified party than the amount hereinafter calculated, in such
proportion as is appropriate to reflect not only the relative benefits
received by the indemnifying party on the one hand and the indemnified
party on the other but also the relative fault of the indemnifying
party and the indemnified party as well as any other relevant
equitable considerations. Notwithstanding the foregoing, the Holder
shall not be required to contribute any amount in excess of the amount
the Holder would have been required to pay to an indemnified party if
the indemnity under Section 8(b) hereof was available. No person found
liable for making a fraudulent misrepresentation (within the meaning
of Section 11 of the Securities Act) shall be entitled to contribution
from any person who was found liable for making such fraudulent
misrepresentation.
(e) Timing of Payments. An indemnifying party shall make payments of all
amounts required to be made pursuant to the foregoing provisions of
this Section 8 to or for the account of the indemnified party from
time to time promptly upon receipt of bills or invoices relating
thereto or when otherwise due or payable.
(f) Survival. These indemnity and contribution provisions shall remain in
full force and effect, regardless of any investigation made by or on
behalf of the Holder, its officers, directors, partners, attorneys,
agents or any person, if any, who controls the Holder as aforesaid,
and shall survive the transfer of such Registrable Securities by the
Holder.
9. Preparation and Reasonable Investigation. In connection with the
preparation and filing of a Registration Statement pursuant to the terms of
this Agreement:
(a) the Company shall, with respect to a Registration Statement filed by
the Company, give the Holder and its counsel and accountants the
opportunity to participate in the preparation of such Registration
Statement (other than reports and proxy statements incorporated
therein by reference and lawfully and properly filed with the SEC) and
each Prospectus included therein or filed with the SEC, and each
amendment thereof or supplement thereto; and
(b) the Company shall give the Holder and its counsel and accountants
reasonable access to its books and records and opportunities to
discuss the business of the Company with its officers and the
independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of the Holder, to
conduct a reasonable investigation within the meaning of Section
11(b)(3) of the Securities Act. 10. Rule 144. At all times during
which the Company is subject to the periodic reporting requirements of
the Exchange Act, the Company covenants that it will file, on a timely
basis, the reports required to be filed by it under the Securities Act
and the Exchange Act and the rules and regulations adopted by the SEC
thereunder, and it will take such further action as the Holder may
reasonably request (including, without limitation, compliance with the
current public information requirements of Rule 144(c) and Rule 144A
under the Securities Act), all to the extent required from time to
time to enable the Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the
conditions provided by: (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time; (b) Rule 144A under the
Securities Act, as such Rule may be amended from time to time; or (c)
any similar rule or regulation hereafter adopted by the SEC. Upon the
request of the Holder, the Company will deliver to the Holder a
written statement verifying that it has complied with such information
requirements.
11. No Inconsistent Agreements. The Company will not, without the consent of
the Holder (which consent may be withheld, in its sole discretion), enter
into any agreement offering to a third party piggyback registration rights,
which in a situation where the cutback provisions set out in Section 2
hereof applied, could adversely affect the ability of the Holder to sell
its Registrable Securities.
12. Specific Performance. The Holder, in addition to being entitled to exercise
all rights provided herein or granted by law, including recovery of
damages, will be entitled to specific performance of their rights under
this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of
the provisions of this Agreement and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be adequate.
13. Notices. All notices required or permitted under the terms of this
Agreement shall be delivered in the manner called for in the Framework
Agreement.
14. Assignment The Holder may not assign its rights under this Agreement except
to any wholly-owned subsidiary of the Holder, provided in such case that
such transferee has executed this Agreement and agreed to be bound by the
terms hereof (it being understood, however, that the Holder shall retain
all of the rights hereunder with respect to all Registrable Securities not
so transferred thereby). The transferor shall, within twenty (20) days
after such transfer, furnish the Company with written notice of the name
and address of such transferee and the securities with respect to which
such registration rights are being assigned.
15. Successors and Assigns. This Agreement shall inure to the benefit of the
successors and permitted assigns of the Holder, such that the rights under
this Agreement shall inure to the benefit of and be binding upon such
subsequent holders of the Registrable Securities without the need for an
express assignment. This Agreement shall inure to the benefit of and be
binding upon (i) the Company and any corporation resulting from any merger
or consolidation of the Company with or into such corporation (in which the
Company is not the surviving corporation) or any corporation whose
securities are issued in exchange for Common Stock and (ii) the Holder and
any corporation resulting from any merger or consolidation of the Holder
with or into such corporation (in which the Holder is not the surviving
corporation) or any corporation whose securities are issued in exchange or
common stock of the Holder.
16. Severability. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid,
illegal or unenforceable, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
17. Entire Agreement. This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and shall supersede any
prior understandings, agreements or representations, written or oral, by or
among the parties hereto.
18. Counterparts This Agreement may be executed in any number of counterparts,
each of which shall be original, and all of which together shall constitute
one instrument.
19. Amendment. Any provision of this Agreement may be amended, waived or
modified only by a writing signed by the Company and the Holder at such
time.
20. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. The parties hereby
consent to the sole and exclusive jurisdiction of any federal or state
court in the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first written above.
NCT GROUP, INC.
/s/XXXXXXX X. XXXXXXXX
By: Xxxxxxx X. Xxxxxxxx
Its: CEO
NXT PLC
/s/XXXXX XXXXX
By: Xxxxx Xxxxx
Its: Director
