Exhibit 10.30
REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is entered into as of
May 8, 1995 (the "Effective Date") by and among Scientific Measurement Systems,
Inc., a Texas corporation (the "Company"), and Xxxxxx X. Xxxxxx, Xx., a resident
of Texas (hereinafter referred to as "Investor").
RECITALS:
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Concurrent with the signing of this Agreement, the Company and the Investor
are signing the Conversion Agreement (the "Conversion Agreement") providing for
the conversion of certain promissory notes executed by the Company, payable to
Investor, into shares of the Company's common stock ("Common Stock").
THEREFORE, for and in consideration of the covenants herein contained and
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. OPTIONAL REGISTRATIONS. If (and on each occasion that) the Company
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proposes to register any of its shares of Common Stock or securities convertible
into or exchangeable for Common Stock under the Securities Act of 1933 (the
"Securities Act") (other than a registration solely to implement an employee
benefit plan or a transaction to which Rule 145 or any other similar rule of the
Security and Exchange Commission ("SEC") is applicable), and if, in connection
therewith the Company may lawfully register the Common Stock of the Investor,
the Company will give written notice to the Investor or Investors who are
recorded on the Company's stock transfer records as holding outstanding
Registrable Securities (as hereinafter defined) (the "Holders") of such proposal
not later than forty-five (45) days prior to the anticipated filing date of such
registration, and will include in such registration and effect the registration
under the Securities Act of all Registrable Securities that such Holders may
request in writing by notice delivered to the Company within twenty (20) days
after receipt by such Holder of the notice given by the Company; provided,
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however, that in connection with any such offering by the Company of any of its
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securities, no such registration of Registrable Securities shall be required if
the managing underwriter, if any, for the Company advises the Company in
writing that including all or part of the Registrable Securities in such
offering will materially and adversely affect the proposed offering and
jeopardize the Company's ability to sell its securities pursuant to the
registration statement due to the absolute number of Registrable Securities
being included in such offering. If such managing underwriter advises the
Company that, in its opinion, part of the Registrable Securities may be included
in such offering without materially and adversely affecting the proposed
offering, then the Company shall be obligated to include such limited number of
Registrable Securities in such offering, which Registrable Securities shall be
taken from those owned and held by a group consisting of the Holders and other
holders of Common Stock having registration rights that are pari passu with
those of the Holders, and such limitation shall be imposed upon the Holders and
such other holders pro rata on the basis of the total number of Registrable
Securities owned by the Holders and such other holders or obtainable by them
upon
the exercise of rights with respect to other securities owned by them. All
expenses of such registration and offering (including the Company's attorneys'
fees) shall be borne by the Company, except that the Holders shall bear
underwriting commissions and discounts attributable to their Registrable
Securities being registered and the fees and expenses of separate counsel, if
any, for such Holders. The Investor shall be entitled to an unlimited number of
registrations under Section 1 of this Agreement.
If the Company elects to terminate any registration filed under this
Section 1, the Company will have no obligation to register the securities sought
to be included by Investor in such registration. Additionally, each Investor
included in any underwritten registration shall be entitled at any time to
withdraw such Registrable Securities from such registration prior to its
effective date in the event that such Investor shall disapprove of any of the
terms of the related underwriting agreement.
2. Registration on Form S-3.
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(a) If any Holder requests that the Company file a registration
statement on Form S-3 (or any successor form to Form S-3) for a public offering
of shares of the Registrable Securities the reasonably anticipated aggregate
price to the public of which would exceed $250,000, and the Company is a
registrant entitled to use form S-3 to register the Registrable Securities for
such an offering, the Company shall use its best efforts to cause such
Registrable Securities to be registered for the offering on such form; provided,
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however, that the Company shall not be required to effect more than one
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registration pursuant to this Section 2 in any twelve-month period. The Company
will (i) promptly give written notice of the proposed registration to all other
Holders and (ii) as soon as practicable, use its best efforts to effect such
registration (including, without limitation, the execution of an undertaking to
file post-effective amendments, appropriate qualification under applicable blue
sky or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act and any other governmental
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any Holder or Holders joining in such request
as are specified in a written request received by the Company within thirty (30)
days after receipt of such written notice from the Company. If the registration
is for a public offering involving an underwriting, the substantive provisions
of Section 1 shall be applicable to each registration initiated under this
Section 2. All expenses of such registration and offering (including the
Company's attorneys' fees) shall be borne by the Company, except that the
Holders shall bear underwriting commissions and discounts attributable to their
Registrable Securities being registered and the fees and expenses of separate
counsel, if any, for such Holders. The Investor shall be entitled to an
unlimited number of registrations under Section 2 of this Agreement.
(b) Notwithstanding the foregoing, the Company shall not be obligated
to take any action pursuant to this Section 2: (i) in any particular
jurisdiction in which the Company would be required to execute a general consent
to service of process in effecting such registration, qualification or
compliance unless the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act; (ii) if the Company, within
ten (10) days of
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the receipt of the request of the Holder, gives notice of its bona fide
intention to effect the filing of a registration statement with the SEC within
ninety (90) days of receipt of such request (other than with respect to a
registration statement relating to a Rule 145 transaction, an offering solely to
employees or any other registration which is not appropriate for the
registration of Registrable Securities); (iii) during the period starting with
the date sixty (60) days prior to the filing of, and ending on a date three (3)
months following the effective date of, a registration statement (other than
with respect to a registration statement relating to a Rule 145 transaction, an
offering solely to employees or any other registration which is not appropriate
for the registration of Registrable Securities), provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective; (iv) if the Company shall furnish to
such Holder a certificate signed by the President of the Company stating that in
the good faith judgment of the Board of Directors, it would be seriously
detrimental to the Company or its stockholders for registration statements to be
filed in the near future or for any disclosure to be made that, in the opinion
of the Board of Directors duly advised by counsel, is required to be made in
connection with the sale of Registrable Securities pursuant to such
registration, provided that the Company's obligation to use its best efforts to
file a registration statement shall be deferred for a period not to exceed
ninety (90) days from the receipt of the request to file such registration by
such Holder, and provided, further, that the Company shall not exercise its
right under this clause to defer such obligation more than once in any twelve-
month period.
3. Registrable Securities. For purposes of this Agreement, the term
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"Registrable Securities" shall mean both of the following:
(a) the Common Stock issued to Investor pursuant to the Conversion
Agreement; and
(b) any Common Stock issued or issuable with respect to the Common
Stock identified in Section 3(a) by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization.
However, the meaning of the term "Registrable Securities" shall not include any
shares of Common Stock that have at any time been sold in a registered public
offering or pursuant to Rule 144. Subject to compliance with applicable federal
and state securities laws and to Section 12 of this Agreement, the registration
rights granted under this Agreement may be assigned by the Investor, provided
that notice of such transfer and assignment, together with the name and address
of the transferee, is given to the Company.
4. Procedure for Registration. Whenever the Company is required under this
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Agreement to register Registrable Securities, it agrees to do the following:
(a) Use its best efforts to prepare promptly for filing with the SEC a
registration statement and such amendments and supplements to said registration
statement and the prospectus as may be necessary to keep the registration
statement effective and to comply with the provisions of the Securities Act for
the period necessary to complete the proposed public offering (but in no event
more than 120 days);
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(b) Furnish to each Holder such copies of each preliminary and final
prospectus and such other documents as each Holder may reasonably request to
facilitate the disposition of such Holder's Registrable Securities;
(c) Enter into any underwriting agreement with provisions reasonably
required by the proposed underwriter for the Holders, if any; and
(d) Use all reasonable efforts to register or qualify the Registrable
Securities covered by the registration statement under the securities or "blue-
sky" laws of such jurisdictions as any Holder may reasonably request, although
the Company will not be required to register in any states that require it to
qualify to do business or subject itself to general service of process, and the
Company will not be required to register in more states than is necessary to
permit the sale of the securities.
5. Limitation On Sales. In connection with any underwritten offering by
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the Company in which some or all of the Investors participate, the Investors
shall, if requested by the managing underwriter or underwriters thereof, agree
not to sell any of their Registrable Securities or any other securities of the
Company owned by the Investors in any transaction other than pursuant to such
underwritten offering for a period beginning sixty (60) days prior to the date
the Company and the underwriter reasonably expect the registration statement to
become effective, and for such period after the effective date of the
registration statement as is agreed upon by the underwriters and Company.
6. Delayed Offering. The Company may delay any underwritten offering when,
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in its good faith judgment, a condition or pending transaction exists the
disclosure of which would reasonably be expected to have a material adverse
effect on the Company. The Company may delay or withdraw any offering for any
reason.
7. Indemnification. The Company will indemnify each Investor who holds
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Registrable Securities, and each of its officers, directors and partners and
each other person, if any, who controls such person within the meaning of
Section 15 of the Securities Act, against any losses, claims, damages, expenses,
or liabilities to which such persons may become subject under the Securities
Act, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement or
any preliminary prospectus or final prospectus or amendment or supplement
thereto on the effective date thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
will reimburse such persons for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
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be liable in any such case 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,
or any preliminary prospectus or final prospectus or amendment or supplement
thereto, in reliance upon and in conformity with
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written information furnished to the Company through an instrument duly executed
by such person specifically for use in the preparation thereof.
It shall be a condition precedent to the obligation of the Company to
include in any registration statement any Registrable Securities, that the
Company shall have received an undertaking, satisfactory to the Company, from
each Holder of such Registrable Securities, to indemnify and hold harmless (in
the same manner and to the same extent as set forth in the preceding paragraph)
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 statement or omission
from such registration statement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereto, if such statement or
omission was made in reliance upon and in conformity with information furnished
to the Company through an instrument duly executed by the Holder specifically
for use in the preparation of such registration statement, preliminary
prospectus or final prospectus or such amendment or supplement thereto.
Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in the preceding
paragraphs such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party, give written notice to the latter of 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
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses incurred by the latter in connection with the defense thereof.
8. Rule 144 Requirements. For so long as the Company is subject to the
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reporting requirements of the Securities and Exchange Act of 1934, the Company
will use its best efforts to file with the SEC such information as the SEC may
require and will use its best efforts to make available Rule 144.
9. Obligations in a Registration. Any Investor owning Common Stock
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included in any registration agrees to furnish such information regarding such
person and the securities sought to be registered as the Company may reasonably
request in connection with the registration, qualification or compliance.
10. Limitations on Subsequent Registration Rights. The Company shall not,
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without the prior written consent of the Investor holding securities
representing at least a majority of the then outstanding Common Stock subject to
this Agreement enter into any agreement granting any (a) subsequent purchaser or
prospective holder of any securities of the Company, registration rights with
respect to such securities unless such registration rights are subordinate to
and do not override or conflict with the registration rights granted Investor in
this Agreement and (b) other stockholder registration rights that conflict with
this Agreement.
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11. Restrictions on Public Sale by the Company. The Company agrees not to
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effect any public sale or other distribution of its Common Stock or securities
convertible into or exchangeable for Common Stock, during the period commencing
on the seventh (7th) day prior to, and ending on the ninetieth (90th) day
following, the effective date of any underwritten registration pursuant to this
Agreement, except in connection with any such underwritten registration.
12. Transfer of Registration Rights. The rights granted Investor under
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this Agreement may be assigned to a transferee or assignee in connection with
any transfer or assignment of Registrable Securities by an Investor provided
that (a) such transfer may otherwise be effected in accordance with applicable
securities laws, and (B) such assignee or transferee acquires at least twenty-
five percent (25%) of the Common Stock then owned by such Investor (subject to
appropriate adjustment(s) for stock splits, dividends, subdivisions,
combinations, and recapitalizations).
13. Complete Agreement. This Agreement together with the Conversion
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Agreement contains the entire agreement of the parties with respect to the
subject matter hereof and supersedes any prior written or oral agreements. This
Agreement may not be modified without the written consent of the parties hereto.
14. Term. This Agreement shall terminate as to any Investor upon the
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written consent of such Investor, and shall terminate with respect to all
Investors upon the date which is five (5) years from the Effective Date.
15. Severability. If any provision of this Agreement is held to be
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illegal, invalid, or unenforceable under present or future laws, such provision
shall be fully severable and this Agreement shall be construed and enforced as
if such illegal, invalid, or unenforceable provision had never comprised a part
hereof and the remaining provisions hereof shall remain in full force and effect
and shall not be affected by the illegal, invalid, or unenforceable provision or
by its severance herefrom. Furthermore, in lieu of each illegal, invalid, or
unenforceable provision there shall be added automatically as part of this
Agreement a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and enforceable.
16. Governing Law. This Agreement will be governed by and construed in
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accordance with Texas law, excluding choice of law and conflicts of law
principles.
17. Mutual Drafting. This Agreement is the joint product of the Company,
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and Investor, whom has been represented by counsel. Each provision of this
Agreement has been subject to the mutual consultation, negotiation and agreement
of the parties and their counsel, and this Agreement shall not be construed for
or against any of the parties.
18. Good Faith Performance. Each of the parties to this Agreement agrees to
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act in good faith to accomplish the purposes of this Agreement and to fulfill
all of the covenants and conditions contained herein.
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Executed March 8, 1996 to be effective as of the Effective Date.
SCIENTIFIC MEASUREMENT SYSTEMS, INC.
By: /s/ XXXXX XXXXXXX
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Printed Name: Xxxxx Xxxxxxx
Title: President and CEO
INVESTOR:
/s/ XXXXXX X. XXXXXX, XX.
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Xxxxxx X. Xxxxxx, Xx.
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