Exhibit 10 (xxxviii)
XXXXX TECHNOLOGIES, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of December 16, 1998
by and among Xxxxx Technologies, Inc., a Delaware corporation (the "Company"),
and Xxxxxxx X. Xxxx & Associates, L.P. ("Xxxx") on behalf of itself and its
affiliates.
WHEREAS, Xxxx has offered to refrain from selling, transferring or
otherwise disposing of any of the shares (the "Shares") of common stock, par
value, $0.10 per share, of the Company (the "Common Stock") that it beneficially
owns as of the date hereof, or any additional shares of Common Stock it
beneficially owns after this date, until after May 11, 2000, with certain
exceptions, if the Company agrees to register the Shares and such additional
shares (the "Registrable Securities") under the Securities Act of 1933, as
amended (the "Securities Act"); and
WHEREAS, the Company is willing to provide the registration rights
set forth in this Agreement in exchange for the various agreements provided
herein by Xxxx in connection with Xxxx'x sale, transfer or other disposition of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
Demand Registration.
a. Requests for Registration. At any time after May 11, 2000,
Xxxx may demand registration under the Securities Act (the
"Demand Registration") for an underwritten offering of all or
any portion of the Registrable Securities by sending written
notice of the demand to the Company. Such notice shall specify
the number of the Registrable Securities sought to be
registered. The Company will then use its best efforts to file
with the Securities and Exchange Commission (the "SEC"), at
the earliest possible date but no later than 90 days following
such a demand, the registration statement for the Demand
Registration (the "Demand Registration Statement"). Xxxx shall
have the right to two Demand Registration Statements.
b. Registration of Other Securities. Whenever the Company shall
effect
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a Demand Registration Statement, no shares of Common Stock
owned by other stockholders of the Company ("Other
Stockholders") other than the Registrable Securities shall be
included among the shares of Common Stock covered by such
registration statement unless Xxxx shall have consented in
writing to the inclusion of such other shares of Common Stock.
c. Expenses. Except as provided below, Xxxx will pay all of the
expenses relating to (i) the preparation, filing and
distribution of the registration statement, including the
filing fees, printing expenses, messenger and delivery
expenses, fees and disbursements of counsel for the Company
and for Xxxx and fees and expenses of the independent
certified accountants relating to the preparation of the
Demand Registration Statement, but excluding the salary costs
and expenses of employees of the Company who participate in
the preparation of the registration statement, and (ii) the
sale of the Registrable Securities, including commissions,
discounts and expenses of the underwriters, but excluding the
costs incurred by the Company in connection with the
participation of the Company's employees in the road show for
the offering and sale of the Registrable Securities. The
Company will pay any expenses otherwise payable by Xxxx and
included in (i) above to the extent such expenses exceed
$500,000 with respect to the first Demand Registration
Statement prepared by the Company pursuant to Section 1.a.
hereof and $250,000 with respect to the second Demand Regis
tration Statement. If shares of Common Stock to be sold by the
Company or Other Stockholders are included in the Demand
Registration Statement, the Company or the Other Stockholders
will pay their pro rata share, in proportion to the number of
shares of Common Stock they have included in the Demand
Registration Statement, of the expenses otherwise payable by
Xxxx and included in (i) above, and the maximum amount of
expenses included in (i) above that Xxxx will pay in
connection with the Demand Registration Statement will be
reduced on a basis proportional to the amount of securities
being registered for the Company and such Other Stockholders.
The Company and any Other Stockholders will pay the
commissions, discounts and expenses of the underwriters
relating to their respective sales of shares of Common Stock
registered on the Demand Registration Statement, if any.
d. Priority on Demand Registration. If the managing underwriters
advise the Company that in their good faith opinion the number
of the Registrable Securities and other shares of Common Stock
requested to be included in the Demand Registration Statement
exceeds the number that can be sold in such offering, the
Company will include in such Demand Registration Statement (i)
first, the Registrable Securities requested to be included in
such Demand Registration Statement, (ii) second, assuming Xxxx
has consented in writing to their inclusion in such Demand
Registration Statement, any shares of Common Stock that the
Company desires to
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include on its own behalf and (iii) third, assuming Xxxx has
consented in writing to their inclusion, any shares of Common
Stock beneficially owned by the Other Stockholders, pro rata
on the basis of the number of shares of Common Stock that the
Other Stockholders wanted to register.
e. Incomplete Offering relating to Demand Registration. A Demand
Registration Statement shall not be considered to be one of
Xxxx'x two Demand Registration Statements under Section 1.a.
and the Company shall pay the expenses relating to such Demand
Registration Statement if the Company discontinues the
registration process pursuant to Section 4.a. hereof or the
underwriters discontinue the registration process at the
request of the Company. A Demand Registration Statement shall
be considered to be one of Xxxx'x two Demand Registration
Statements and Xxxx shall pay the expenses relating to such
Demand Registration Statement in accordance with Section 1.c.
above if Xxxx determines not to complete the offering of any
or all of the Registrable Securities covered by the Demand
Registration Statement. A Demand Registration Statement shall
not be considered to be one of Xxxx'x two Demand Registration
Statements under Section 1.a. and Xxxx shall pay the expenses
relating to such Demand Registration Statement if the offering
registered on the Demand Registration Statement is not
completed because the underwriters (i) determine not to
continue with the offering because of (A) governmental
restrictions, not in force and effect on the date the offering
process was commenced, imposed upon trad ing in securities,
the suspension of trading in securities generally on any
exchange or in the over-the-counter market by the NASD or the
declaration of a banking moratorium by federal or state
authorities; (B) political or general economic or financial
conditions; or (C) the outbreak or escalation of hostilities
or any other insurrection or armed conflict or the declaration
of a national emergency in the United States or (ii) terminate
their obligations under an underwriting agreement executed
with the Company and Xxxx in accordance with the terms of such
underwriting agreement. A Demand Registration Statement shall
be considered to be one of Xxxx'x two Demand Registration
Statements and Xxxx shall pay the expenses relating to such
Demand Registration Statement in all other situations when the
offering registered on the Demand Registration Statement is
not completed.
f. Selection of Underwriters. The Company shall have the right to
select the investment banker(s) and manager(s) for the Demand
Registration Statement and make the other decisions regarding
the underwriting arrangements for the offering covered by the
Demand Registration Statement subject to the reasonable
concurrence of Xxxx.
2. Piggyback Registrations.
a. Right to Piggyback. If at any time after May 11, 2000 the
Company
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proposes to register any of its shares of Common Stock under
the Securities Act for an underwritten offering, whether or
not for sale for its own account, and the registration form to
be used may be used for the registration of the Registrable
Securities (a "Piggyback Registration"), the Company will give
prompt written notice to Xxxx of such registration. Upon the
written request of Xxxx (given within 20 business days after
Xxxx'x receipt of the Company's notice of the proposed
registration), the Company will use its best efforts to
include in the registration statement for such Piggyback
Registration (the "Piggyback Registration Statement"), subject
to the allocation provisions below, all Registrable Securities
with respect to which the Company has received a written
request for inclusion.
b. Piggyback Expenses. In all Piggyback Registrations, the
Company shall pay all of the expenses relating to the
preparation of the Piggyback Registration and the offering of
the shares of Common Stock (except to the extent otherwise
agreed with Other Stockholders), and the Company shall pay the
commissions, discounts and expenses of the underwriters
related to the offering of the shares of Common Stock by the
Company, but will not pay the commissions, discounts and
expenses of the underwriters related to the offering of the
shares of Common Stock by Xxxx and the Other Stockholders
registered on the Piggyback Registration Statement.
c. Priority. If the managing underwriters for the Piggyback
Registration advise the Company that in their good faith
opinion the number of shares of Common Stock requested to be
included in such Piggyback Registration exceeds the number
that can be sold in such offering, the Company will allocate
the shares of Common Stock to be included as follows: first,
any shares of Common Stock that the Company proposes to sell
on its own behalf; second, Registrable Securities requested to
be included in such Piggyback Registration Statement; and
third, shares of Common Stock beneficially owned by any Other
Stockholders of the Company, pro rata on the basis of the
number of shares of Common Stock that the Other Stockholders
wanted to register.
d. Selection of Underwriters. The Company shall have the right to
select the investment banker(s) and manager(s) for the
Piggyback Registration and to make the other decisions
regarding the underwriting arrangements for the offering
covered by the Piggyback Registration Statement.
Notwithstanding the foregoing, the managing underwriter shall
be reasonably acceptable to Xxxx if Registrable Securities of
Xxxx are included on the Piggyback Registration Statement.
e. Impact on Demand Registration. Xxxx'x exercise of this right
to a Piggyback Registration will have no impact on Xxxx'x
rights to a Demand Registration.
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3. Holdback Agreements.
Xxxx shall not effect any public sale or distribution of shares of
Common Stock, regardless of when or how such shares of Common Stock were
acquired by Xxxx, or any secur ities convertible into or exchangeable or
exercisable for such securities, until after May 11, 2000, unless, in the
opinion of counsel to Xxxx, such public sale or distribution is required by
Xxxx'x fiduciary duties (or any contractual duties in existence as of the date
hereof) to the beneficial owners of such shares and such public sale or
distribution is effected in accordance with the provisions of Rule 144.
Subsequent to such date and until such time as Xxxx bene ficially owns less than
ten percent of the outstanding shares of the Common Stock, Xxxx shall not effect
any public sale or distribution of shares of Common Stock other than through the
Demand Registration or the Piggyback Registration pursuant to this Agreement, or
unless, in the opinion of counsel to Xxxx, such public sale or distribution is
required by Xxxx'x fiduciary duties (or any contractual duties in existence as
of the date hereof) to the beneficial owners of such shares and such public sale
or distribution is effected in accordance with the provisions of Rule 144. Xxxx
shall effect any sales of shares of Common Stock once it beneficially owns less
than ten percent of the outstanding shares of Common Stock in accordance with
the provisions of Rule 144 if Xxxx has a designee on the Board of Directors of
the Company or is otherwise considered to be an affiliate of the Company under
the Securities Act.
4. Registration Procedures.
Whenever the holders of Registrable Securities have requested that
any Registrable Securities be registered pursuant to Section 1 or 2 of this
Agreement, 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 its best
efforts to cause such registration statement to become
effective and to remain effective until the closing of the
underwritten offering, which shall be within five business
days after the registration statement is declared effective;
provided, however, that the Company may discontinue any effort
to prepare the registration statement or cause the
registration statement to be declared effective if either such
action, in the reasonable opinion of the Company, would
adversely affect any financing, acquisition, corporate
reorganization or other material trans action in which the
Company was engaged or planned to engage;
b. provide to Xxxx before filing a registration statement or
prospectus or any amendments or supplements thereto draft
copies (that are subject to change) of all such documents
proposed to be filed at least two weeks prior to their filing
and will give reasonable consideration in good faith to any
comments of Xxxx or its counsel;
c. furnish to Xxxx such number of copies of such registration
statement
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and any amendment or supplement thereto and the prospectus
included in such registration statement (including each
preliminary prospectus), and such other documents as Xxxx may
reasonably request in order to facilitate the disposition of
the Registrable Securities owned by Xxxx;
d. use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of
such jurisdictions as the managing underwriter(s) or Xxxx may
reasonably request;
e. enter into such customary agreements (including an
underwriting agreement in customary form) and take such other
customary actions as may be reasonably necessary to expedite
or facilitate the disposition of such Registrable Securities;
f. permit Xxxx to participate in the negotiation of the
underwriting agreement and to negotiate the pricing terms in
connection with a Demand Registration Statement and to remove
the Registrable Securities from a Piggyback Registration
Statement based upon the pricing terms;
g. obtain a "comfort" letter addressed to the Company from its
independent public accountants in customary form and covering
such matters of the type customarily covered by "comfort"
letters and provide a copy of such letter to Xxxx;
h. provide to Xxxx a copy of any opinion of counsel required by
the under writers; and
i. make available for inspection by Xxxx, any underwriter
participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent
retained by Xxxx or such underwriter, all financial and other
records and pertinent corporate documents of the Company, and
cause the Company's officers, directors and employees to
supply all information reasonably requested by Xxxx or any
such underwriter, attorney, accountant or agent in connection
with such registration statement.
5. Indemnification.
a. The Company hereby indemnifies, to the extent permitted by
law, Xxxx and its officers and directors, and each person who
controls Xxxx (within the meaning of the Securities Act),
against all losses, claims, damages, liabilities and expenses
arising out of or resulting from any untrue or alleged untrue
statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading except insofar as the same
are
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caused by or contained in any information furnished in writing
to the Com pany 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 is reasonably requested by the Company for
use in any such registration statement or prospectus and will
indemnify, to the extent permitted by law, the Company, its
directors and officers and each person who controls the
Company (within the meaning of the 0000 Xxx) against any
losses, claims, damages, liabilities and expenses resulting
from any untrue or alleged untrue statement of material fact
or any omission or alleged omission of a material fact
required to be stated in the registration statement or
prospectus or any amendment thereof or supplement thereto or
necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is
contained in information so furnished in writing by Xxxx
specifically for use in preparing the registration statement.
Notwithstanding the foregoing, the liability of Xxxx under
this Section 5(b) shall be limited to an amount equal to the
net proceeds actually received by Xxxx from the sale of
Registrable Securities covered by the registration statement.
c. 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) 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 settlement made without its consent
(but such consent will not be unreasonably withheld). An
indemni fying party who is not entitled, 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.
6. Other Agreements of Xxxx.
x. Xxxx agrees that the Company shall have the right to purchase
the Registrable Securities rather than file, upon Xxxx'x
request, a Demand Registration Statement, if, within 20
business days after receipt of Xxxx'x
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notice delivered pursuant to Section 1.a. above, the Company
notifies Xxxx by written notice of its intent to purchase all
of the Registrable Securities that Xxxx wants to register on
the Demand Registration Statement. The purchase price to be
paid by the Company for each Registrable Security shall be the
average of the average of the high and low bid prices for the
shares of Common Stock for each of the 20 business days prior
to the date of receipt by Xxxx of the Company's notice
pursuant to this Section 6.a., reduced by the amount of
commissions, discounts and expenses of underwriters that Xxxx
would have paid in connection with an underwritten sale and an
amount equal to $500,000, if the purchase is in lieu of the
first Demand Registration, or $250,000, if the purchase is in
lieu of the second Demand Registration.
x. Xxxx agrees to enter into an agreement with underwriters in
connection with any public offering by the Company of shares
of Common Stock or of securities convertible or exchangeable
into shares of Common Stock or any public offering in a Demand
Registration or a Piggy-back Registration in which Xxxx agrees
not to sell, transfer or otherwise dispose of any of the
shares of Common Stock beneficially owned by Xxxx for the
period of time requested by the underwriters.
x. Xxxx agrees to provide to the Company all information required
to be disclosed in the Demand Registration or Piggyback
Registration by Item 507 of Regulation S-K (or any successor
item) and to enter into such customary agreements (including
an underwriting agreement in customary form) and take such
other customary actions as may be reasonably necessary to
expedite or facilitate the disposition of such Registrable
Securities.
7. Termination. The rights and obligations of the parties to this Agreement
shall terminate at such time as Xxxx shall beneficially own less than 5% of the
shares of Common Stock.
8. Miscellaneous.
a. Notices. Any notices required hereunder shall be deemed to be
given upon the date when received when the notice is sent by
certified or registered mail to the address of the Company's
corporate headquarters in the case of any notice to the
Company and, until changed by notice to the Company, the
address of Xxxx on file with the Company in the case of any
notice to Xxxx.
b. Amendments and Waivers. The provisions of this Agreement may
be amended or terminated and the Company may take any action
herein prohibited, or omit to perform any act herein required
to be performed by it, if approved in writing by Xxxx.
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c. Binding Effect. This Agreement will bind and inure to the
benefit of the respective successors (including any successor
resulting from a merger or similar reorganization), assigns,
heirs and personal representatives of the parties hereto.
Without limiting the generality of the foregoing, in addition,
if Xxxx liquidates or reorganizes such that its assets are
transferred to its own partners or to another entity, such
partners or entity shall succeed to all of the rights of Xxxx
hereunder. This Agreement shall be binding upon a party hereto
upon its execution and delivery of a copy hereof.
d. Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement will be governed
by the internal law, not the law of conflicts, of Delaware.
e. Counterparts. This Agreement may be executed in counterparts,
each of which shall be considered to be an original instrument
and to be effective as of the date first written above and all
of which taken together shall constitute one and the same
instrument.
f. Interpretation. Unless the context of this Agreement clearly
requires otherwise, (i) references to the plural include the
singular, the singular the plural, the part the whole, (ii)
references to one gender include all genders and (iii)
"including" has the inclusive meaning frequently identified
with the phrase "but not limited to." The section and other
headings contained in this Agreement are for reference
purposes only and shall not control or affect the construction
of this Agreement or the interpretation thereof in any
respect.
g. Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or enforceable in any
respect for any reason, the validity, legality and
enforceability of any such provision in every other respect
and of the remaining provisions contained herein shall not be
in any way impaired thereby, it being intended that all of the
rights and privileges of Xxxx shall be enforceable to the
fullest extent permitted by the law.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first written above.
XXXXX TECHNOLOGIES, INC.
By: /s/
------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President and Chief Executive
Officer
XXXXXXX X. XXXX & ASSOCIATES, L.P.
By: /s/
------------------------------------
Name: N. Xxxxx Xxxx
Title: Managing Director
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