EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
AGREEMENT, made as of the 23rd day of April, 1999, by and between Metris
Companies Inc., a corporation organized and existing under the laws of Delaware
(the "Company") and Xxxxxx X. Xxxx ("Xxxx").
WHEREAS, the Company, Fingerhut Companies Inc. and Xxxx have previously
entered into a Settlement Agreement dated October 18, 1996 (the Settlement
Agreement"), which provides, in pertinent part, that the Company agrees to
permit registration of all of the remaining shares of common stock of the
Company owned by Xxxx (the "Securities") by way of a piggyback registration
with any future or contemplated additional offering by the Company with respect
to one registration statement and that Xxxx will under no circumstances have any
demand registration rights;
WHEREAS, the Company and Xxxx desire to modify the terms of Section 1(c) of
the Settlement Agreement with respect to registration rights and certain other
matters; and
WHEREAS, Xxxx acknowledges the existence of certain registration rights
granted to certain investors affiliated with Xxxxxx X. Xxx Company (the "Xxx
Investors") pursuant to the Registration Rights Agreement dated as of December
9, 1998, by and between the Company and the Xxx Investors (the " Xxx
Registration Rights Agreement").
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
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shall have the following respective meanings:
"Act" means the Securities Act of 1933, as amended, or any successor
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
"Commission" means the Securities and Exchange Commission, or any other
Federal agency at the time administering the Act.
"Common Stock" means the common stock of the Company.
"Company" means Metris Companies Inc., a Delaware corporation, and its
successors and assigns, including any successors by merger.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Holder" means Xxxxxx X. Xxxx.
"Xxxx Securities" means (i) the 96,125 shares of Common Stock issuable
pursuant to the exercise of a fully vested option granted to Xxxx under the
Settlement Agreement at a price of $2.76 per share, and (ii) any Common Stock
issued in respect of the shares described in clause (i) upon any stock split,
stock dividend, recapitalization or other similar event.
"Registrable Securities" means the Xxxx Securities.
The term "register" means to register under the Act and applicable state
securities laws for the purpose of effecting a public sale of securities.
2. Registration Rights. (a) In no event later than June 30, 1999, the
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Company shall file with the Commission a registration statement on Form S-3 (or
any successor form to Form S-3) for a public resale offering of the Registrable
Securities of the Holder and shall use its reasonable best efforts to cause such
registration statement to become and remain effective for the period ending on
the date the resale of all shares registered thereunder is complete or until
June 30, 2001, whichever shall first occur. If for any reason the Company is
not eligible to file such registration statement on Form S-3 (or any successor
form to Form S-3), the Company shall effect such registration using such form as
the Company is then eligible to use.
(b) In the case of any registration pursuant to this Section 2, the
Company shall keep Xxxx, through his counsel, (Xxxxx Xxxxxx), advised of the
initiation and completion of such registration. The Company will promptly:
(i) Prepare and file with the Commission the registration statement
described in Section 2(a) above and thereafter use reasonable best efforts to
cause such registration statement to become effective;
(ii) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectuses used in
connection with such registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
(iii) Furnish to Xxxx such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as he may reasonably request in order
to facilitate the disposition of the securities covered by such registration
statement;
(iv) Use commercially reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by Xxxx
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a
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general consent to service of process in any such states or jurisdictions;
(v) Notify Xxxx 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 a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing;
(vi) Cause all such shares of Registrable Securities to be listed on
each securities exchange or market system on which similar securities issued by
the Company are then listed; and
(vii) Provide a transfer agent and registrar for all such shares of
Registrable Securities not later than the effective date of such registration
statement.
(c) Xxxx shall provide the Company with all necessary and reasonable
assistance in the preparation and filing of the registration statement required
to be prepared and filed by the Company and all other obligations of the Company
under this Section 2.
(d) The Company shall have the right, upon the advice of the Board
of Directors of the Company (the "Board"), upon giving written notice to Xxxx of
the exercise of such right, to require Xxxx not to sell any shares pursuant to
the registration statement filed pursuant to Section 2 for a period (as
determined in good faith by the Board) from the date on which such notice is
given (a "black-out period"), if (i)(A) the Company is engaged in discussions or
negotiations with respect to, or has proposed or taken a substantial step to
commence, or there otherwise is pending, any merger, acquisition, other form of
business combination, divestiture, tender offer, financing or other transaction,
or there is an event or state of facts relating to the Company, in each case
which is material to the Company (as reasonably determined by the Board) (any
such negotiation, step, event or state of facts being herein called "Material
Activity"), (B) in the reasonable judgment of the Board, after consultation with
and acting upon the written advice of outside counsel, disclosure of such
Material Activity would be necessary or advisable under applicable securities
laws and (C) such disclosure would, in the reasonable judgment of the Board, be
adverse to the interests of the Company, or (ii) the Board, in its reasonable
judgment, after consultation with and acting upon the written advice of outside
counsel, deems it necessary to file a post-effective amendment to such
registration statement or to prepare a supplement to, or otherwise amend, the
form of prospectus contained therein. During any such black-out period, Xxxx
agrees not to sell any Registrable Shares under such registration statement for
such period of time as the Board, acting on the written advice of outside
counsel, may in good xxxxx xxxx advisable; provided, however, that no single
black-out period will be longer than sixty (60) calendar days and, in the
aggregate, all black-out periods in any twelve (12) month period shall not
include more than one hundred twenty (120) calendar days; provided, further,
however, that no black-out period may be imposed by the Company during the first
thirty calendar days after the effectiveness of the registration statement filed
pursuant to Section 2. The period of effectiveness
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of any registration statement in effect at the time of a black-out period and
the termination period under Section 7 shall be extended for a period equal to
the black-out period.
3. Acknowledgment. Xxxx hereby acknowledges and agrees that (i) under the
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Xxx Registration Rights Agreement, the Company has the obligation to register
certain securities of the Company and (ii) the Registrable Securities shall not
be included in any underwritten offering of all or a portion of the securities
to be sold by the Xxx Investors (or their assignees) initiated solely by the Xxx
Investors without the consent of the Xxx Investors.
4. Public Offering. At the written request of Xxxx, and with the
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permission of the Xxx Investors and in accordance with the requirements and
limitations of the Xxx Investors Registration Rights Agreement, all or any
portion of the Registrable Securities may be distributed by means of an
underwriting; provided that such right may be exercised by Xxxx no more than
once and provided further that Xxxx agrees to sell his Registrable Securities to
the underwriters on substantially the same terms as the Xxx Investors (with such
exceptions as are herein provided). Any underwritten offering would be subject
to cut-back in accordance with the provisions of the Xxx Investors Registration
Rights Agreement and any underwriter or underwriters would be selected pursuant
to the Xxx Investors Registration Rights Agreement. Notwithstanding the rights
of Xxxx set forth in this Section 4 above, Xxxx will have the right to sell Xxxx
Securities pursuant to a distribution which does not involve an underwritten
offering (whether on a "firm," "best efforts" or "all reasonable efforts" basis
or otherwise), such as an agented offering, block trade, or other non-
underwritten offering, without the participation of the Xxx Investors and may
select the broker or placement agent for such agented offering; provided,
however, that (i) each broker or agent so selected shall be reasonably
acceptable to the Company (ii) the offering shall be subject to any black-out
period as provided in Section 2(d) hereof and (iii) no more than one non-
underwritten offering can be made by Xxxx. Xxxx shall give the Company written
notice of any intent to utilize the shelf registration to make an agented
offering or block trade and following receipt of such notice, the Company shall
promptly undertake any procedures required by Section 2(b) hereof to permit Xxxx
to make the offering.
5. Indemnification. (a) The Company agrees to indemnify and hold harmless
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Xxxx, to the extent permitted by law, against all damages caused by any untrue
or alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by Xxxx expressly for use
therein or by Xxxx'x failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished Xxxx with a sufficient number of copies of the same.
(b) In connection with any registration statement in which Xxxx is
participating, Xxxx will furnish to the Company in writing such information as
the Company reasonably requests for use in connection with any such registration
statement or prospectus and,
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to the extent permitted by law, will indemnify and hold harmless the Company,
its directors and officers and each person who controls the Company (within the
meaning of the Securities Act) against all damages resulting from any untrue or
alleged untrue statement of material fact contained in the registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by Xxxx
specifically for use in such registration statement; provided that the
obligation to indemnify will be several, not joint and several, among all
sellers named in the registration statement and the liability of each such
seller will be in proportion to and limited to the net amount received by such
seller from the sale of Common Stock, pursuant to such registration statement.
(c) Any person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any consent to the
entry of any judgment or any settlement made by the indemnified party without
its consent (but such consent will not be unreasonably withheld). An
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, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling person of such
indemnified party.
6. Current Public Information. Until all shares of Registrable Securities
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subject to this Agreement have been sold, the Company will timely file all
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the Commission thereunder, and will
take such further action as any holder or holders of Registrable Securities may
reasonably request, all to the extent required to enable Xxxx to sell his shares
pursuant to Rule 144 under the Securities Act and pursuant to Form S-3 or
similar registration form hereunder adopted by the Commission. Upon written
request, the Company will deliver to Xxxx a written statement as to whether it
has complied with such requirements.
7. Termination of Registration Rights. Notwithstanding the foregoing
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provisions of this Agreement, and subject to extension as provided in Section
2(d), the Company's obligations pursuant to Section 2 shall terminate, on June
30, 2001 or, if earlier, at the time Xxxx (i) is not an
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affiliate of the Company and has not been so for the ninety (90) consecutive
days prior to the date of determination and (ii) may sell all of his shares of
Common Stock in compliance with Rule 144 (other than pursuant to Rule 144(k)) in
a single 90-day period under the Securities Act.
8. Expenses. The Company shall pay all general out-of-pocket costs in
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connection with any registration pursuant to this Agreement, subject to the
exceptions herein set forth. The costs and expenses of any such registration
shall include, without limitation, the fees and expenses of the Company's
counsel and its accountants and all other out-of-pocket costs 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 and 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 securities so registered, the costs and
expenses incurred in connection with the qualification of such securities so
registered under the "blue sky" laws of various jurisdictions, the fees and
expenses of the Company's transfer agent, expenses of all marketing and
promotional efforts requested by the managing underwriter and all other costs
and expenses of complying with the foregoing provisions hereof with respect to
such registration; but shall not include the registration and filing fees
attributable to the Xxxx Securities or out-of-pocket expenses directly
attributable to the sale of the Xxxx Securities (such as a prospectus supplement
relating solely to the Xxxx Securities) which will be paid or reimbursed to the
Company by Xxxx. In addition, Xxxx will pay or reimburse the Company an amount
equal to 2% of all general out-of pocket costs incurred by the Company directly
in connection with a registration under Section 2, which shall not include costs
which the Company would normally incur notwithstanding the registration. The
Company shall not be responsible for paying the fees and expenses of counsel to
Xxxx or any underwriting commission or discount, selling agent or similar fees
relating to Securities sold by Xxxx. The Company shall not have any obligation
to implement the provisions of this Agreement unless Xxxx shall have deposited
with the Company prior to the filing of the registration statement the sum of
$5,000 as a credit against any fees or expenses due to be paid or reimbursed by
Xxxx. If the costs to be paid by Xxxx are less than $5,000, the remaining
balance shall be promptly refunded to him. If such expenses are more than
$5,000, Xxxx will promptly reimburse the Company after receipt of the invoice.
9. Listing Application. If shares of any class of stock of the Company
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shall be listed on a national securities exchange, the Company shall, at its
expense, include in its listing application all of the shares of the listed
class then owned by any Investor.
10. Damages. The Company recognizes and agrees that Xxxx may not have an
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adequate remedy if the Company fails to comply with the provisions of this
Agreement, and that damages may not be readily ascertainable, and the Company
expressly agrees that in the event of such failure Xxxx shall be entitled to
seek specific performance of the Company's obligations hereunder (in addition to
being entitled to seek damages) and that the Company will not oppose an
application seeking such specific performance.
11. Representations and Warranties of the Company. The Company represents
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and
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warrants to Xxxx as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government by which the Company or any of its properties or assets is bound, the
Amended and Restated Certificate of Incorporation or Amended and Restated By-
laws of the Company or any provision of any indenture, agreement or other
instrument to which the Company or any or its properties or assets is bound,
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any such indenture, agreement or other instrument
or result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon any of the properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
12. Miscellaneous.
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(a) Xxxx hereby releases and forever discharges the Company and its
officers, directors, employees, shareholders, agents, attorneys,
representatives and assigns, of and from any and all claims, demands, causes of
action, attorneys' fees, expenses and all other liability of any kind or nature
whatsoever, direct or indirect, known or unknown, whether in law or equity,
contract, tort or otherwise, or pursuant to statute, which Xxxx now has or may
have, arising out of Section 1(c) of the Settlement Agreement and matters
relating thereto. The Company hereby releases and forever discharges Xxxx, his
attorneys, heirs and assigns of and from any and all claims, demands, causes of
action, attorneys' fees, expenses and all other liability of any kind or nature
whatsoever, direct or indirectly, known or unknown, whether in law or equity,
contract, tort or otherwise or pursuant to statute, which the Company now has,
or may have, arising out of Section 1(c) of the Settlement Agreement and matters
relating thereto.
(b) All notices, requests, consents and other communications hereunder
shall be in writing and shall be mailed by certified or registered mail, return
receipt requested, postage prepaid, or telecopied or sent by other facsimile
method addressed as set forth on Schedule I attached hereto.
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(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without giving effect to the conflicts
of laws principles thereof.
(d) This Agreement supersedes and replaces Section 1(c) of the
Settlement Agreement. This Agreement may not be amended or modified or
assigned, and no provision hereof may be waived, without the written consent of
the Company and Xxxx.
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(e) This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
(f) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by each of the signatories hereto as of the date and year first above
written.
METRIS COMPANIES INC.
By /s/ Xxxxxx X. Xxxxxx
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/s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
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SCHEDULE I
Company
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Metris Companies Inc.
000 Xxxxx Xxxxxxx 000
Xxxxx 0000
Xx. Xxxxx Xxxx, XX 00000
Attn: Z. Xxxx Xxxxxxxx
Fax: 000-000-0000
Xxxx
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Xx. Xxxxxx X. Xxxx
00 Xxxxxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Fax: 000-000-0000
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