EXHIBIT 10.13
GALACTICOMM TECHNOLOGIES, INC.
REGISTRATION RIGHTS AGREEMENT
AGREEMENT, dated as of the 28 day of October, 1997, between the person
whose name and address appear on the signature page attached hereto
(individually a "Holder" or, collectively with the Holders of the Units issued
in the Offering, each as defined below, the "Holders") and Galacticomm
Technologies, Inc., a company incorporated under the laws of Florida, having its
principal place of business at 0000 X.X. 47 Avenue, Suite 101, Ft. Xxxxxxxxxx,
Xxxxxxx 00000 (the "Company").
RECITALS:
A. Simultaneously with the executive and delivery of this Agreement, the
Holders are purchasing from the Company an aggregate of up to 42 units (the
"Units"), each Unit consisting of (i) a non-negotiable 10% unsecured promissory
note of the Company in the principal amount of $50,000, which is convertible
into shares (the "Conversion Stock") of the Company's common stock, par value
$.0001 per share (the "Common Stock"), under certain circumstances, and (ii)
warrants (the "Financing Warrants") to purchase an aggregate of 19,000 shares
("Financing Warrant Shares") of the Common Stock (the Financing Warrants are
hereinafter sometimes collectively referred to as the "Financing Securities"),
at an exercise price of $3.75 per Financing Warrant Share, subject to adjustment
in certain circumstances, all upon the terms set forth in the Confidential
Private Placement Memorandum of the Company dated September 15, 1997, as
supplemented on October 21 and 24, 1997 (the "Bridge Financing"); and
B. The Company desires to grant to the Holder the registration rights set
forth herein with respect to the Conversion Stock, and the Financing Warrant
Shares (collectively referred to hereinafter sometimes as the "Registrable
Securities");
NOW THEREFORE, the parties hereto mutually agree as follows:
1. MANDATORY REGISTRATION OF THE REGISTRABLE SECURITIES.
(a) The Company will include the Financing Warrant Shares (and
shares of outstanding Conversion Stock, if any) as part of the securities of the
Company covered by its registration statement (the "IPO Registration Statement")
relating to the initial underwritten public offering of the Company's
securities. The Company will prepare the IPO Registration Statement and file it
with, and use its best efforts to have it declared effective by, the Securities
and Exchange Commission (the "SEC") under the Securities Act of 1933 (the
"Act"), so as to permit the public sale of the Registrable Securities pursuant
thereto commencing on the date the IPO Registration Statement is declared
effective by the SEC (the "IPO Effective Date").
(b) Once the IPO Registration Statement covering the Registrable
Securities pursuant to the provisions of this Section 1 is declared effective by
the SEC, the Company will use its best efforts to maintain the effectiveness of
such registration statement until the earlier date to occur (the "Release Date")
of (i) the date that all of the Registrable Securities have been sold pursuant
to the IPO Registration Statement, or (ii) the date that the Holders of the
Registrable Securities receive an opinion of counsel to the Company that all of
the Registrable Securities, other than securities held by "affiliates" of the
Company, as such term is defined in
Rule 144 of the Act, may be freely traded (without limitation or restriction as
to quantity or timing and without registration under the Act) pursuant to Rule
144 of the Act or otherwise. If the Company fails to keep the IPO Registration
Statement continuously effective during such period, then the Company shall,
promptly upon the request of the Holders of at least 51% of the unsold
Registrable Securities, use its best efforts to update the IPO Registration
Statement or file a new registration statement covering the unsold Registrable
Securities subject to the terms and provisions hereof.
(c) If, for any reason (other than at the request of a Holder or
Holders) less than 80% of the Registrable Securities are included in the IPO
Registration Statement on the IPO Effective Date, the Company, within six months
after the IPO Effective Date, will use its best efforts to file and have
declared effective (within such six month period) by the SEC a new registration
statement covering all of the Registrable Securities which were not included in
the IPO Registration Statement on the IPO Effective Date. The Company will use
its best efforts to maintain the effectiveness of such registration statement
until the earlier date to occur of (i) the date that all of such Registrable
Securities have been sold pursuant to the registration statement, or (ii) the
date that the Holders of the Registrable Securities included in such
registration statement receive an opinion of counsel to the Company that all of
such Registrable Securities, other than securities held by "affiliates" of the
Company, as such term is defined in Rule 144 of the Act, may be freely traded
(without limitation or restriction as to quantity or timing and without
registration under the Act) pursuant to Rule 144 of the Act or otherwise.
2. PIGGYBACK REGISTRATION. For a period of twelve (12) months from the IPO
Effective Date up to and including the Release Date (the "Piggyback Registration
Period") , if the Company proposes to prepare and file a registration statement
(other than a registration statement on Form S-4 or Form S-8) under the Act with
the SEC covering equity or debt securities of the Company, or any such
securities of the Company held by its shareholders, the Company will give
written notice of its intention to do so by registered mail ("Notice"), at least
thirty (30) business days prior to the filing of each such registration
statement, to the Holders. Upon the written request of a Holder (a "Requesting
Holder"), made within twenty (20) business days after the date of the Notice,
that the Company include any of the Requesting Holder's Registrable Securities
(such term for purposes of this Section 2 excludes Conversion Stock) in such
proposed registration statement, the Company shall use its best efforts to cause
such registration statement (a "Piggyback Registration Statement") to be
declared effective under the Act by the SEC so as to permit the public sale of
the Requesting Holder's Registrable Securities pursuant thereto, at the
Company's sole cost and expense and at no cost or expense to the Requesting
Holders; provided, however, that if, in the written opinion of the Company's
managing underwriter, if any, for such offering, the inclusion of all or a
portion of the Registrable Securities requested to be registered, when added to
the securities being registered by the Company or the selling shareholder(s),
will exceed the maximum amount of the Company's securities which can be marketed
(i) at a price reasonably related to their then current market value, or (ii)
without otherwise materially adversely affecting the entire offering, then the
Company may exclude from such offering all or a portion of the Registrable
Securities which it has been requested to register on a pro rata basis with any
other shares of Common Stock held by other shareholders of the Company for which
registration rights have been granted prior to the IPO Effective Date. If all or
a portion of a Requesting Holder's Registrable Securities are excluded (the
"Excluded Securities") from the initial Piggyback Registration Statement
pursuant
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to the provisions of this Section 2 and a Requesting Holder's Excluded
Securities cannot be freely traded (without limitation or restriction as to
quantity or timing and without registration under the Act) pursuant to Rule 144
of the Act or otherwise by the date that the second Piggyback Registration
Statement is declared effective by the SEC, the Piggyback Registration Period
will be extended until the earlier to occur of (i) twenty-one (21) months from
the IPO Effective Date or (ii) the date that Holders of 80% of the Excluded
Securities receive an opinion of counsel to the Company that all of such
Excluded Securities, other than securities held by "affiliates" of the Company,
as such term is defined in Rule 144 of the Act or otherwise, may be freely
traded (without limitation or restriction as to quantity or timing and without
registration under the Act) pursuant to Rule 144 of the Act or otherwise.
Notwithstanding the provisions of this Section 2, the Company shall have the
right, at any time after it shall have given Notice pursuant to this Section 2
(irrespective of whether any written request for inclusion of Registrable
Securities) to elect not to file any Piggyback Registration Statement or to
withdraw the same after the filing but prior to the effective date thereof.
3. PROHIBITION ON SALES IN CERTAIN CIRCUMSTANCES. The Holders agree that
they will not sell or otherwise transfer any of their Registrable Securities
pursuant to the IPO Registration Statement, a Piggyback Registration Statement
or otherwise until one hundred eighty (180) days following the IPO Effective
Date (or such longer period as The Nasdaq Stock Market, Inc. or the National
Association of Securities Dealers, Inc. or any state regulatory authority may
require in connection with the Company's initial public offering).
4. ADDITIONAL TERMS.
(a) If any stop order shall be issued by the SEC in connection with
the IPO Registration Statement or, following its effectiveness, a Piggyback
Registration Statement (collectively referred to herein as the "Financing
Registration Statement"), the Company will use its best efforts to obtain the
removal of such order. Following the effective date of the Financing
Registration Statement, the Company shall, upon the request of the Holder,
forthwith supply such reasonable number of copies of the Financing Registration
Statement, preliminary prospectus and final prospectus meeting the requirements
of the Act, and other documents necessary or incidental to the registration and
public offering of the Registrable Securities, as shall be reasonably requested
by the Holder to permit the Holder to make a public distribution of such
securities. The Company will use its reasonable efforts to qualify the
Registrable Securities for sale in such states as the holders of such securities
shall reasonably request, provided that no such qualification will be required
in any jurisdiction where, solely as a result thereof, the Company would be
subject to (i) general service of process or to taxation or qualification as a
foreign corporation doing business in such jurisdiction or (ii) qualification
requirements which would require the Company to (A) amend its Articles of
Incorporation or Bylaws or (B) rescind, modify or amend any action taken by the
Board of Directors of the Company in accordance with their fiduciary obligations
to the Company and its shareholders; provided, however, that the Company will
make a good faith effort to obtain a waiver of any such requirement. The
obligations of the Company hereunder with respect to the Registrable Securities
are expressly conditioned on the Holder's furnishing to the Company such
appropriate information concerning the Holder,the Holder's Registrable
Securities and the terms of the Holder's offering of such securities, as the
Company may reasonably request.
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(b) The Company shall bear the entire cost and expense of each
registration of the Registrable Securities provided for herein; provided,
however, that the Holder shall be solely responsible for the fees of any legal
counsel or financial advisors retained by the Holder in connection with such
registration and any transfer taxes or underwriting discounts, commissions or
fees applicable to the Registrable Securities sold by the Holder pursuant
thereto.
(c) The Company shall indemnify and hold harmless the Holder and
each underwriter, within the meaning of the Act, who may purchase from or sell
for the Holder, any Registrable Securities, from and against any and all losses,
claims, damages and liabilities caused by any untrue statement of a material
fact contained in the Financing Registration Statement, any other registration
statement filed by the Company under the Act, any post-effective amendment to
such registration statements, or any prospectus included therein required to be
filed or furnished by reason of this Agreement or caused by any omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission based
upon information furnished or required to be furnished in writing to the Company
by the Holder or underwriter expressly for use therein, which indemnification
shall include each person, if any, who controls either the Holder or underwriter
within the meaning of the Act and each officer, director, employee and agent of
the Holder and underwriter; provided, however, that the indemnification in this
paragraph (c) with respect to any prospectus shall not inure to the benefit of
the Holder or underwriter (or to the benefit of any person controlling the
Holder or underwriter) on account of any such loss, claim, damage or liability
arising from the sale of Registrable Securities by the Holder or the
underwriter, if a copy of a subsequent prospectus correcting the untrue
statement or omission in such earlier prospectus was provided to the Holder or
underwriter by the Company prior to the subject sale and the subsequent
prospectus was not delivered or sent by the Holder or underwriter to the
purchaser prior to such sale.
(d) The Holder or underwriter or other person, as the case may be,
shall indemnify the Company, its directors, each officer signing the Financing
Registration Statement and each person, if any, who controls the Company within
the meaning of the Act, from and against any and all losses, claims, damages and
liabilities caused by any untrue statement of a material fact contained in the
Financing Registration Statement, any registration statement or any prospectus
required to be filed or furnished by reason of this Agreement or caused by any
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or omission
based upon information furnished in writing to the Company by the Holder or
underwriter expressly for use therein.
(e) If for any reason the indemnification provided for in either the
two preceding subparagraphs is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any loss, claim, damage,
liability or expense referred to therein, then the indemnifying party, in lieu
of indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by the indemnified party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnified party and the indemnifying party,
but also the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations.
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(f) Neither the filing of a Financing Registration Statement by the
Company pursuant to this Agreement nor the making of any request for
prospectuses by the Holder shall impose upon the Holder any obligation to sell
the Holder's Registrable Securities.
(g) The Holder, upon receipt of notice from the Company that an
event has occurred which requires a post-effective amendment to the Financing
Registration Statement or a supplement to the prospectus included therein, shall
promptly discontinue the sale of Registrable Securities pursuant to such
registration statement until the Holder receives a copy of the amended Financing
Registration Statement or supplemented prospectus from the Company, which the
Company shall provide as soon as practicable after such notice.
5. GOVERNING LAW.
(a) The Financing Securities are being, and will be, delivered in
Florida. This Agreement shall be deemed to have been made and delivered in the
State of Florida and shall be governed as to validity, interpretation,
construction, effect and in all other respects by the internal laws of the State
of Florida.
(b) The Company and the Holder each (i) agrees that any legal suit,
action or proceeding arising out of or relating to this Agreement, or any other
agreement entered into between the Company and the Holder pursuant to the
Private Financing or the Financing Registration Statement, shall be instituted
exclusively in the state courts of Broward or Dade Counties, Florida ("Florida
Courts"), or in the United States District Court for the Southern District of
Florida, (ii) waives any objection which the Company or such Holder may have now
or hereafter based upon FORUM NON CONVENIENS or to the venue of any such suit,
action or proceeding, and (iii) irrevocably consents to the jurisdiction of the
Florida Courts and the United States District Court for the Southern District of
Florida in any such suit, action or proceeding. The Company and the Holder each
further agrees to accept and acknowledge service of any and all process which
may be served in any such suit, action or proceeding in the Florida Courts or in
the United States District Court for the Southern District of Florida and agrees
that service of process upon the Company or the holder mailed by certified mail
to the Company at the address set forth above, in the case of the Company, and
to the Holder's address set forth below, in the case of the Holder,shall be
deemed in every respect effective service of process upon the Company or the
Holder, as the case may be, in any suit, action or proceeding.
6. AMENDMENT. This Agreement may only be amended by a written instrument
executed by the Company and the Holder.
7. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings of the parties, oral and written, with
respect to the subject matter hereof.
8. EXECUTION IN COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
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9. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed duly given when delivered by
hand or five days after such notice is mailed by registered or certified mail,
postage prepaid, return receipt requested, as follows:
(a) if to the Holder, to his or her address set forth on the
signature page of this Agreement;
(b) if to the Company, to the address set forth on the first page of
this Agreement.
10. BINDING EFFECT; BENEFITS. The Holder may not assign his or her rights
hereunder. This Agreement shall inure to the benefit of, and be binding upon,
the parties hereto and their respective heirs, legal representatives and
successors. Nothing herein contained, express or implied, is intended to confer
upon any person other than the parties hereto and their respective heirs, legal
representatives and successors, any rights or remedies under or by reason of
this Agreement.
11. HEADINGS. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
12. SEVERABILITY. Any provision of this Agreement which is held by a court
of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.
GALACTICOMM TECHNOLOGIES, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
HOLDER:
____________________________________
Signature
____________________________________
Print Name
Address of Holder:
____________________________________
____________________________________
____________________________________
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