REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of ,
1996, by and between Apollo International of Delaware, Inc., a Delaware
corporation (the "Company"), and the person whose name appears on the signature
page attached hereto (individually a "Holder", and together with the holders of
other Units issued in the private placement offering hereinafter described, the
"Holders").
WHEREAS, pursuant to a Confidential Private Placement Memorandum dated June
25, 1996 (the "Confidential Memorandum") and a subscription agreement annexed as
an exhibit thereto (the "Subscription Agreement"), the Company is offering (the
"Offering") a minimum of 25 units (the "Minimum Offering") and a maximum of 50
units (the "Maximum Offering") (the "Units"), each Unit consisting of (i) 10,000
shares of the Company's Common Stock, $.01 par value per share (the "Shares"),
and (ii) Common Stock Purchase Warrants (the "Warrants") exercisable to purchase
up to 5,000 shares of Common Stock at a purchase price of $5.50 per share (the
"Warrant Shares"), such Offering being exempt from the registration requirements
of the Securities Act of 1933, as amended (the "1933 Act") ;
WHEREAS, pursuant to the terms of and in order to induce the Holders to
enter into the Subscription Agreement to purchase the Units, the Company and the
Holders have agreed to enter into this Agreement;
WHEREAS, it is intended by the Company and the Holders that this Agreement
shall become effective immediately upon the acquisition by the Holder of the
Unit(s);
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and in the Subscription Agreement, the Company hereby agrees as
follows:
REGISTRATION RIGHTS.
1. REGISTRATION RIGHTS
a. "PIGGYBACK REGISTRATION". If the Company at any time proposes to
register any of its Common Stock under the 1933 Act (other than in connection
with a merger or pursuant to Form S-8 or other comparable form), the Company
shall request that the managing underwriter (if any) of such underwritten
offering include the Shares, and if warrants are being offered in the
1
public offering, the Warrants, and the Warrant Shares (together with the Shares
and Warrants, the "Registrable Securities") in such registration. If such
managing underwriter agrees to include the Registrable Securities in the
underwritten offering, the Company shall at such time give prompt written notice
to all Holders of its intention to effect such registration and of such Holders'
rights under such proposed registration, and upon the request of any such Holder
delivered to the Company within twenty (20) days after giving such notice (which
request shall specify the Registrable Securities intended to be disposed of by
such Holder and the intended method of disposition thereof), the Company shall
include such Registrable Securities held by such Holder requested to be included
in such registration; provided, however, that:
(i) If, at any time after giving such written notice of the Company's
intention to register any of the Holders' Registrable Securities and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay the registration of such Registrable Securities, at its sole election, the
Company may give written notice of such determination to each Holder and
thereupon shall be relieved of its obligation to register any Registrable
Securities issued or issuable in connection with such registration (but not from
its obligation to pay registration expenses in connection therewith or to
register the Registrable Securities in a subsequent registration); and in the
case of a determination to delay a registration shall thereupon be permitted to
delay registering any Registrable Securities for the same period as the delay in
respect of securities being registered for the Company's own account.
(ii) If the managing underwriter in such underwritten offering shall
advise the Company that it declines to include a portion or all of the
Registrable Securities requested by the Holders to be included in the
registration statement, then distribution of all or a specified portion of the
Registrable Securities shall be excluded from such registration statement (in
case of an exclusion as to a portion of the Registrable Securities, such portion
to be excluded shall be allocated among such holders and any affiliates of the
Company including securities to be registered in such underwritten offering in
proportion to the respective number of Registrable Securities and other
securities requested to be registered by each such Holder and affiliate). In
such event the Company shall give the applicable Holders prompt notice of the
number of Registrable Securities excluded from such registration at the request
of the managing underwriter. No such exclusion shall reduce the securities
being offered by the Company for its own account to be included in such
registration statement.
2
(b) OPTION TO INCLUDE REGISTRABLE SECURITIES IN OFFERING. The
Holders, subject to the provisions of Section 1, shall have the option to
include their Registrable Securities in the Company's underwritten offering.
The Company shall not be required to include any of the Holders' Registrable
Securities in an underwritten offering of the Company's securities unless such
Holders accept the terms of the underwriting as agreed upon between the Company
and the underwriters selected by it (provided such terms are usual and customary
for selling stockholders) and the Holders agree to execute and/or deliver such
documents in connection with such registration as the Company or the managing
underwriter may reasonably request.
(c) MANDATORY REGISTRATION. In the event the Holders have not had
their Registrable Securities included in a registration statement pursuant to
Section 1(a), the Company shall use its best efforts to effect the registration
of all remaining Registrable Securities as soon as practicable, but not later
than 180 days after the effective date of such registration statement; provided,
however, that such period may be extended or delayed by the Company for one
period of up to 90 days if, upon the advice of counsel at the time such
registration is required to be filed, or at the time the Company is required to
exercise its best efforts to cause such registration statement to become
effective, such delay is advisable and in the best interests of the Company
because of the existence of non-public material information, or to allow the
Company to complete any pending audit of its financial statements, without
requiring the Company to perform any audit not otherwise necessary.
(d) COOPERATION WITH COMPANY. The Holder will cooperate with the
Company in all respects in connection with this Agreement, including, timely
supplying all information reasonably requested by the Company and executing and
returning all documents reasonably requested in connection with the registration
and sale of the Registrable Securities.
2. REGISTRATION PROCEDURES. If and whenever the Company is required by
any of the provisions of this Agreement to use its best efforts to effect the
registration of any of the Registrable Securities under the 1933 Act, the
Company shall (except as otherwise provided in this Agreement), as expeditiously
as possible:
(a) prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement and shall use its best efforts to cause
such registration statement to become effective and remain effective until all
the Registrable Securities are sold or become capable of being publicly sold
without registration under the 1933 Act.
3
(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 and
to comply with the provisions of the 1933 Act with respect to the sale or other
disposition of all securities covered by such registration statement whenever
the Holders of more than 50% of the Registrable Securities referred to in
paragraph 1(c) above shall desire to sell or otherwise dispose of the same
(including prospectus supplements with respect to the sales of securities or the
exercise of Warrants from time to time in connection with a registration
statement pursuant to Rule 415 of the Commission);
(c) furnish to the Holders such numbers of copies of a summary
prospectus or other prospectus, including a preliminary prospectus or any
amendment or supplement to any prospectus, in conformity with the requirements
of the 1933 Act, and such other documents, as the Holder may reasonably request
in order to facilitate the public sale or other disposition of the securities
owned by the Holder;
(d) use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as the Holders shall reasonably request, and do any
and all other acts and things which may be necessary or advisable to enable such
Holder to consummate the public sale or other disposition in such jurisdictions
of the securities owned by such Holders, except that the Company shall not for
any such purpose be required to qualify to do business as a foreign corporation
in any jurisdiction wherein it is not so qualified or to file therein any
general consent to service of process or to be subject to any escrow or other
similar conditions;
(e) use its best efforts to list such securities on any securities
exchange on which any securities of the Company is then listed, if the listing
of such securities is then permitted under the rules of such exchange;
(f) enter into and perform its obligations under an underwriting
agreement, if the offering is an underwritten offering, in usual and customary
form, with the managing underwriter or underwriters of such underwritten
offering;
(g) notify the Holders of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto covered
by such registration statement is required to be delivered under the 1933 Act,
of the happening of any event of which it has knowledge as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or
4
necessary to make the statements therein not misleading in the light of the
circumstances then existing; and
(h) furnish, at the request of the Holders on the date such
Registrable Securities are delivered to the underwriters for sale pursuant to
such registration or, if such Registrable Securities are not being sold through
underwriters, on the date the registration statement with respect to such
Registrable Securities becomes effective, (i) an opinion, dated such date, of
the counsel representing the Company for the purpose of such registration,
addressed to the underwriters, if any, and to the Holder making such request,
covering such legal matters with respect to the registration in respect of which
such opinion is being given as the Holder of such Registrable Securities may
reasonably request and are customarily included in such an opinion and (ii)
letters, dated, respectively, (1) the effective date of the registration
statement and (2) the date such Registrable Securities are delivered to the
underwriters, if any, for sale pursuant to such registration, from a firm of
independent certified public accountants of recognized standing selected by the
Company, addressed to the underwriters, if any, and to the Holder making such
request, covering such financial, statistical and accounting matters with
respect to the registration in respect of which such letters are being given as
the Holder of such Registrable Securities may reasonably request and are
customarily included in such letters; and
(i) take such other actions as shall be reasonably requested by any
Holders to facilitate the registration and sale of the Registrable Securities;
provided, however, that the Company shall not be obligated to take any actions
not specifically required elsewhere herein which in the aggregate would cost in
excess of $2,000.
3. RESTRICTIONS ON TRANSFER OF REGISTRABLE SECURITIES. The Holder agrees
that he will not sell or transfer any of the Registrable Securities for a period
of thirteen (13) months from the effective date (the "Effective Date") of the
registration statement pursuant to which its Registrable Securities have been
registered in an offering (i) without the prior written consent of the Placement
Agent if the Placement Agent is a member firm of the National Association of
Securities Dealers, Inc. (the "NASD") or another self-regulatory organization at
the time of the Effective Date, or (ii) without the prior written consent of the
underwriter of such offering if the Placement Agent is not a member firm of the
NASD or another self-regulatory organization at the time of the Effective Date.
4. EXPENSES. All expenses incurred in any registration of the Holder's
Registrable Securities under this Agreement shall be paid by the Company,
including, without limitation, printing expenses, fees and disbursements of
counsel for the Company,
5
expenses of any audits to which the Company shall agree or which shall be
necessary to comply with governmental requirements in connection with any such
registration, all registration and filing fees for the Holders' Registrable
Securities under federal and State securities laws, and expenses of complying
with the securities or blue sky laws of any jurisdictions pursuant to Section
2(d); provided, however, the Company shall not be liable for (a) any discounts
or commissions to any underwriter; (b) any stock transfer taxes incurred with
respect to Registrable Securities sold in the Offering or (c) the fees and
expenses of counsel for any Holder, provided that the Company will pay the costs
and expenses of Company counsel when the Company's counsel is representing any
or all selling security holders.
5. INDEMNIFICATION. In the event any Registrable Securities are included
in a registration statement pursuant to this Agreement:
(a) COMPANY INDEMNITY. Without limitation of any other indemnity
provided to any Holder, either in connection with the Offering or otherwise, to
the extent permitted by law, the Company shall indemnify and hold harmless each
Holder, the affiliates, officers, directors and partners of each Holder, any
underwriter (as defined in the ▇▇▇▇ ▇▇▇) for such Holder, and each person, if
any, who controls such Holder or underwriter (within the meaning of the 1933 Act
or the Securities Exchange Act of 1934 (the "Exchange Act"), against any losses,
claims, damages or liabilities (joint or several) to which they may become
subject under the 1933 Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "VIOLATION"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statements including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, (iii) any violation or alleged violation
by the Company of the 1933 Act, the Exchange Act, or any state securities law or
any rule or regulation promulgated under the 1933 Act, the Exchange Act or any
state securities law, and in each case, the Company shall reimburse the Holder,
affiliate, officer or director or partner, underwriter or controlling person for
any legal or other expenses incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that the Company shall not be liable to any Holder in any such case for
any such loss, claim, damage, liability or action to the extent that it arises
out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in
6
connection with such registration by the Holder or any other officer, director
or controlling person thereof.
(b) HOLDER INDEMNITY. The Holder shall indemnify and hold harmless
the Company, its affiliates, its counsel, officers, directors, shareholders and
representatives, any underwriter (as defined in the ▇▇▇▇ ▇▇▇) and each person,
if any, who controls the Company or the underwriter (within the meaning of the
1933 Act or the Exchange Act), against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the 1933
Act, the Exchange Act or any state securities law, and the Holder shall
reimburse the Company, affiliate, officer or director or partner, underwriter or
controlling person for any legal or other expenses incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any statements or
information provided by such Holder to the Company in connection with the offer
or sale of Registrable Securities.
(c) NOTICE; RIGHT TO DEFEND. Promptly after receipt by an
indemnified party under this Section 5 of notice of the commencement of any
action (including any governmental action), such indemnified party shall, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 5, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in and if the indemnifying party agrees in writing that it will be
responsible for any costs, expenses, judgments, damages and losses incurred by
the indemnified party with respect to such claim, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the fees and expenses
to be paid by the indemnifying party, if the indemnified party reasonably
believes that representation of such indemnified party by the counsel retained
by the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action shall relieve such indemnifying party of any liability to the
indemnified party under this Agreement only if and to the extent that such
failure is prejudicial to its ability to defend such action, and the omission so
to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Agreement. There can be no settlement without the indemnifying party's prior
consent.
7
(d) CONTRIBUTION. If the indemnification provided for in this
Agreement is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
hand in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relevant fault of the indemnifying party and the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Notwithstanding the foregoing, the amount the Holder
shall be obligated to contribute pursuant to the Agreement shall be limited to
an amount equal to the proceeds to the Holder of the Registrable Securities sold
pursuant to the registration statement which gives rise to such obligation to
contribute (less the aggregate amount of any damages which the Holder has
otherwise been required to pay in respect of such loss, claim, damage, liability
or action or any substantially similar loss, claim, damage, liability or action
arising from the sale of such Registrable Securities).
(e) SURVIVAL OF INDEMNITY. The indemnification provided by this
Agreement shall be a continuing right to indemnification and shall survive the
registration and sale of any Registrable Securities by any person entitled to
indemnification hereunder and the expiration or termination of this Agreement.
6. ASSIGNMENT OF REGISTRATION RIGHTS. The rights of the Holder under
this Agreement, including the rights to cause the Company to register
Registrable Securities may not be assigned without the written prior consent of
the Company.
7. LIMITATIONS ON OTHER REGISTRATION RIGHTS. Except as otherwise set
forth in this Agreement, the Company shall not, without the prior written
consent of the Holder of Registrable Securities, file any registration statement
filed on behalf of any person (including the Company) other than the Holder to
become effective during any period when the Company is not in compliance with
this Agreement.
8
8. REMEDIES.
(a) TIME IS OF THE ESSENCE. The Company agrees that time is of the
essence of each of the covenants contained herein and that, in the event of a
dispute hereunder, this Agreement is to be interpreted and construed in a manner
that will enable the Holder to sell its Registrable Securities as quickly as
possible after such Holders have indicated to the Company that they desire their
Registrable Securities to be registered. Any delay on the part of the Company
not expressly permitted under this Agreement, whether material or not, shall be
deemed a material breach of this Agreement.
(b) REMEDIES UPON DEFAULT OR DELAY. The Company acknowledges the
breach of any part of this Agreement may cause irreparable harm to the Holder
and that monetary damages alone may be inadequate. The Company therefore agrees
that the Holder shall be entitled to injunctive relief or such other applicable
remedy as a court of competent jurisdiction may provide. Nothing contained
herein will be construed to limit a Holder's right to any remedies at law,
including recovery of damages for breach of any part of this Agreement.
9. NOTICES.
(a) All communications under this Agreement shall be in writing and
shall be mailed by first class mail, postage prepaid, or telegraphed or telexed
with confirmation of receipt or delivered by hand or by overnight delivery
service,
i. If to the Company, at:
Apollo International of Delaware, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
or at such other address as it may have furnished in writing to the Holder of
Registrable Securities at the time outstanding, or
ii. if to the Holder of any Registrable Securities, to the address of
such Holder as it appears in the stock ledger of the Company.
(b) Any notice so addressed, when mailed by registered or certified
mail shall be deemed to be given three days after so mailed, when telegraphed or
telexed shall be deemed to be given when transmitted, or when delivered by hand
or overnight shall be deemed to be given when delivered.
9
10. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, this Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of the Company and the Holder.
11. AMENDMENT AND WAIVER. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, but only with the
written consent of the Company and the Holder; provided, however, that no such
amendment or waiver shall take away any registration right of the Holder of
Registrable Securities or reduce the amount of reimbursable costs to the Holder
of Registrable Securities in connection with any registration hereunder without
the consent of the Holder. No delay on the part of any party in the exercise of
any right, power or remedy shall operate as a waiver thereof, nor shall any
single or partial exercise by any party of any right, power or remedy preclude
any other or further exercise thereof, or the exercise of any other right, power
or remedy.
12. COUNTERPARTS. One or more counterparts of this Agreement may be
signed by the parties, each of which shall be an original but all of which
together shall constitute one and the same instrument.
13. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the internal laws of the State of New York, without giving
effect to conflicts of law principles.
14. INVALIDITY OF PROVISIONS. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected thereby.
15. HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.
10
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
APOLLO INTERNATIONAL OF DELAWARE, INC.
-------------------------
Signature of Holder
By:
----------------------------- -------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Print Name of Holder
President and Chief Executive
Officer
-------------------------
-------------------------
Print Address of Holder
11