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EXHIBIT 10.17
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is dated as of April
24, 1998 by and between Osage Systems Group, Inc., a Delaware corporation (the
"Company") and O. Xxxx Xxxxxxxx (the "Holder"), the sole shareholder of Open
System Technologies, Inc., a Delaware corporation ("OST").
W I T N E S E T H:
WHEREAS, the Company and the Holder are parties to a stock purchase
agreement dated as of April 24, 1998 (the "Stock Purchase Agreement") pursuant
to which the Company will acquire all of the issued and outstanding shares of
the common stock, no par value, of OST;
WHEREAS, pursuant to the Stock Purchase Agreement, the Holder is to
receive certain shares of the Company's $.01 par value common stock (the "Common
Stock"); and
WHEREAS, the parties hereto desire to set forth their agreement concerning
the registration under the Securities Act of 1933, as amended, of the Common
Stock issued to the Holder pursuant to the Stock Purchase Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
AGREEMENT
1. Definitions.
(a) "Closing" shall mean that date upon which a closing of the Stock
Purchase Agreement occurs.
(b) "Company" shall mean Osage Systems Group, Inc.
(c) "Exchange Act" shall mean the Securities Exchange Act of 1934.
(d) "Holder" shall mean O. Xxxx Xxxxxxxx, the former shareholder of
OST, who has received, or may receive subsequent to the date hereof, shares of
the Company's Common Stock pursuant to the Stock Purchase Agreement.
(e) "Person" means an individual, a partnership (general or
limited), corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a
quasi-governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
(f) "Registration Statement" shall mean the Registration Statement
of the Company filed with the SEC pursuant to the provisions of Section 2 of
this Agreement which
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covers the resale of the Restricted Stock on an appropriate form then permitted
by the SEC to be used for such registration and the sales contemplated to be
made thereby under the Securities Act, and all amendments and supplements to
such Registration Statement, including any pre-and post- effective amendments
thereto, in each case including the prospectus contained therein, all exhibits
thereto and all materials incorporated by reference therein.
(g) "Restricted Stock" shall mean all or any shares of Common Stock
or other equity securities of the Company that may be issued to the Holder
pursuant to subparagraph 1.2(b) of the Stock Purchase Agreement, and any
additional shares of Common Stock or other equity securities of the Company
issued or issuable after the date hereof in respect of any such securities (or
other equity securities issued in respect thereof) by way of a stock dividend or
stock split, in connection with a combination, exchange, reorganization,
recapitalization or reclassification of Company securities, or pursuant to a
merger, division, consolidation or other similar business transaction or
combination involving the Company; provided that: as to any particular shares of
Restricted Stock, such securities shall cease to constitute Restricted Stock (i)
when a registration statement with respect to the sale of such securities shall
have become effective under the Securities Act and such securities shall have
been disposed of thereunder; or (ii) when and to the extent such securities are
permitted to be distributed pursuant to Rule 144 (or any successor provision to
such Rule) under the Securities Act; or (iii) when such securities are otherwise
freely transferable to the public without further registration under the
Securities Act.
(i) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar or successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
any relevant time.
(j) "SEC" shall mean the United States Securities and Exchange
Commission.
(k) "Trading Day" shall mean any day on which the New York Stock
Exchange is open for trading.
Capitalized terms used in this Agreement and not otherwise defined herein
shall have the same meaning ascribed to them in the Stock Purchase Agreement.
2. Shelf Registration.
(a) The Company shall use it best efforts to prepare and file, not
later than May 25, 1999 , a Registration Statement with the SEC and use its best
efforts to, as promptly as possible have such Registration Statement declared
effective for the purpose of facilitating the public resale of the Restricted
Stock.
(b) Notwithstanding anything to the contrary contained herein, the
Company's obligation in subparagraph 2(a) above shall extend only to the
inclusion of the Restricted Stock in a Registration Statement filed under the
Securities Act. The Company shall have no obligation to assure the terms and
conditions of distribution, to obtain a commitment from an underwriter relative
to the sale of the Restricted Stock or to otherwise assume any responsibility
for the manner, price or terms of the distribution of the Restricted Stock.
Furthermore, the
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Company shall not be restricted in any manner from including within the
Registration Statement the distribution, issuance or resale of any of its or any
other securities, unless there is a reasonable probability in the opinion of
counsel experienced in such matters governed by the Securities Act, that the
inclusion of securities other than Restricted Stock would materially delay the
effectiveness of the Registration Statement.
(c) If at the time the Company is obligated to file a Registration
Statement hereunder, it has commenced the preparation of a registration
statement or has otherwise secured a commitment from a managing underwriter in
connection with an underwritten primary offering to be undertaken by the Company
(the "Primary Offering"), and the managing underwriter of such Primary Offering
advises the Company that the public resale of the Restricted Stock would be
likely to have a material adverse effect on the consummation of the Primary
Offering, then and in that event, the Company may delay the filing of the
Registration Statement with the SEC until ninety (90) days after the completion
of the Primary Offering, and the Holder agrees not to sell, transfer or
otherwise dispose of the Restricted Stock (including private sales or sales
under Rule 144) until the effective date of the Registration Statement.
3. Registration Procedures. Whenever it is obligated to register any
Restricted Stock pursuant to this Agreement, the Company shall:
(a) prepare and file with the Commission a Registration Statement
with respect to the Restricted Stock in the manner set forth at Section 2 hereof
and use its best efforts to cause such Registration Statement to become
effective as promptly as possible and to remain effective for that period
identified in subparagraph 3(g) hereafter;
(b) 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 for
the period specified in subparagraph 3(g) below and to comply with the
provisions of the Securities Act with respect to the disposition of all
Restricted Stock covered by such Registration Statement in accordance with the
Holder's intended method of disposition set forth in such Registration Statement
for such period;
(c) furnish to the Holder and to each underwriter, if any, such
number of copies of the Registration Statement and the prospectus included
therein (including each preliminary prospectus), as such persons may reasonably
request in order to facilitate the public sale or other disposition of the
Restricted Stock covered by such Registration Statement;
(d) use its best efforts to register or qualify the Restricted Stock
covered by such Registration Statement under the securities or blue sky laws of
such jurisdictions as the Holder, or, in the case of an underwritten public
offering, the managing underwriter shall reasonably request; provided, however,
that the Company shall not for any such purpose be required to qualify generally
to transact business as a foreign corporation in any jurisdiction where it is
not so qualified or to consent to general service of process in any such
jurisdiction;
(e) immediately notify the Holder under such Registration Statement
and each underwriter, at any time when a prospectus relating thereto is required
to be delivered under the
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Securities Act, of the happening of any event as a result of which the
prospectus contained in such Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material fact
required or necessary to be stated therein in order to make the statements
contained therein not misleading in light of the circumstances under which they
were made;
(f) make available for inspection by the Holder, any underwriter
participating in any disposition pursuant to such Registration Statement, and
any attorney, accountant or other agent retained by the Holder or underwriter,
all financial and other records, pertinent corporate documents and properties of
the Company, and cause the Company's officers, directors and employees to supply
all information reasonably requested by the Holder, underwriter, attorney,
accountant or agent in connection with such Registration Statement;
(g) for purposes of subparagraphs 3(a) and 3(b) above, the period of
distribution of Restricted Stock shall be deemed to extend until the earlier of:
(A) in an underwritten public offering of all of the Restricted Stock, the
period in which each underwriter has completed the distribution of all
securities purchased by it; (B) in any other registration, the period in which
all shares of Restricted Stock covered thereby shall have been sold; and (C) a
period of two (2) years from the effective date of the Registration Statement
filed by the Company with the SEC pursuant to this Agreement.
(h) if the Common Stock is listed on any securities exchange or
automated quotation system, the Company shall use its best efforts to list (with
the listing application being made at the time of the filing of such
Registration Statement or as soon thereafter as is reasonably practicable) the
Restricted Stock covered by such Registration Statement on such exchange or
automated quotation system;
(i) enter into normal and customary underwriting arrangements or an
underwriting agreement and take all other reasonable and customary actions if
the Holder sells his shares of Restricted Stock pursuant to an underwriting
(however, in no event shall the Company, in connection with such underwriting,
be required to undertake any special audit of a fiscal period in which an audit
is normally not required);
(j) notify the Holder if there are any amendments to the
Registration Statement, any requests by the SEC to supplement or amend the
Registration Statement, or of any threat by the SEC or state securities
commission to undertake a stop order with respect to sales under the
Registration Statement; and
(k) cooperate in the timely removal of any restrictive legends from
the shares of Restricted Stock in connection with the resale of such shares
covered by an effective Registration Statement.
4. Expenses.
(a) For the purposes of this Section (4), the term "Registration
Expenses" shall mean: all expenses incurred by the Company in complying with
Section (2) of this
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Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Company, "blue sky" fees, fees of the National Association
of Securities Dealers, Inc. ("NASD"), fees and expenses of listing shares of
Restricted Stock on any securities exchange or automated quotation system on
which the Company's shares are listed and fees of transfer agents and
registrars. The term "Selling Expenses" shall mean: all underwriting discounts
and selling commissions applicable to the sale of Restricted Stock and all
accountable or non-accountable expenses paid to any underwriter in respect of
the sale of Restricted Stock.
(b) Except as otherwise provided herein, the Company will pay all
Registration Expenses in connection with the Registration Statement filed
pursuant to Section (2) of this Agreement. All Selling Expenses in connection
with any Registration Statement filed pursuant to Section (2) of this Agreement
shall be borne by the Holder unless the sale of other securities is covered by
such Registration Statement, in which event the Selling Expenses shall be borne
by the Holder in proportion to the number of shares sold by him or by such
persons other than the Company (except to the extent the Company may be a
seller) as they may agree.
5. Obligations of the Holder.
(a) In connection with the registration hereunder, the Holder will
furnish to the Company in writing such information with respect to Holder and
the securities held by Holder, and the proposed distribution by him as shall be
reasonably requested by the Company in order to assure compliance with federal
and applicable state securities laws, as a condition precedent to including the
Holder's Restricted Stock in the Registration Statement. The Holder also shall
agree to promptly notify the Company of any changes in such information included
in the Registration Statement or prospectus as a result of which there is an
untrue statement of material fact or an omission to state any material fact
required or necessary to be stated therein in order to make the statements
contained therein not misleading in light of the circumstances then existing.
(b) In connection with the registration pursuant to this Agreement,
the Holder will not effect sales thereof pursuant to the Registration Statement
until notified by the Company of the effectiveness of the Registration
Statement, and thereafter will suspend such sales after receipt of telegraphic
or written notice from the Company to suspend sales to permit the Company to
correct or update a Registration Statement or prospectus. At the end of any
period during which the Company is obligated to keep a Registration Statement
current, the Holder shall discontinue sales of shares pursuant to such
Registration Statement upon receipt of notice from (i) the Company of its
intention to remove from registration the shares covered by such Registration
Statement which remain unsold, and the Holder shall notify the Company of the
number of shares registered which remain unsold immediately upon receipt of such
notice from the Company.
6. Information Blackout.
At any time when a Registration Statement effected pursuant to
Section 2 relating to Restricted Stock is effective, upon written notice from
the Company to the Holder that the
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Company has determined in good faith that sale of Restricted Stock pursuant to
the Registration Statement would require disclosure of non-public material
information, the Holder shall suspend sales of Restricted Stock pursuant to such
Registration Statement until such time as the Company notifies the Holder that
such material information has been disclosed to the public or has ceased to be
material or that sales pursuant to such Registration Statement may otherwise be
resumed.
7. Indemnification.
(a) The Company agrees to indemnify, to the extent permitted by law,
the Holder against all losses, claims, damages, liabilities and expenses joint
or several, to which an indemnified person may become subject under the
Securities Act or any other statute or at common law, insofar as such liability
(or action in respect thereof) arises out of or is based upon (a) any alleged
untrue statement of material fact contained in any Registration Statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or (b) any alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or state securities or other blue
sky laws applicable to the Company in connection with such registration, except
insofar as the same are caused by or contained in any information furnished to
the Company by the Holder for use therein or by such Holder's failure to deliver
a copy of the Registration Statement or prospectus or any amendments or
supplements thereto after the Company has furnished the Holder with a sufficient
number of copies of the same.
(b) In connection with any Registration Statement in which a Holder
is participating, the Holder shall furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any such Registration Statement or prospectus and, to the extent
permitted by law, shall indemnify the Company, its directors and officers and
each Person who controls the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses resulting from:
(i) any untrue statement of material fact contained in the Registration
Statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any 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 by such Holder; and (ii) any manner of
sale or distribution of the Restricted Stock by the Holder not in compliance
with the method of distribution permitted in the Registration Statement or
otherwise in violation of applicable securities laws; provided that the
obligation to indemnify shall be limited to the net amount of proceeds received
by the Holder from the sale of Restricted Stock pursuant to such Registration
Statement.
(c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party) 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
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satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party shall not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall 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 shall
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 and shall survive the transfer of securities. The
Company also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
8. Miscellaneous Provisions.
(a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida.
(b) Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
(c) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
without the written consent of the Company and the Holder.
(d) Notices. All communications under this Agreement shall be
sufficiently given if delivered by hand or by overnight courier or mailed by
registered or certified mail, postage prepaid, addressed,
(i) if to the Company, to:
Xx. Xxxx Xxxxxxxxxx
Chief Executive Officer
Osage Systems Group, Inc.
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
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with a copy to:
Xxxxxxx X. Xxxxx, Esquire
Xxxxxxxx Xxxxxxxxx, P.C.
Eleven Penn Center
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
(ii) if to the Holder:
Mr. O. Xxxx Xxxxxxxx
0000 X.X. 00xx Xxxxx
Xxxxxxxxx Xxxxx, XX 00000
Telephone Number: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxx, Esquire
Xxxxxxxx Xxxx & Xxxxx LLP
0000 Xxxxxxxxxx Xxxxx, X.X.
Xxxxxx, XX 00000-0000
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
or, at such other address as any of the parties shall have furnished in writing
to the other parties hereto.
(e) Successors and Assigns; Holders as Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the parties and their
respective successors and assigns, and the agreements of the Company herein
shall inure to the benefit of the Holder and his respective successors and
assigns.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Entire Agreement; Survival; Termination. This Agreement is
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
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ATTEST: OSAGE SYSTEMS GROUP, INC.
By:________________________ By:________________________
Name:
Title:
___________________________
O. Xxxx Xxxxxxxx
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