EXHIBIT 10.37
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered
into as of the 15th day of April, 1998, among Newtech Electronics Industries,
Inc. (f/k/a New M-Tech Corporation), a Florida corporation (the "Company"), Xxxx
Xxxxxx and Windmere Holdings Corporation, a Delaware corporation ("Windmere" and
together with Xx. Xxxxxx, the "Shareholders"). This Agreement shall become
effective upon the consummation of the Offering (as defined in the recitals
hereto).
RECITALS
WHEREAS, the Shareholders collectively own 9,500,000 of the 10,000,000
outstanding shares of the Company's common stock, par value $.0l per share (the
"Common Stock").
WHEREAS, the Company intends to file with the Securities and Exchange
Commission (the "SEC") a Registration Statement on Form S-1 (the "Registration
Statement") with respect to the Company's proposed underwritten initial public
offering (the "Offering") of Common Stock.
WHEREAS, in consideration of their services to the Company, the Company
has agreed to provide to the Shareholders certain registration rights with
respect to the shares of Common Stock held by them from time to time (such
Common Stock being referred to herein as the "Restricted Shares") following the
consummation of the Offering.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements of the parties contained herein, and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties agree as follows:
1. INCIDENTAL REGISTRATION. If, at any time commencing 180 days after
the date of the prospectus contained in the Registration Statement, the Company
proposes to file on its behalf and/or on behalf of any of its security holders
("the demanding security holders") a Registration Statement under the Securities
Act of 1933, as amended (the "Securities Act") on any form (other than a
Registration Statement on Form S-4 or S-8 or any successor form for securities
to be offered in a transaction of the type referred to in Rule 145 under the
Securities Act or to employees of the Company pursuant to any employee benefit
plan, respectively) for the general registration of the sale of securities for
cash with respect to its Common Stock or any other class of equity security (as
defined in Section 3(a)(11) of the Securities Exchange Act of 1934) of the
Company, it will give written notice to each of the Shareholders at least 30
days before the initial filing with the Commission of such Registration
Statement, which notice shall set forth the intended method of disposition of
the securities proposed to be registered by the Company. The
notice shall offer to include in such filing the aggregate number of shares of
Restricted Shares as each Shareholder may request.
If a Shareholder desires to have the Restricted Shares registered under
this Section 1, he or it shall advise the Company in writing within 15 days
after the date of receipt of such offer from the Company, setting forth the
amount of such Restricted Shares with respect to which registration is
requested. The Company shall thereupon include in such filing the number of
shares of Restricted Shares with respect to which registration is so requested,
subject to the following. In the event that the proposed registration by the
Company is, in whole or in part, an underwritten public offering of securities
of the Company, the Company shall not be required to include any of the
Restricted Shares in such underwriting unless the Shareholder agrees to accept
the offering on the same terms and conditions as the shares of Common Stock, if
any, otherwise being sold through underwriters under such registration;
provided, however, that: (i) if the managing underwriter determines in good
faith and advises the Company in writing that the inclusion of all Restricted
Shares proposed to be included by the Shareholders in the underwritten public
offering and other issued and outstanding shares of Common Stock proposed to be
included therein by persons other than the Shareholders and the Company (the
"Other Shares") would jeopardize the successful sale at the desired price of
such other securities proposed to be sold by such underwriter or underwriters,
then the Company shall be required to include in the offering (in addition to
the number of shares to be sold by the Company) only that number of Restricted
Shares that the managing underwriter believes will not jeopardize the successful
sale at the desired price of such other securities proposed to be sold by such
underwriter or underwriters, and the number of Restricted Shares and Other
Shares not included in such underwritten public offering shall be reduced pro
rata based upon the number of shares of Restricted Shares and Other Shares
requested by the holders thereof to be registered in such underwritten public
offering; and (ii) in each case all shares of Common Stock owned by the
Shareholders which are not included in the underwritten public offering shall be
withheld from the market by the Shareholder for a period, not to exceed 90 days,
which the managing underwriter reasonably determines is necessary in order to
effect the underwritten public offering.
2. REQUIRED REGISTRATION. At any time commencing 180 days after the
date of the prospectus contained in the Registration Statement, a Shareholder
may request that the Company effect the registration of the sale of Restricted
Shares under the Securities Act. Upon receipt of such request (which shall
specify the intended method or methods of disposition), the Company shall
promptly notify all holders of Restricted Shares in writing of the receipt of
such request and each Shareholder may elect (by written notice sent to the
Company within 15 days from the date of such Shareholder's receipt of the
aforementioned Company's notice) to have the sale of Restricted Shares included
in such registration thereof pursuant to this Section 2. Thereupon the Company
shall use its commercially reasonable best efforts to effect, as expeditiously
as is possible (except that such filing shall be coordinated with the close of
the fiscal quarters of the Company), the registration under the Securities Act
of the sale of all shares of Restricted Shares which the Company has been so
requested to register by such Shareholders for sale, all to the
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extent required
to permit the disposition (in accordance with the intended method or methods
thereof, as aforesaid) of the Restricted Shares so registered; PROVIDED,
HOWEVER, that the Company shall not be required to effect more than three
registrations requested by each Shareholder with respect to the sale of any
Restricted Shares pursuant to this Section 2, unless the Company shall be
eligible to file a Registration Statement on Form S-3 (or other comparable short
form) under the Securities Act, in which event there shall be no limit on the
number of such registrations pursuant to this Section 2. Notwithstanding
anything to the contrary contained herein, the obligation of the Company under
this Section 2 shall be satisfied only when a Registration Statement covering at
least 80% of the Restricted Shares specified for sale by the requesting
Shareholders in the above-described matters shall have become effective and, if
such method of disposition is a firm commitment underwritten public offering, at
least 80% of such Restricted Shares shall have been sold to the underwriters
pursuant thereto.
3. REGISTRATION PROCEDURES. If the Company is required by the
provisions of Section 1 or Section 2 to effect the registration of the sale of
any of its securities under the Securities Act, the Company will, as
expeditiously as possible:
(a) keep each Shareholder advised in writing as to the
initiation of proceedings for such registration and qualification and as to
completion thereof, and will advise any such Shareholder, upon request, of the
progress of such proceedings;
(b) prepare and file with the Commission a Registration
Statement with respect to such securities and use its commercially reasonable
best efforts to cause such Registration Statement to become and remain effective
for a period of time required for the disposition of such securities by the
holders thereof, but in no event longer than 120 days after the effective date
of such Registration Statement;
(c) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all securities covered by such Registration Statement until
the earlier of the expiration of 120 days after the effective date of such
Registration Statement and such time as all of such securities have been
disposed of;
(d) furnish to such selling Shareholders such number of copies
of a summary prospectus or other prospectus, including a preliminary prospectus,
in conformity with the requirements of the Securities Act, and such other
documents, as such selling Shareholders may reasonably request;
(e) use its commercially reasonable best efforts to register
or qualify the securities covered by such Registration Statement under such
other securities or blue sky laws of such jurisdictions within the United States
and Puerto Rico as each holder of such securities shall reasonably request
(provided, however, the Company shall not be obligated to qualify as a foreign
corporation to do business under the laws of any jurisdiction in which it is not
then
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qualified or to file any general consent to service or process), and do such
other reasonable acts and things as may be required of it to enable such holder
to consummate the disposition in such jurisdiction of the securities covered by
such Registration Statement;
(f) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such Common
Stock; and as shall be required in connection with the action taken by the
Company; and
(g) promptly notify in writing the Shareholders and each
underwriter of the happening of any event, during the period of distribution, as
a result of which the Registration Statement 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.
Whether or not the Company gives notification of any event
pursuant to clause (g) above, if so requested by the Company in writing, the
Shareholders shall promptly cease making, and shall not permit, any offers of
the Restricted Shares until such time as the Company notifies the Shareholders
that they may resume making offers.
4. UNDERWRITING DOCUMENTS; HOLDBACK
(a) Notwithstanding any provision of this Agreement to the
contrary, a Shareholder may not include any Restricted Shares in any
underwritten offering required or contemplated under this Agreement unless the
Shareholder timely executes and delivers the form of underwriting agreement,
custody agreement, power of attorney and other agreements and instruments
reasonably required by the underwriters of such offering in connection with the
preparation and consummation of such offering, which underwriting agreement
shall, at a minimum, provided for the indemnification set forth in Section 6.
(b) Except for (i) transfers made in transactions exempt from
the registration requirements under the Securities Act pursuant to Section 4(2)
thereof, and (ii) the Company's issuance and sale of Common Stock pursuant to
the exercise of any option, warrant, or other right to acquire shares of Common
Stock, the Company and each Shareholder agrees not to offer, sell, contract to
sell or otherwise dispose of any shares of Common Stock within seven days before
or 90 days after the date of any final prospectus relating to any underwritten
public offering of any of the Company's Common Stock, whether such offering is
on behalf of the Company or any Shareholders or otherwise, in each case except
pursuant to such prospectus or with the written consent of the underwriter or
underwriters for such offering. Accordingly, the Company shall not be obligated
under this Agreement to effect any registration of the sale of any Restricted
Shares during such period except with respect to the offering to which such
prospectus relates.
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5. EXPENSES. All expenses incurred in complying with this Agreement,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the NASD), printing expenses, fees and
disbursements of counsel for the Company, expenses of any special audits
incident to or required by any such registration and expenses (including
reasonable attorneys' fees) of complying with the securities or blue sky laws of
any jurisdictions pursuant to Section 3(d), except to the extent required to be
paid by participating selling securityholders by state securities or blue sky
laws, shall be paid by the Company, except that
(a) all such expenses in connection with any amendment or
supplement to the Registration Statement or prospectus filed more than 90 days
after the effective date of such Registration Statement because any holder of
Restricted Shares has not effected the disposition of the securities requested
to be registered shall be paid by such holder; and
(b) the Company shall not be liable for any fees, discounts or
commissions to any underwriter or any fees or disbursements of counsel for any
Shareholder in respect of the securities sold by the Shareholders.
6. INDEMNIFICATION. In the event of the sale of any registration of any
Restricted Shares under the Securities Act pursuant to this Agreement, the
Company shall indemnify and hold harmless the seller of such shares, each
underwriter of such shares, if any, each such broker or any other person, if
any, who controls any of the foregoing persons, within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which any of the foregoing persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement of a material fact contained in any registration statement
under which such sale of Restricted Shares were registered under the Securities
Act, any final prospectus contained therein, or any amendment or supplement
thereto, or any document prepared and/or furnished by the Company incident to
the registration or qualification of any Restricted Shares, or arise out of or
are based upon the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or,
with respect to any final prospectus, necessary to make the statements therein
in light of the circumstances under which they were made, not misleading, or any
violations by the Company of the Securities Act or state securities or 'blue
sky" laws applicable to the Company relating to action or inaction required of
the Company in connection with such registration or qualification under such
state securities or blue sky laws; and shall reimburse such seller, such
underwriter, broker or other person acting on behalf of such seller and each
such controlling person for any legal or any other expenses reasonably incurred
by any of them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company shall
not be liable to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, such final
prospectus or amendment or supplement or any document incident to the
registration or qualification of any Restricted Shares in reliance upon and in
conformity with information furnished to the Company by the Shareholder in
writing expressly for use in preparation thereof. Before Restricted Shares held
by a Shareholder shall be included in any
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registration pursuant to this Agreement, the Shareholder shall have agreed to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in this Section 6 for the indemnification of such prospective seller and
underwriter by the Company) the Company, each director of the Company, each
officer of the Company who shall sign such registration statement and any person
who controls the Company within the meaning of the Securities Act, with respect
to any untrue statement or omission from such registration statement or final
prospectus contained therein or any amendment or supplement thereto, if such
untrue statement or omission was made in reliance upon and in conformity with
information furnished to the Company in writing by such Shareholder for use in
the preparation of such registration statement, final prospectus or amendment or
supplement.
Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in this Section 6, such
indemnified party will, if a claim in respect thereof is made against any
indemnifying party, give written notice to the latter of such claim and/or the
commencement of such action. In case any such action is brought against an
indemnified party, the indemnifying party will be entitled to participate in and
assume the defense thereof, jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof, the
indemnifying party shall be responsible for any legal or other expenses
subsequently incurred by the latter in connection with the defense thereof,
provided that if any indemnified party shall have reasonably concluded that
there may be one or more legal defenses available to such indemnified party
which conflict in any material respect with those available to the indemnifying
party, or that such claim or litigation involves or could have an effect upon
matters beyond the scope of the indemnity agreement provided in this Section 6,
such indemnifying party shall reimburse such indemnified party and shall not
have the right to assume the defense of such action on behalf of such
indemnified party and such indemnifying party shall reimburse such indemnified
party and any person controlling such indemnified party for that portion of the
fees and expenses of any counsel retained by the indemnified party which are
reasonably related to the matters covered by the indemnity agreement provided in
this Section 6. The indemnifying party shall not make any settlement of any
claims indemnified against thereunder without the written consent of the
indemnified party or parties, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing provisions of this Section 6, if pursuant
to an underwritten public offering of the Common Stock, the Company, the
Shareholders and the underwriters enter into an underwriting or purchase
agreement relating to such offering which contains provisions covering
indemnification among the parties thereto in connection with such offering, the
indemnification provisions of this Section 6 shall be deemed inoperative for
purposes of such offering.
7. CERTAIN LIMITATIONS ON REGISTRATION RIGHTS. Notwithstanding the
other provisions of this Agreement, the Company shall not be obligated to
register the sale of Restricted Shares of a Shareholder if, in the opinion of
counsel to the Company, the sale or other disposition of all of
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the Shareholder's Restricted Shares may be effected in any three-month period
without registering such Restricted Shares under the Securities Act.
8. MISCELLANEOUS.
(a) NOTICE GENERALLY. Any notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder to be made
pursuant to the provisions of this Agreement shall be sufficiently given or made
if in writing and either delivered in person or delivered by reputable overnight
courier with receipt acknowledged, addressed as follows:
(i) If to the Company at:
Newtech Electronics Industries, Inc.
00000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: President
(ii) If to Xxxx Xxxxxx at:
Xxxx Xxxxxx
000 Xxxxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxx 00000
(iii) If to Windmere Holdings Corporation at:
Windmere Holdings Corporation
0000 Xxxxx Xxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000-0000
Attention: President
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered or on the date of delivery by reputable overnight courier service,
with receipt acknowledged.
(b) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto; provided, however, that, except for transfers upon a Shareholder's death
by will or the laws of descent and distribution, the Shareholders' rights
hereunder may not be transferred without the written consent of the Company.
(c) GOVERNING LAW. This Agreement shall be governed by the
laws of the State of Florida, without regard to the provisions thereof relating
to conflict of laws.
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(d) SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provisions shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
(e) ENTIRE AGREEMENT. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
exclusive statement of the Agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein and therein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to the subject
matter hereof.
(f) COUNTERPARTS. This Agreement may be executed in any number
of separate counterparts, each of which shall collectively and separately,
constitute one agreement.
(g) NO INCONSISTENT AGREEMENTS. Without the prior written
consent of the Shareholders, the Company will not hereafter enter into any
agreement with respect to its securities which grants registration rights to any
person or entity, or which is inconsistent with the rights granted to the
Shareholders in this Agreement. The Company has not previously entered into any
agreement with respect to any of its securities granting any registration rights
to any person or entity, other than the registration rights granted hereunder.
(h) REMEDIES. Each Shareholder, in addition to being entitled
to exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its 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. The Company further agrees that, if the Company
fails to comply with any provision of this Agreement, the Company shall pay to
the Company's affected thereby such amounts as shall be sufficient to cover any
costs and expenses, including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by such holders in enforcing
any of their rights or remedies hereunder.
* * * * *
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Company and the Shareholders have
executed this Agreement as of the date first above written.
NEWTECH ELECTRONICS INDUSTRIES, INC.
By: /S/ XXXX XXXXXX
--------------------------------------------------
Xxxx Xxxxxx,
Chairman of the Board, Chief Executive Officer and
President
SHAREHOLDERS:
/S/ XXXX XXXXXX
------------------------------------------------------
Xxxx Xxxxxx
WINDMERE HOLDINGS CORPORATION
By: /S/ XXXXX XXXXXXXX
--------------------------------------------------
Name: XXXXX XXXXXXXX
Title: AUTHORIZED SIGNATORY
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