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EXHIBIT 10.38
SECOND AMENDMENT
TO THE REGISTRATION RIGHTS AGREEMENT
WHEREAS, Xxxxx Xxxxxxx Enterprises, Inc., Xxxxx Xxxxxx, Xxxxxx Xxxx,
Xxxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxxxxxx
and Xxxx Xxxxxxxxx (the "Investor(s)") entered into a certain Registration
Rights Agreement dated as of October 19, 1995 (the "Registration Rights
Agreement") and a First Amendment to the Registration Rights Agreement dated as
of July 1, 1996 (the "First Amendment") with VASCO Corp. (the "Company")
relating to the registration of shares of VASCO Corp. pursuant to the
Securities Act of 1933; and
WHEREAS, the Company has not registered The Shares which are the subject
of the Registration Rights Agreement as of the date of this Second Amendment to
the Registration Rights Agreement (the "Second Amendment").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Second Amendment, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree to amend the Registration Rights Agreement and the
First Amendment as follows:
1. The First Amendment to the Registration Rights Agreement shall be null
and void in its entirety except for any provisions which may be restated
in this Second Amendment.
2. All capitalized terms in this Second Amendment, unless otherwise
indicated, shall have the same meaning as set forth in the Registration
Rights Agreement.
3. Wherever in the Registration Rights Agreement the dollar amount/price
$3.50 appears, the dollar amount/price $7.00 shall be substituted in its
place. And wherever in the Registration Rights Agreement the dollar
amount/price $7.00 appears, the dollar amount/price $14.00 shall be
substituted in its place.
4. For clarification purposes, wherever the words "Shares underlying the
Units" appear in the Registration Rights Agreement, the words "Shares
comprising the Units" shall be substituted in their place.
5. Wherever the word "Warrant(s)" appears in the Registration Rights
Agreement, the words "New Warrant(s)" as defined herein, shall be
substituted in its place so that the New Warrants and the shares
underlying the New Warrants shall have the same rights under the
Registration Rights Agreement which the original Warrants and the
shares underlying the original Warrants had in the Registration Rights
Agreement.
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6. The Investors, at this time, will forego any right to demand registration
pursuant to paragraph 3 of the Registration Rights Agreement and the First
Amendment thereto until March 31, 1998.
7. Wherever in the Registration Rights Agreement the date July 1, 1996
appears, the date March 31, 1998 shall be substituted in its place.
8. At each Investors election, the Company shall repurchase 1/3 of the Units
held by each Investor (which shall consist of two shares and one warrant),
rounding down to the nearest whole Unit, at a price of $14.00 per Unit.
Each Investor shall make such election by March 31, 1997, and the Company
shall remit said payments for the redemption to each Investor promptly
after the Units have been delivered to the Company. No Investor shall be
obligated to have his Units redeemed.
9. Each Investor shall deliver all warrants associated with any Units which
have not been redeemed by the Company pursuant to the previous paragraph,
and in return each Investor shall receive four (4) warrants to purchase
shares of VASCO common stock at any time after March 31, 1997 and no later
than March 31, 2000, for a purchase price of $5.19 per share. Each
warrant shall provide for the exercise of a warrant by a cash payment and
shall also contain a provision providing for the cashless purchase of the
warrants on a formula as set forth below, provided that in the event of a
cashless exercise, all warrants held by the Investor are exercised. The
cashless option provision shall be as follows:
X = Y (A - B)
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A
Where X = the number of shares of common stock to be issued to
Investor.
Where Y = the number of shares of common stock purchasable under
the warrant(s) (at the date of such calculation).
Where A = the fair market value of one share of the Company's
common stock as determined by the last traded price prior to
the date of such calculation.
Where B = the exercise price (as adjusted to the date of such
calculation).
Notwithstanding the value for X which is reached after
applying the above formula, in no event shall X equal
more than 25% of Y.
10. Notwithstanding whether or not the Investors made the election as set
forth in paragraph 8, each Investor shall have the right to cause the
Company to repurchase any of The
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Shares which they may hold after March 31, 1997 if any time after the date
hereof the Company raises financing equal to or greater than $5,000,000 in
a debt or equity private placement or public offering. Notwithstanding any
election which the Investors may make pursuant to this paragraph to have
the Company repurchase the remaining Shares, the Investors will be entitled
to retain the New Warrant(s).
11. Nothing herein shall restrict the right of any Investor to sell any of
The Shares comprising the Units or any shares underlying the New Warrants
in any transaction permitted by law or regulation. However, once any of
The Shares have been sold, any rights associated with The Shares
comprising the Units created by the Registration Rights Agreement or this
Second Amendment thereto, shall be extinguished.
12. This Second Amendment shall be binding on the successors and assigns of
the parties hereto.
IN WITNESS WHEREOF, this Second Amendment has been duly executed and
delivered by the duly authorized officer of each party hereto as of this 7th
day of March, 1997.
COMPANY:
VASCO CORP.
By: /s/ T. Xxxxxxx Xxxx
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Name:
Title:
INVESTORS:
/s/ Xxxxx Xxxxxxx /s/ Xxxxx Xxxxxxx
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XXXXX XXXXXXX ENTERPRISES, INC. XXXXX XXXXXX
By Xxxxx Xxxxxxx, President By his Attorney in fact, Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx /s/ Xxxxx Xxxxxxx
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XXXXXX XXXX XXXXXXX XXXXXXX
By his Attorney in fact, Xxxxx Xxxxxxx By his Attorney in fact, Xxxxx Xxxxxxx
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/s/ Xxxxx Xxxxxxx /s/ Xxxxx Xxxxxxx
-------------------------- -----------------------------
XXXXXXX XXXXXXX XXXX XXXXXXX
By his Attorney in fact, Xxxxx Xxxxxxx By her Attorney in fact, Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx /s/ Xxxxx Xxxxxxx
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XXXXX XXXXXXX XXXX XXXXXXXXX
By his Attorney in fact, Xxxxx Xxxxxxx By his Attorney in fact, Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx
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XXXX XXXXXXXXX
By his Attorney in fact, Xxxxx Xxxxxxx
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CORRECTION RIDER TO THE SECOND AMENDMENT TO THE REGISTRATION RIGHTS AGREEMENT
On this 19th day of March, 1997, the parties hereto agree to correct the
Second Amendment to the Registration Rights Agreement dated March 7, 1997. For
clarification, consistent with the parties intent, the words "for each such
warrant" and "the New Warrants" shall be inserted into the first sentence of
Paragraph 9 so the sentence reads: "Each Investor shall deliver all warrants
associated with any Units which have not been redeemed by the Company pursuant
to the previous paragraph, and in return for each such warrant, each Investor
shall receive four (4) warrants, the New Warrants, to purchase shares of VASCO
common stock at any time after March 31, 1997 and no later than March 31, 2000,
for a purchase price of $5.19 per share."
Acknowledged and Agreed:
COMPANY: VASCO CORP.
By: /s/ T. Xxxxxxx Xxxx
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Name:
Title:
INVESTORS:
/s/ Xxxxx Xxxxxxx /s/ Xxxxx Xxxxxxx
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XXXXX XXXXXXX ENTERPRISES, INC. XXXXX XXXXXX
By Xxxxx Xxxxxxx, President By his Attorney in fact, Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx /s/ Xxxxx Xxxxxxx
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XXXXXX XXXX XXXXXXX XXXXXXX
By his Attorney in fact, Xxxxx Xxxxxxx By his Attorney in fact, Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx /s/ Xxxxx Xxxxxxx
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XXXXXXX XXXXXXX XXXX XXXXXXX
By his Attorney in fact, Xxxxx Xxxxxxx By her Attorney in fact, Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx /s/ Xxxxx Xxxxxxx
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XXXXX XXXXXXX XXXX XXXXXXXXX
By his Attorney in fact, Xxxxx Xxxxxxx By his Attorney in fact, Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx
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XXXX XXXXXXXXX
By his Attorney in fact, Xxxxx Xxxxxxx
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NUMBER: ##### **####** SHARES
VASCO CORP.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
COMMON STOCK PURCHASE WARRANTS
This Certifies that _______________________ (the "holder") is the owner of ####
Common Stock Purchase Warrants (the "Warrants"), each Warrant giving the holder
the right to purchase one (1) fully paid and non-assessable share of Common
Stock, $.001 par value, of VASCO CORP. (the "Company") at any time through
OCTOBER 31, 2000, (the "exercise date") at an exercise price of $6.00 per
Warrant and subject to the terms, conditions and limitations set forth herein.
These Warrants are exerciseable at the option of the holder. In the event of a
Secondary Public Offering (the "Offering"), the Company has the right to call
these Warrants at the exercise price 30 days prior to the Offering. Surrender
of the Warrants and $6.00 per Warrant prior to or simultaneous to but no later
than the closing of the Offering will entitle the holder to one (1) share of
free tradeable, registered, non-restricted share of Common Stock of the
Company. The Company will permit "cashless exercise" (credit of the intrinsic
value of the herein Warrants against the Offering price) of the Warrants upon
request of the holder immediately prior to the Offering, based on the Offering
price, with adjustment for commissions and expenses.
As of Midnight of the exercise date, any unexercised Warrants issued herein
will automatically and without notice terminate and become null and void,
unless extended by action of the Board of Directors. Any exercise of these
Warrants shall be in writing, addressed to the Secretary of the Corporation at
its principal place of business, using the form attached hereto, and shall be
accompanied by payment in full by check.
In the event, at the time of exercise of the Warrants, there does not exist a
Registration Statement on an appropriate Form under the Securities Act of 1933,
as amended (the "Act"), which Registration Statement shall have become
effective and shall be current with respect to the underlying shares being
purchased, and in the opinion of counsel to the Company such underlying shares
will upon issuance be "restricted" securities within the meaning of Rule 144
under the Act, you will represent and warrant to the Company (i) that, upon
exercise of the Warrants, you are purchasing the underlying shares for
investment only and not with a view to the resale or distribution thereof and
(ii) that any subsequent resale or distribution of any such underlying shares
shall be made either pursuant to (x) a Registration Statement on an appropriate
Form under the Act, which Registration Statement shall have become effective
and shall be current with respect to the underlying shares being sold, or (y) a
specific exemption from the registration requirements of the Act, but in
claiming such exemption, you shall, prior to any offer for sale or sales of
such underlying shares, obtain a favorable written opinion from counsel for, or
approved by the Company, as to the applicability of such exemption.
IN WITNESS WHEREOF, the said Corporation has caused this Certificate to be
signed by its authorized officers, and its Corporate Seal, to be hereunto
affixed this 31st day of October, 1995.
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Secretary President
(Apply Corporate Seal)
