EXHIBIT 10.23
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is entered into as of
the 29 day of January, 1996 by and between Total Control Products, Inc., an
Illinois corporation ("TCP") and ▇▇▇▇ ▇▇▇▇▇▇▇▇ ("Investor").
PRELIMINARY STATEMENT
Pursuant to the Merger Agreement (the "Investment Agreement") by and
between TCP, Investor, and various other parties dated as of the date hereof,
as partial consideration for the consummation of the transaction contemplated
by the Investment Agreement (the "Merger"), Investor has received 50,001
shares of common stock, no par value per share, of TCP ("Common Stock").
Investor's agreement to receive such shares of Common Stock upon consummation
of the Merger is on the condition that TCP agree to certain terms and
conditions related to the registration of securities of TCP, as set forth in
this Agreement.
TERMS AND CONDITIONS
In consideration of the mutual covenants and agreements contained in
this Agreement and the Investment Agreement, and intending to be legally
bound, the parties hereto agree as follows:
SECTION 1.0. DEFINITIONS. As used in this Agreement, the following
terms have the meanings indicated below or in the referenced sections of this
Agreement.
"Common Stock": TCP's Common Stock, without par value, as the same may
be constituted from time to time.
"Employment Agreement": That certain Employment Agreement dated as of
the date hereof between ▇▇▇▇ Products, Inc. and Investor.
"Exchange Act": The Securities Exchange Act of 1934, as amended from
time to time.
"Initial Public Offering": The first primary offering of Common Stock
by TCP registered pursuant to the Securities Act.
"Person": An individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, and a government entity or any
department, agency, or political subdivision thereof.
"Piggyback Registration": See SECTION 3.0(a).
"Registrable Securities": The 50,001 shares of Common Stock to be
received by Investor pursuant to the Investment Agreement and any other
shares of Common Stock acquired by Investor after the date hereof, including
without limitation, any additional shares of Common Stock received by
Investor pursuant to the terms of the Investment Agreement and pursuant to
the terms of the Employment Agreement.
"Registration Expenses": See SECTION 6.0.
"Restricted Securities": The Registrable Securities, subject to the
provisions of SECTION 2.0(a).
"SEC": The United States Securities and Exchange Commission.
"▇▇▇▇▇▇ Agreement": That certain Registration Rights Agreement dated as
of December 16, 1993 between TCP and ▇.▇. ▇▇▇▇▇▇.
"Securities Act": The Securities Act of 1933, as amended from time to
time.
"Underwritten registration or underwritten offering": A registration in
which securities of TCP are sold pursuant to a firm commitment underwriting.
SECTION 2.0. SECURITIES SUBJECT TO THIS AGREEMENT.
(a) REGISTRABLE SECURITIES. The securities entitled to the benefits of
this Agreement are those Registrable Securities that are Restricted
Securities. A Registrable Security ceases to be a Restricted Security when
(i) it is registered under the Securities Act and disposed of in accordance
with the registration statement covering it, or (ii) it is sold or
transferred in accordance with the requirements of Rule 144 (or similar
provisions then in effect) promulgated by the SEC under the Securities Act
("Rule 144").
(b) HOLDERS OF REGISTRABLE SECURITIES. A Person is deemed to be a
holder of Registrable Securities whenever that Person owns, directly or
beneficially, or has the right to acquire Registrable Securities,
disregarding any legal restrictions upon the exercise of that right.
SECTION 3.0. PIGGYBACK REGISTRATIONS.
(a) RIGHT TO PIGGYBACK. If at any time after the second year anniversary
of the date hereof, TCP proposes to register any of its securities under the
Securities Act (except for the registration of securities on Form S-4 or to be
offered pursuant to an employee benefit plan on Form S-8 or any successor forms
then in effect) (a "Piggyback Registration"), it will so notify in writing all
holders of Registrable Securities not later than the earlier to occur of (i) the
5th day following TCP's receipt of notice of exercise of demand registration
rights, or (ii) 30 days prior to the anticipated filing date. Subject to the
provisions of SECTIONS 3.0(b) and the terms and provisions of the ▇▇▇▇▇▇
Agreement, TCP will include in the Piggyback Registration all Registrable
Securities with respect to which TCP
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has received written requests for inclusion within 15 business days after the
applicable holder's receipt of TCP's notice. The holders of Registrable
Securities may withdraw all or any part of the Registrable Securities from a
Piggyback Registration at any time before the printing of the preliminary
prospectus relating to the Piggyback Registration. All Persons whose
securities are included in the Piggyback Registration must sell their
securities on the same terms and conditions as apply to the securities being
issued and sold by TCP or, if TCP is not issuing and selling shares, the
person who initiated the Piggyback Registration.
(b) PRIORITY ON REGISTRATIONS. If a Piggyback Registration is an
underwritten registration on behalf of TCP and the managing underwriters give
TCP their written opinion that the total number or dollar amount of
securities requested to be included in the registration exceeds the number or
dollar amount of securities that can be sold, TCP will include the securities
in the registration in the following order of priority: first, all securities
TCP proposes to sell; second, up to the full number or dollar amount of
Registrable Securities requested to be included in the registration pursuant
to the terms of the ▇▇▇▇▇▇ Agreement (allocated pro rata among the holders of
Registrable Securities under the ▇▇▇▇▇▇ Agreement on the basis of the dollar
amount or number of Registrable Securities under the ▇▇▇▇▇▇ Agreement
requested to be included); third, up to the full number or dollar amount of
Registrable Securities requested to be included in the registration pursuant
to the terms of this Agreement (allocated pro rata among the holders of
Registrable Securities under this Agreement on the basis of the dollar amount
or number of Registrable Securities under this Agreement requested to be
included) and fourth, any other securities (provided they are of the same
class as the securities sold by TCP) requested to be included, allocated
among the holders of the securities in such proportions as TCP and those
holders may agree.
(c) SELECTION OF UNDERWRITERS. If any Piggyback Registration is an
underwritten offering, TCP will select the investment banker(s) and manager(s)
that will administer the offering and shall enter into a customary underwriting
agreement with the investment banker(s) and manager(s).
(d) OTHER REGISTRATIONS. TCP agrees that after filing a registration
statement with respect to Registrable Securities pursuant to this SECTION 3.0
that has not been withdrawn or abandoned, TCP will not register any of its
equity securities or securities convertible or exchangeable into or exercisable
for its equity securities under the Securities Act, whether on its own behalf or
at the request of any holder of those securities, until at least three months
has elapsed from the effective date of the previous registration. This three-
month hiatus does not apply to registrations of securities to be issued in
connection with employee benefit plans, to permit exercise or conversions of
previously issued options, warrants, or other convertible securities.
SECTION 4.0. HOLDBACK AGREEMENTS.
(a) RESTRICTIONS ON PUBLIC SALE BY SECURITIES HOLDERS. Each holder of
Registrable Securities agrees not to make any public sale or distribution of
equity securities of TCP (except as part of the underwritten registration),
including a sale pursuant to Rule 144 under the Securities Act, during the seven
days prior to and the 90 days after the effective date of any underwritten
registration
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of securities by TCP (or such longer period not to exceed 180 days as the
Underwriters may require) unless the managing underwriters agree otherwise.
(b) RESTRICTIONS ON PUBLIC SALE BY TCP AND OTHERS. TCP agrees not to
make any public sale or distribution of its equity securities, or any
securities convertible into or exchangeable or exercisable for its equity
securities, including a sale under Regulation D of the SEC or under any
exemption of the Securities Act (except as part of the underwritten
registration or pursuant to registrations on Form S-8 or Form S-4 or any
successor forms), during the seven days prior to and the 90 days after the
effective date of any underwritten registration of securities by TCP unless
the managing underwriters agree otherwise. TCP also agrees to use its
reasonable best efforts to cause each holder of its privately placed equity
securities, or any securities convertible into or exchangeable or exercisable
for its equity securities (other than Registrable Securities), purchased from
TCP at any time on or after the date of this Agreement to agree not to make
any public sale or distribution of those securities, including a sale
pursuant to Rule 144 (except as part of the underwritten registration, if
permitted), during the seven days prior to and the 90 days after the
effective date of the registration unless the managing underwriters agree
otherwise.
SECTION 5.0. REGISTRATION PROCEDURES.
(a) Whenever the holders of Registrable Securities request the
inclusion of any Registrable Securities in a registration statement to be
filed pursuant to this Agreement, TCP shall use its reasonable best efforts
to register and to permit the sale of the Registrable Securities in
accordance with the intended method of disposition. To carry out this
obligation, TCP shall:
(1) prepare and file with the SEC a registration statement on the
appropriate form and use its reasonable best efforts to cause the
registration statement to become effective. At least ten days before
filing a registration statement or prospectus or at least three business
days before filing any amendments or supplements thereto, TCP will furnish
to the counsel of the holders of a majority of the Registrable Securities
being registered copies of all documents proposed to be filed for that
counsel's review;
(2) notify immediately each seller of Registrable Securities of any
stop order threatened or issued by the SEC and take all actions reasonably
required to prevent the entry of a stop order or if entered to have it
rescinded or otherwise removed;
(3) prepare and file with the SEC such amendments and supplements to
the registration statement and the corresponding prospectus necessary to
keep the registration statement effective for 90 days or such shorter
period as may be required to sell all Registrable Securities covered by the
registration statement; and comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by the
registration statement during each period in accordance with the sellers'
intended methods of disposition as set forth in the registration statement;
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(4) furnish to each seller of the Registrable Securities a sufficient
number of copies of the registration statement, each amendment and
supplement thereto (in each case including all exhibits), the corresponding
prospectus (including each preliminary prospectus), and such other
documents as a seller may reasonably request to facilitate the disposition
of the seller's Registrable Securities;
(5) use its reasonable best efforts to register or qualify the
Registrable Securities under securities or blue sky laws of jurisdictions
in the United States of America as any seller reasonably requests and will
do any and all other acts and things that may be reasonably necessary or
advisable to enable the seller to consummate the disposition of the
seller's Registrable Securities as long as TCP is not required to qualify
to do business in connection with the registration or qualification;
(6) use its reasonable best efforts to cause the Registrable
Securities covered by the registration statement to be registered with or
approved by those governmental agencies or authorities necessary to enable
each seller to consummate the disposition of its Registrable Securities;
(7) notify each seller of Registrable Securities, at any time when a
prospectus is required to be delivered under the Securities Act, of any
event as a result of which the prospectus or any document incorporated
therein by reference contains an untrue statement of a material fact or
omits to state any material fact necessary to make the statements therein
not misleading, and will prepare a supplement or amendment to the
prospectus or any such document incorporated therein by reference so that
thereafter the prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(8) cause all registered Registrable Securities to be listed on each
securities exchange, if any, on which similar securities issued by TCP are
then listed;
(9) provide an institutional transfer agent and registrar and a CUSIP
number for all Registrable securities on or before the effective date of
the registration statement;
(10) enter into such customary agreements (including an underwriting
agreement in customary form) and take all other actions in connection with
those agreements as the holders of the Registrable Securities being
registered or the underwriters, if any, reasonably request to expedite or
facilitate the disposition of the Registrable Securities;
(11) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to
the registration statement, and any attorney, accountant, or other agent of
any seller or underwriter, all financial and other records, pertinent
corporate documents, and properties of TCP, and cause TCP's officers,
directors, and employees to supply all information reasonably requested by
any seller, underwriter, attorney, accountant, or agent in connection with
the registration statement;
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(12) obtain a "cold comfort" letter from TCP's independent public
accountants in customary form and covering those matters customarily
covered by "cold comfort" letters as the holders of the Registrable
securities being registered or the managing underwriters reasonably
request; and
(13) use its reasonable best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement complying
with the provisions of Section 11(a) of the Securities Act and covering the
period of at least twelve months, but not more than eighteen months,
beginning with the first month after the effective date of the Registration
Statement.
(b) From time to time, TCP may require each seller of Registrable
Securities subject to the registration to furnish to TCP information regarding
the distribution of the securities subject to the registration.
(c) Each holder of Registrable Securities agrees by acquisition of
those securities that, upon receipt of any notice from TCP of any event of
the kind described in SECTION 5.0(a)(7), the holder will discontinue
disposition of Registrable Securities until the holder receives copies of the
supplemented or amended prospectus contemplated by SECTION 5.0(a)(7). In
addition, if TCP requests, the holder will deliver to TCP (at TCP's expense)
all copies, other than permanent file copies then in the holder's possession,
of the prospectus covering the Registrable Securities current at the time of
receipt of the notice. If TCP gives any such notice, the time period
mentioned in SECTION 5.0(a)(3) shall be extended by the number of days
elapsing between the date of notice and the date that each seller receives
the copies of the supplemented or amended prospectus contemplated by SECTION
5.0(a)(3).
SECTION 6.0. REGISTRATION EXPENSES. All Registration Expenses
incident to TCP's performance of or compliance with this Agreement shall be
paid by TCP. As used in this Agreement, the term "Registration Expenses"
includes without limitation all registration filing fees, professional fees,
and other expenses of compliance with federal, state, and other securities
laws (including fees and disbursements of counsel for the underwriters in
connection with state or other securities law qualifications and
registrations); printing expenses, messenger, telephone, and delivery
expenses; fees and disbursements of counsel for TCP; fees and disbursements
of all independent certified public accountants (including the expenses of
any audit or "cold comfort" letters required by or incident to performance of
the obligations contemplated by this Agreement); fees and expenses of the
underwriters (excluding discounts and commissions but including liability
insurance if TCP so desires or if the underwriters so require); fees and
expenses of any special experts retained by TCP at the request of the
managing underwriters in connection with the registration; and fees and
expenses of other Persons retained by TCP. The term "Registration Expenses"
does not include any discounts and commissions of underwriters payable with
respect to the sale of shares of Registerable Securities, which expenses
shall be borne by the holder of shares of Registerable Securities sold.
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SECTION 7.0. INDEMNIFICATION.
(a) INDEMNIFICATION BY TCP. To the full extent permitted by law, TCP
agrees to indemnify each holder of Registrable Securities, its officers and
directors, and each Person who controls the holder (within the meaning of the
Securities Act and the Exchange Act) against all losses, claims, damages,
liabilities, and expenses caused by any untrue or allegedly untrue statement
of material fact contained in any registration statement, prospectus, or
preliminary prospectus or any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, except to the extent the untrue statement
or omission resulted from information that the holder furnished in writing to
TCP expressly for use therein or by the holder's failure to deliver a copy of
the registration statement or prospectus or any amendments or supplements
thereto to any purchaser after TCP has furnished the holder with a sufficient
number of copies of the relevant documents. In connection with a firm or
best efforts underwritten offering, to the extent required by the managing
underwriters, TCP will indemnify the underwriters, their officers and
directors, and each Person who controls the underwriters (within the meaning
of the Securities Act and the Exchange Act).
(b) INDEMNIFICATION BY HOLDERS OF SECURITIES. In connection with any
registration statement, each participating holder of Registrable Securities
will furnish to TCP in writing such information and affidavits as TCP
reasonably requests for use in connection with any registration statement or
prospectus and each holder agrees to indemnify, to the extent permitted by
law, TCP, its directors and officers, and each Person who controls TCP
(within the meaning of the Securities Act and the Exchange Act) against any
losses, claims, damages, liabilities, and expenses resulting from any untrue
or allegedly untrue statement of a 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
necessary to make the statements therein not misleading, but only to the
extent that the untrue statement or omission is contained in or omitted from
any information or affidavit the holder furnished in writing, or resulting
from the holder's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto to any purchaser after
TCP has furnished the holder with a sufficient number of copies of the
relevant documents.
(c) INDEMNIFICATION PROCEEDINGS. Any Person entitled to indemnification
under this Agreement will (1) give prompt notice to the indemnifying party of
any claim with respect to which it seeks indemnification and (2) unless in the
indemnified party's reasonable judgment a conflict of interest may exist between
the indemnified and indemnifying parties with respect to the claim, permit the
indemnifying party to assume the defense of the claim with counsel reasonably
satisfactory to the indemnified party. If the indemnifying party does not
assume the defense, the indemnifying party will not be liable for any settlement
made without its consent (but that consent may not be unreasonably withheld).
No indemnifying party will consent to entry of any judgment or will enter into
any settlement that does not include as an unconditional term the claimant's or
plaintiff's release of the indemnified party from all liability concerning the
claim or litigation. 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 the
indemnifying party with respect to the claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may
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exist between the indemnified party and any other indemnified party with
respect to the claim, in which event the indemnifying party shall be
obligated to pay the fees and expenses of additional counsel.
SECTION 8.0. RULE 144 AND RULE 144A. If TCP files a registration
statement pursuant to the requirements of the Securities Act or Section 12 of
the Exchange Act, TCP covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder (or, if TCP is not required to file
such reports, it will, upon the request of any holder of Registrable
Securities, make publicly available other information), and it will take such
further action as any holder of Registrable Securities reasonably may
request, all to the extent required from time to time, to enable the holder
to sell Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act as amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of any holder of
Registrable Securities, TCP will deliver to the holder a written statement as
to whether it has complied with the Rule 144 or any successor rule
requirements. TCP also covenants that it will provide all such information
and it will take such further action as any holder of Registrable Securities
reasonably may request to enable the holder to sell Registrable Securities
without registration under the Securities Act within the limitation of Rule
144A under the Securities Act, as amended from time to time, or any successor
rule requirements.
SECTION 9.0. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any underwritten registration without (a) agreeing to sell
securities on the basis provided in any properly approved underwriting
arrangements and (b) completing and executing all questionnaires, powers of
attorney, indemnities, underwriting agreements, and other documents required by
the underwriting arrangements.
SECTION 10.0. MISCELLANEOUS.
(a) ADJUSTMENTS AFFECTING SECURITIES. TCP will not take any action, or
permit any change to occur, with respect to the Registrable Securities that
would affect adversely the ability of the holders to include those securities in
a registration undertaken pursuant to this Agreement or the marketability of the
Registrable Securities in any registration.
(b) AMENDMENT. This Agreement may be amended or modified only by a
written agreement executed by TCP and the holders of a majority of the
Registrable Securities then issued and outstanding.
(c) ATTORNEYS' FEES. In any legal action or proceeding brought to enforce
any provision of this Agreement, the prevailing party shall be entitled to
recover all reasonable expenses, charges, court costs, and attorneys' fees in
addition to any other available remedy at law or in equity.
(d) BENEFIT OF PARTIES; ASSIGNMENT. All of the terms and provisions of
this Agreement shall be binding on and inure to the benefit of the parties and
their respective successors and assigns, including without limitation all
subsequent holders of securities entitled to the benefits of this
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Agreement provided, however, TCP may not transfer or assign its rights or
obligations under this Agreement.
(e) CAPTIONS. The captions of the sections and subsections of this
Agreement are solely for convenient reference and shall not be deemed to affect
the meaning or interpretation of any provision of this Agreement.
(f) COOPERATION. The parties agree that after execution of this Agreement
they will from time to time, upon the request of any other party and without
further consideration, execute, acknowledge, and deliver in proper form any
further instruments and take such other action as any other party may reasonably
require to carry out effectively the intent of this Agreement.
(g) COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
(h) ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties with respect to the subject matter of this Agreement. There are no
promises, covenants, or undertakings other than those expressly set forth or
provided for in this Agreement.
(i) NO INCONSISTENT AGREEMENTS. Except with the prior written consent of
the holders of a majority of the Registrable Securities then issued and
outstanding, TCP will not enter into any agreement with respect to its
securities that shall grant to any Person registration rights that are senior
to, are in conflict with, or will interfere with the practical realization of
the rights provided under this Agreement.
(j) NOTICES. All notices, requests, demands, or other communications that
are required or may be given pursuant to the terms of this Agreement shall be in
writing and delivery shall be deemed sufficient in all respects and to have been
duly given on the date of service if delivered personally to the party to whom
notice is to be given, or on the third day after mailing if mailed by first
class mail - return receipt requested, postage prepaid, and properly addressed
to the addresses set forth in the Investment Agreement or to such other
addresses as the respective parties hereto shall from time to time designate to
the other(s) in writing.
(k) SPECIFIC PERFORMANCE. Each of the parties agrees that damages for a
breach of or default under this Agreement would be inadequate and that in
addition to all other remedies available at law or in equity the parties and
their successors and assigns shall be entitled to specific performance or
injunctive relief, or both, in the event of a breach or a threatened breach of
this Agreement.
(l) VALIDITY OF PROVISIONS. Should any part of this Agreement for any
reason be declared by any court of competent jurisdiction to be invalid, that
decision shall, not affect the validity of the remaining portion, which shall
continue in full force and effect as if this Agreement had been executed with
the invalid portion eliminated, it being the intent of the parties that they
would have executed
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the remaining portion of the Agreement without including any part or portion
that may for any reason be declared invalid.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first written above.
TOTAL CONTROL PRODUCTS, INC.
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
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Title: President
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/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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