EXHIBIT 10.8
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This Amended and Restated Registration Rights Agreement is made as of
August 27, 1999 (the "Effective Date"), by and among DPEC, INC., an Ohio
corporation (the "Company"), and RIVER CITIES CAPITAL FUND II LIMITED
PARTNERSHIP, a Delaware limited partnership ("River Cities"), JG FUNDING, LLC, a
Kentucky limited liability company ("JG"), ▇▇▇▇▇▇▇▇ CAPITAL GROUP, LLC, a
Kentucky limited liability company ("▇▇▇▇▇▇▇▇"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, an
individual ("▇▇▇▇▇▇") River Cities, JG, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ are hereinafter
sometimes referred to individually as an "Investor" and collectively as the
"Investors").
W I T N E S S E T H:
WHEREAS, the Company has issued to the Investors shares of Series B
Convertible Preferred Stock, no par value per share of the Company (the "Series
B Preferred Stock"), and/or shares of Senior Convertible Preferred Stock, no par
value of the Company (the "Senior Convertible Preferred Stock", which, together
with the Series B Preferred Stock, is hereinafter called the "Preferred Stock");
WHEREAS, the parties to this Agreement also are parties to that certain
Series B Convertible Preferred Stock Purchase Agreement (the "Purchase
Agreement") of even date herewith;
WHEREAS, the Investors were unwilling to acquire the Preferred Stock
(i) without assurances of an ability to dispose publicly of the shares of the
Company's common stock ("Common Stock") into which the Preferred Stock is
convertible and (ii) without certain other assurances as provided herein;
WHEREAS, the Company is willing to make such assurances; and
WHEREAS, the Company and River Cities (by way of assignment from River
Cities Capital Group II Limited Partnership) are parties to that certain
Registration Rights Agreement dated September 15, 1998 (the "Original
Registration Rights Agreement");
NOW, THEREFORE, in consideration of the recitals, the mutual covenants
and agreements herein contained and the issuance and purchase of the Preferred
Stock, the parties hereto, intending to be legally bound, do hereby covenant and
agree as follows:
1. REGISTRATION OF SECURITIES.
1.1 REGISTRATION BY THE COMPANY. If at any time or from time
to time the Company proposes to file on its behalf a registration statement
under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to its Common Stock, other than
a registration that has been initiated at the request of the holders of
Registrable Securities (as defined below) pursuant to Section 1.2 or that has
been initiated at the request of the holders of securities (other than
Registrable Securities) of the Company who have been granted registration rights
by the Company which are similar to the rights set forth in Section 1.2, the
Company shall in each case give written notice at least thirty (30) days before
the anticipated filing date to the Investors and each other holder of shares of
Preferred Stock or of shares of Common Stock previously acquired by the
conversion of Preferred Stock ("Registrable Securities"). The notice shall offer
to include in the filing, subject to reduction as provided below, the number of
Registrable Securities held by such holder. If a holder desires to have any of
its Registrable Securities registered under this Section 1.1, it shall advise
the Company in writing within ten (10) days after receiving the Company's
notice, setting forth the number of Registrable Securities for which
registration is requested. In connection with any registration of any of the
Registrable Securities pursuant to this Section 1.1, the Company shall pay all
expenses of the registration and the related offering, including, without
limitation, any and all special audits, legal and accounting fees and
disbursements (including reasonable fees and disbursements of one legal counsel
designated to represent all holders of Registrable Securities and selected by
the holders of a majority of the Registrable Securities being registered), blue
sky fees and expenses, printing costs and related disbursements arising out of
the preparation, filing, amending and supplementing of the registration
statement, but not including brokers' and underwriters' discounts and
commissions which shall be paid by the holders of the Registrable Securities
being registered. Neither the delivery of the notice by the Company nor the
request by the holders of Registrable Securities shall in any way obligate the
Company to file a registration statement and, notwithstanding such filing, the
Company may, at any time prior to the effective date thereof, determine not to
offer the securities to which the registration statement relates without
liability to any holder of Registrable Securities. No registration of any of the
Registrable Securities effected under this Section 1.1 shall relieve the Company
of its obligation to effect registration of any of the Registrable Securities
upon the request of a holder pursuant to the provisions of Section 1.2 below.
If the managing underwriter of an underwritten registration under this
Section 1.1 gives the Company its written opinion that the total number of
securities proposed or requested to be included in the registration exceeds the
number of securities that can be sold without adversely affecting the marketing
of the securities, the Company shall be entitled to limit the number of
securities to be included in the registration and shall include the securities
in the registration in the following order of priority: first, all securities
the Company proposes to sell; second, to the extent of any balance, up to the
full number of securities requested to be included in the registration by the
holders of Registrable Securities and by other holders of the Company's
securities who have been granted registration rights by the Company (allocated
pro rata among each such holder on the basis of the number of such securities
owned by all such holders); and third, to the extent of any balance but only if
permitted by the Company, up to the full number of any other securities
requested to be included by other holders of securities (allocated among such
holders in such proportions as the Company and such holders may agree). In the
event that the managing underwriter advises the Company that an underwriters'
overallotment option is necessary or advisable, the preceding priority shall
apply to the determination of which securities
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are to be included in the primary portion of such registration and, if
necessary, the overallotment portion of such registration.
1.2 REGISTRATION AT THE HOLDERS' REQUEST. At any time after
the earlier of (i) an initial public offering of the Common Stock or (ii)
September 14, 2003, the holders of a majority of the Registrable Securities may
request in writing that the Company effect the registration under the Securities
Act of any of the holders' shares of Registrable Securities. The request shall
specify the intended method or methods of disposition of such Registrable
Securities (including, if the proposed offering is to be an underwritten
offering, the managing underwriter or underwriters thereof which underwriter
shall be acceptable to the Company). Upon receiving the request of the holders
of the Registrable Securities, the Company shall promptly notify any other
holders of Registrable Securities of the request and shall permit such holders
to request that their Registrable Securities also be included in such
registration. If such a holder desires to have any of its Registrable Securities
registered under this Section 1.2, it shall advise the Company in writing within
ten (10) days after receiving the Company's notice, setting forth the number of
Registrable Securities for which registration is requested. Thereafter, the
Company shall expeditiously prepare and file a registration statement with
respect to, and use its best efforts to effect the registration under the
Securities Act of, the Registrable Securities specified in the holders' request;
provided, however, that, (i) in the case of any registration pursuant to this
Section 1.2 which is an underwritten offering, the Company shall have the right
to postpone such registration for up to sixty (60) days on the advice of the
managing underwriter thereof; and (ii) no more than two registrations pursuant
to this Section 1.2 will be effected by the Company.
If at any time the holders of a majority of the Registrable Securities
request registration of any of their Registrable Securities pursuant to this
Section 1.2, the Company shall have the option, exercisable within ten (10) days
of the date of the holders' request, to purchase the Registrable Securities
requested to be registered at the average closing sale price of the Common
Stock, as reported on the applicable exchange or other market on which the
Common Stock is traded or quoted, during the period from the date of the request
through the date the Company exercises its option to purchase; provided,
however, that if the Common Stock is not traded or quoted on an exchange or
other market, the purchase price shall be the fair market value of the
Registrable Securities as determined in accordance with the provisions of
paragraph (B)(5) of Article FOURTH of the Company's Articles of Incorporation,
as amended. The Company shall pay to such holders the purchase price for the
Registrable Securities and the holders shall tender to the Company
certificate(s) representing the Registrable Securities sold, within sixty (60)
days of the exercise of the option.
Any registration of Registrable Securities requested by the holders
pursuant to the provisions of this Section 1.2 which, for any reason (other than
by reason of the fault of the Company) shall not become effective within ninety
(90) days after its filing with the Commission, may be terminated by the
Company. Any such registration which is so terminated by the Company shall,
nonetheless, be deemed to be a registration under this Section.
In connection with the registration of the Registrable Securities
pursuant to this Section 1.2, the Company shall pay all expenses of such
registration and the related offering, including,
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without limitation, any and all special audits, legal and accounting fees and
disbursements (including fees and disbursements of legal counsel designated to
represent all holders of the Registrable Securities and selected by the holders
of a majority of the Registrable Securities being registered), blue sky fees and
expenses, printing costs and related disbursements arising out of the
preparation, filing, amending and supplementing of the registration statement,
except for broker's and underwriter's discounts and commissions which shall be
paid by the holders of the Registrable Securities being registered.
If the managing underwriter of an underwritten registration under this
Section 1.2 gives the Company its written opinion that the total number of
securities proposed or requested to be included in the registration exceeds the
number of securities that can be sold without adversely affecting the marketing
of the securities, the Company shall be entitled to limit the number of
securities to be included in the registration and shall include the securities
in the registration in the following order of priority: first, all Registrable
Securities requested to be included in the registration by the holders thereof;
second, to the extent of any balance, up to the full number of securities the
Company proposes to sell; third, to the extent of any balance, up to the full
number of other securities requested to be included in the registration by the
holders of the Company's securities who have been granted registration rights by
the Company (allocated pro rata among each such holder on the basis of the
number of such securities owned by all such holders); and fourth, to the extent
of any balance but only if permitted by the Company, up to the full number of
any other securities requested to be included by other holders of securities
(allocated among such holders in such proportions as the Company and such
holders may agree). In the event that the managing underwriter advises the
Company that an underwriters' overallotment option is necessary or advisable,
the preceding priority shall apply to the determination of which securities are
to be included in the primary portion of such registration and, if necessary,
the overallotment portion of such registration.
Anything in this Section 1.2 to the contrary notwithstanding, if the
Registrable Securities are included in any registration of any securities for
sale by or on behalf of the Company, such registration shall not be deemed to be
a registration for the purpose of this Section 1.2 but shall be deemed to be a
registration pursuant to the provisions of Section 1.1 hereof; provided,
however, that this paragraph shall not entitle the holders of Registrable
Securities to more than two registrations pursuant to Section 1.2.
1.3 REGISTRATION GENERALLY. If and when the Company shall be
required by the provisions of this Section 1 to effect the registration of
Registrable Securities under the Securities Act, the Company shall, as
expeditiously as possible:
1.3.1 prepare and file a registration statement under
the Securities Act on Form ▇-▇, ▇-▇ or S-3 (or on any other form for the general
registration of securities) with respect to the Registrable Securities being
registered, and use its best efforts to cause the registration statement to
become effective; provided, however, that before filing the registration
statement and any amendment or supplement thereto, the Company shall furnish to
the holders of the Registrable Securities being registered or, if requested by
such holders, to counsel selected by such holders, copies of all documents
proposed to be filed, which documents shall be subject to
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the review and approval of such counsel, which approval shall not be
unreasonably withheld or delayed;
1.3.2 prepare and file with the Securities and
Exchange Commission (the "Commission") such amendments and supplements to the
registration statement and the prospectus used in connection therewith as may be
necessary to keep the registration statement effective for a period of one
hundred eighty (180) days from the effective date of the applicable registration
statement or such shorter period agreed upon by the Company and the holders of a
majority of the Registrable Securities being registered, and to comply with the
provisions of the Securities Act and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), with respect to the offer of the Registrable
Securities covered by the registration statement during the period required for
distribution of the Registrable Securities;
1.3.3 furnish to the holders of Registrable
Securities being registered such number of printed copies of the registration
statement and of each amendment and supplement thereto, the prospectus included
in the registration statement (including each preliminary prospectus and any
summary prospectus), the documents incorporated by reference in the registration
statement or prospectus and any other documents as such holders may reasonably
request in order to facilitate the disposition of the Registrable Securities
covered by the registration statement, in conformity with the requirements of
the Securities Act;
1.3.4 use its best efforts to register or qualify the
Registrable Securities covered by the registration statement under the
securities or blue sky laws in such jurisdictions within the United States as
the holders may reasonably request; provided however, that the Company shall not
be obligated to qualify its business in any jurisdiction where it is not then so
qualified or otherwise required to be so qualified or to take any action which
would subject it to the service of process in suits other than those arising out
of such registrations;
1.3.5 furnish to the holders of the Registrable
Securities being registered and, in the case of any registration pursuant to
Section 1.2 which is an underwritten offering, to the managing underwriter
thereof, a signed counterpart of customary closing documents including (A) an
opinion of counsel for the Company, dated the effective date of the registration
statement (or, in the case of any underwritten offering, the date of closing
with the underwriters) and (B) a so-called "cold comfort" letter signed by the
independent public accountants who have certified the Company's financial
statements included in the registration statement, covering substantially the
same matters with respect to the registration statement (and the prospectus
included therein) and, in the case of such accountants' letter, with respect to
events subsequent to the date of such financial statements, as are customarily
covered in accountants' letters delivered to underwriters in connection with
underwritten public offerings of securities;
1.3.6 immediately notify the holders of the
Registrable Securities being registered at any time when a prospectus relating
to the registration of the Registrable Securities is required to be delivered
under the Securities Act (except where circumstances requiring such deliveries
are within the knowledge or control of the holders) of the happening of any
event as a result of which the prospectus included in the registration
statement, as then in effect, includes an
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untrue statement of a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the circumstances
then existing, and at the request of any holder prepare and furnish to the
holder a reasonable number of copies of a supplement to or an amendment of the
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of the Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing;
1.3.7 otherwise use its best efforts to comply with
the Securities Act, Exchange Act and all applicable rules and regulations of the
Commission, and make available to its securities holders, as soon as reasonably
practicable, an earnings statement covering a period of at least twelve (12)
months, but not more than eighteen (18) months, beginning with the first month
of the first fiscal quarter after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act; and
1.3.8 use its best efforts to list the Registrable
Securities being registered on the securities exchange or securities association
on which the Common Stock is then listed, and to provide, if appropriate, a
transfer agent and registrar for the Registrable Securities not later than the
effective date of such registration statement.
If requested by the underwriters of any underwritten offering of the
Registrable Securities, the Company and the holders of the Registrable
Securities being registered shall enter into an underwriting agreement with the
underwriters of the offering, such agreement to contain such representations and
warranties by the Company and such holders and such other terms and provisions
as are customarily contained in underwriting agreements with respect to
secondary distributions, including, without limitation, indemnities to the
effect and to the extent provided in Section 1.5 hereof. If the Company at any
time proposes to register any of its securities under the Securities Act, other
than pursuant to a request made under Section 1.2 hereof, whether or not for
sale for its own account, and such securities are to be distributed by or
through one or more underwriters, the Company shall make reasonable efforts to
arrange for the underwriters to include the Registrable Securities among those
securities to be distributed by or through the underwriters.
If an underwritten registration of the Company has been initiated at
the request of the holders of securities (other than Registrable Securities) of
the Company who have been granted registration rights by the Company which are
similar to the rights set forth in Section 1.2 and if the managing underwriter
gives the Company its written opinion that the total number of securities
proposed or requested to be included in the registration exceeds the number of
securities that can be sold without adversely affecting the marketing of the
securities, the Company shall be entitled to limit the number of securities to
be included in the registration and shall include the securities in the
registration in the following order of priority: first, up to the sum of the
full number of securities requested to be included in the registration by the
holders who have requested the registration and the number of Registrable
Securities requested to be included in the registration by the holders thereof
(allocated pro rata among each such holder on
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the basis of the number of securities owned by all such holders); second, to the
extent of any balance, up to the full number of securities the Company proposes
to sell; and third, to the extent of any balance but only if permitted by the
Company, up to the full number of any other securities requested to be included
by other holders of securities (allocated among such holders in such proportions
as the Company and such holder may agree). In the event that the managing
underwriter advises the Company that an underwriter's overallotment option is
necessary or advisable, the preceding priority shall apply to the determination
of which securities are to be included in the primary portion of such
registration and, if necessary, the overallotment portion of such registration.
In connection with the preparation and filing of each registration
statement registering Registrable Securities under the Securities Act, the
Company shall give the holders of the Registrable Securities being registered
and their underwriter, if any, and their counsel and accountants the opportunity
to participate in the preparation of such registration statement, each
prospectus included therein or filed with the Commission, and each amendment
thereof or supplement thereto. The Company shall also give each of them such
access to its books and records and such opportunities to discuss the business
of the Company with its officers, its counsel and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of the holders of a majority of the Registrable Securities being
registered and the underwriter or counsel for such holders, to conduct a
reasonable investigation within the meaning of the Securities Act prior to the
effectiveness of the registration statement.
1.4 CONDITIONS TO REGISTRATION. The right of the holders to
have Registrable Securities included in any registration statement filed by the
Company in accordance with the provisions of this Section 1 shall be subject to
the following conditions:
1.4.1 the holders shall furnish the Company in a
timely manner with all information required by the applicable rules and
regulations of the Commission concerning the proposed method of sale or other
disposition of the Registrable Securities, the identity of and compensation to
be paid to any proposed underwriters to be employed in connection therewith, and
such other information as may be reasonably required by the Company to prepare
and file such registration statement in accordance with applicable provisions of
the Securities Act;
1.4.2 if the holders desire to sell and distribute
the Registrable Securities over a period of time, or from time to time, at then
prevailing market prices, then the holders shall execute and deliver to the
Company such written undertakings as the Company and its counsel may reasonably
require in order to assure full compliance with relevant provisions of the
Securities Act and the Exchange Act;
1.4.3 in the case of any underwritten offering on
behalf of the holders of Registrable Securities pursuant to the provisions of
Section 1.2 hereof, the managing underwriters shall be subject to the approval
of the Company, such approval not to be unreasonably withheld or delayed; and
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1.4.4 in the case of a filing involving Common Stock
which has not yet been acquired by the conversion of Preferred Stock, the holder
shall complete the conversion of its Preferred Stock into such Common Stock by
the effective date of the registration statement.
1.5 INDEMNIFICATION. In the event of the registration of any
of the Registrable Securities under the Securities Act pursuant to the
provisions hereof, the Company shall, to the extent permitted by law, indemnify
and hold harmless the holders of such Registrable Securities, their respective
partners, directors, officers, agents, and any underwriters, and each other
person, if any, who controls or is controlled by such holders or any such
underwriters within the meaning of the Securities Act (each such person being
hereinafter sometimes referred to as an "indemnified person"), against any
losses, claims, damages or liabilities, joint or several (collectively, the
"Losses"), to which such indemnified person may become subject under the
Securities Act or otherwise, insofar as such Losses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained or incorporated by reference in the
registration statement, any preliminary prospectus or final prospectus contained
therein (as they may be amended or supplemented), or any document incorporated
by reference therein, 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, in light of the circumstances under
which they were made, not misleading. The Company shall reimburse each
indemnified person for any legal or other expenses reasonably incurred by the
indemnified person (which shall be limited as provided in this Section 1.5) in
connection with investigating or defending any Losses. However, the Company
shall not be liable in any case to the extent that any Losses arise out of or
are based upon an untrue statement or alleged untrue statement or omission or
alleged omission made or incorporated by reference in the registration
statement, preliminary prospectus or final prospectus (as they may be amended or
supplemented) in reliance upon and in conformity with written information
furnished to the Company by an indemnified person specifically stating that it
is for use in preparation thereof or an indemnified person's failure to deliver
a copy of the registration statement or prospectus or any amendments or
supplements thereto to any purchaser. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the
indemnified person and shall survive the transfer of the Registrable Securities
by the holders.
In the event of the registration of any holder's Registrable Securities
under the Securities Act pursuant to the provisions hereof, the holder shall, to
the extent permitted by law, indemnify and hold harmless the Company, each
director of the Company, each officer of the Company who signs the registration
statement, each underwriter, broker and dealer, if any, who participates in the
offering and sale of the Registrable Securities and each other person, if any,
who controls or is controlled by the Company or any such underwriter, broker or
dealer within the meaning of the Securities Act, against any Losses to which the
Company, such director, officer, underwriter, broker or dealer or controlling or
controlled person may become subject under the Securities Act or otherwise,
insofar as such Losses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained or incorporated by reference in the registration statement, any
preliminary prospectus or final prospectus contained therein (as they may be
amended or supplemented), or any document incorporated by reference
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therein, 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, which untrue statement or alleged untrue
statement or omission or alleged omission has been made or incorporated therein
in reliance upon and in conformity with written information furnished to the
Company by the holder of Registrable Securities specifically stating that it is
for use in the preparation thereof. Such holder of Registrable Securities shall
also reimburse the Company, each such director, officer, underwriter, broker,
dealer and controlling or controlled person for any legal or other expenses
reasonably incurred by the Company, such director, officer, underwriter, broker,
dealer or controlling or controlled person in connection with investigating or
defending any such Losses.
Each party entitled to indemnification under this Section 1.5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, but the
failure of any Indemnifying Party to give such notice shall not relieve the
Indemnifying Party of its obligations under this Section 1.5 (except and to the
extent the Indemnifying Party has been materially prejudiced as a consequence
thereof). The Indemnifying Party shall be entitled to participate in, and if it
provides written notice to the Indemnified Party promptly after receiving the
notice from the Indemnified Party, at its expense to assume, the defense of any
such claim or any litigation resulting therefrom with counsel reasonably
satisfactory to the Indemnified Party; provided, that the Indemnified Party may
participate in such defense at its expense, notwithstanding the assumption of
such defense by the Indemnifying Party, and provided, further, that if the
defendants in any such action shall include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party shall have reasonably concluded
that there may be a conflict of interest in counsel representing both the
Indemnifying Party and the Indemnified Party, the Indemnified Party or Parties
shall have the right to select one separate counsel on behalf of all of the
Indemnified Party or Parties and the reasonable fees and expenses of such
counsel shall be paid by the Indemnifying Party. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party (which shall not be unreasonably withheld), consent to entry
of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to the
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.
The amount paid or payable by an Indemnifying Party as a result of the
Losses (or actions in respect thereof) referred to above in this Section 1.5 or
Section 1.6 hereof shall include any legal or other expenses reasonably incurred
by the Indemnified Party in connection with investigating or defending any such
action or claim (which shall be limited as provided in this Section 1.5). No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
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Indemnification similar to that specified in the preceding provisions
of this Section 1.5 (with appropriate modifications) shall be given by the
Company to the holders of Registrable Securities being registered and by such
holders to the Company with respect to any required registration or other
qualification of such Registrable Securities under any federal or state law or
regulation of governmental authority other than the Securities Act.
In the event of any underwritten offering of the Registrable
Securities under the Securities Act pursuant to the provisions of this Section
1, the Company and the holders thereof agree to enter into an underwriting
agreement, in standard form, with the underwriters, which underwriting agreement
may contain provisions with respect to indemnification different from those set
forth in this Section 1.5, but this Agreement shall govern as between the
Company and such holders.
1.6 EXCHANGE ACT REGISTRATION. The Company covenants
and agrees that until such time as a holder no longer holds any of the
Registrable Securities:
1.6.1 subsequent to any registration of Common Stock
under the Securities Act, the Company shall, if required by law, maintain an
effective registration statement (containing such information and documents as
the Commission shall specify) with respect to the Common Stock under Section
12(g) of the Exchange Act and shall file on time such information, documents and
reports as the Commission may require or prescribe for companies whose stock has
been registered pursuant to said Section 12(g);
1.6.2 the Company shall, if a registration statement
with respect to the shares of the Company under Section 12(b) or Section 12(g)
of the Exchange Act is, or is required to be maintained, effective, upon the
request of the holder, make whatever other filings with the Commission or
otherwise make generally available to the public such financial and other
information as may be reasonably necessary in order to enable the holder to be
permitted to sell its Registrable Securities pursuant to the provisions of Rule
144 promulgated under the Securities Act (or any successor rule or regulation
thereto or any statute hereafter adopted to replace or to establish the
exemption that is now covered by said Rule 144) if otherwise available; and
1.6.3 upon the reasonable request of the holder, the
Company shall deliver to the holder a written statement as to whether the
Company has complied with the requirements of this Section 1.6.
The Company represents and warrants that the registration or any
information, documents or reports filed with the Commission and incorporated by
reference therein shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements contained therein, in light of the circumstances
under which such statements were made, not misleading. The Company agrees to
indemnify and hold harmless (or, to the extent the same is not enforceable, make
contribution to) the holders of Registrable Securities being registered, their
respective partners, officers, directors and agents, each broker, dealer or
underwriter (within the meaning of the Securities Act) acting for such
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holders in connection with any offering or sale by such holders of Registrable
Securities or any person, firm or corporation controlling or controlled by
(within the meaning of the Securities Act) any such holder and any such broker,
dealer or underwriter from and against any and all Losses (or actions in respect
thereof) arising out of or resulting from any breach of the foregoing
representation or warranty, all on terms and conditions comparable to those set
forth in Section 1.5 hereof provided, however, that the Company shall not be
liable in any such case to the extent that any such Losses arise out of or are
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made or incorporated by reference in the registration
statement, document or report in reliance upon filings made by any such holder
under the Exchange Act and in conformity with written information furnished to
the Company by any such holder specifically stating that it is for use in the
preparation thereof; provided, further, that the Company shall be given written
notice and an opportunity to participate in, and, to the extent that it may
wish, to assume on terms and conditions comparable to those set forth in Section
1.5 hereof, the defense thereof.
1.7 LIMITATION ON REGISTRATION RIGHTS OF OTHERS. The Company
covenants and agrees that; so long as there are any shares of Registrable
Securities in respect of which any of the rights of registration provided for in
this Section 1 shall continue, the Company shall not, directly or indirectly,
without the prior written consent of the holders of a majority of such
Registrable Securities, which consent shall not be unreasonably withheld or
delayed, grant at any time after the date hereof to any person or agree to or
otherwise become obligated in respect of any rights of registration of
securities of the Company which are either (i) more favorable than, or (ii) in
the nature or substantially in the nature of, the rights of registration of the
holders of Registrable Securities pursuant to Sections 1.1 or 1.2 hereof;
provided, however, that the consent of the holders of Registrable Securities
shall not be required with regard to (ii) above if such rights of registration
are being offered to a holder of securities of the Company who purchased such
securities for a price per share equal to or greater than the then applicable
Conversion Price (as defined in the Company's Articles of Incorporation, as
amended) per share of the shares of Series B Preferred Stock issued to the
Investors on the Effective Date.
1.8 EXCEPTION TO REGISTRATION. The Company shall not be
required to effect a registration of Registrable Securities under this Agreement
if (i) the Registrable Securities have been previously sold pursuant to a
registration under the Securities Act, (ii) in the written opinion of counsel
for the Company, which counsel and the opinion so rendered shall be reasonably
acceptable to the holders of a majority of Registrable Securities, the holder
may sell without registration under the Securities Act substantially all of the
Registrable Securities for which it requested registration under the provisions
of the Securities Act and in the manner and in the quantity in which the
Registrable Securities were proposed to be sold or (iii) the Company shall have
obtained from the Commission a "no-action" letter to that effect; provided that
this Section 1.8 shall not apply to sales made under Rule 144(k) or any
successor rule promulgated by the Commission until two years after the effective
date of the Company's initial registration of shares under the Securities Act.
1.9 HOLDBACK OBLIGATIONS. Each holder of Registrable
Securities agrees not to make, during the seven days prior to and the 90 days
after the effective date of an underwritten
11
registration by the Company, any public sale or distribution of any of its
Registrable Securities (except as part of the underwritten registration or
pursuant to a registration on Form S-8 or any successor or comparable forms),
including a sale pursuant to Rule 144, unless the managing underwriter agrees
otherwise. The Company agrees not to make any public sale or distribution of any
of its equity securities or any securities convertible into or exchangeable or
exercisable for any of its equity securities, including a sale under Regulation
D of the Securities Act or under any other exemption of the Securities Act
(except as part of the underwritten registration or pursuant to a registration
on Form ▇-▇, ▇▇▇▇ ▇-▇ or any successor or comparable forms), during the seven
days prior to and the 90 days after the effective date of any underwritten
registration by the Company, unless the managing underwriter agrees otherwise.
The Company also agrees to use reasonable efforts to cause each holder of at
least 5% (on a fully-diluted basis) of its equity securities or any securities
convertible into or exchangeable or exercisable for any of its equity
securities, purchased from the Company at any time on or after the date of this
Agreement (other than pursuant to a registration), and shall cause each holder
of its equity securities or any securities convertible into or exchangeable or
exercisable for any of its equity securities who is selling securities pursuant
to an underwritten registration, 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 or pursuant to a registration on Form
S-8 or any successor or comparable forms), during the seven days prior to and
the 90 days after the effective date of the registration, unless the managing
underwriter agrees otherwise. Notwithstanding anything to the contrary herein,
this Section 1.9 shall not apply to any of the Investors, or their partners,
members or shareholders.
2. SPECIFIC PERFORMANCE. The Company recognizes that the rights of the
holders of Registrable Securities under this Agreement are unique and,
accordingly, the holders shall, in addition to such other remedies as may be
available to them at law or in equity, have the right to enforce their rights
hereunder by actions for injunctive relief and specific performance to the
extent permitted by law. This Agreement is not intended to limit or abridge any
right of the holders of Registrable Securities which may exist apart from this
Agreement.
3. EXPENSES. Pursuant to Section 23 of the Purchase Agreement, the
Company shall pay all expenses incident to the performance or enforcement of
this Agreement, including all fees and expenses of counsel for all activities
undertaken pursuant to this Agreement, except as otherwise provided in Section 1
hereof.
4. NOTICES, ETC. All notices and other communications hereunder shall
be in writing and shall be (i) mailed by first class or express mail, postage
prepaid, (ii) sent by telex, telegram, telecopy or other similar form of rapid
transmission, confirmed by mailing (by first class or express mail, postage
prepaid) written confirmation at substantially the same time as such rapid
transmission, or (iii) personally delivered to an officer of the receiving
party. All such communications shall be mailed, sent or delivered as follows:
If to the Company: DPEC, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇
▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to: Vorys, ▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to the Investors
or other holder
of Registrable
Securities:
River Cities Capital Fund II Limited
Partnership
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇ Funding, LLC
1850 National City Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇, Jr.
▇▇▇▇▇▇▇▇ Capital Group, LLC
1850 National City Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ Capital Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇, Head & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
or to such other person(s) or address(es) as the addressee shall have furnished
to the sender in writing.
Any notice so addressed and mailed shall be deemed to be given when so
mailed. Any notice so sent by rapid transmission shall be deemed to be given
when receipt of such
13
transmission is acknowledged, and any communication so delivered in person shall
be deemed to be given when receipted for by, or actually received by, an
authorized officer of the party to whom it is given.
5. ENTIRE AGREEMENT. The parties hereto agree that this Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings as between
them as to such subject matter. There are no restrictions, agreements or
arrangements, oral or written, between the parties relating to the subject
matter hereof which are not fully expressed or referred to herein.
6. WAIVERS AND FURTHER AGREEMENTS. No waiver of any breach of any term
or condition of this Agreement shall operate as a waiver of any other breach of
such terms or conditions or any other term or condition, nor shall any failure
to enforce any provision hereof operate as a waiver of such provision or of any
other provision hereof. Each of the parties hereto agrees to execute all such
further instruments and documents and to take all such further actions as the
other parties may reasonably require in order to effectuate the terms and
purposes of this Agreement.
7. AMENDMENTS. This Agreement may not be amended nor shall any waiver,
change, modification, consent or discharge be effected except by an instrument
in writing executed by or on behalf of the party against whom enforcement of any
amendment, waiver, change, modification, consent or discharge is sought.
8. ASSIGNMENT: SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the Investors and their successors and
permitted assigns and, provided that any transaction entered into by the Company
is in accordance with Section 10.8 of the Purchase Agreement, this Agreement
shall be binding upon and shall inure to the benefit of the Company and its
successors and permitted assigns.
9. SEVERABILITY. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, such
circumstance shall not have the effect of rendering the provision or provisions
in question, invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable, but this
Agreement shall be reformed and construed in any such jurisdiction or case as if
such invalid, inoperative or unenforceable provision had never been contained
herein and such provision reformed so that it would be valid, operative and
enforceable to the maximum extent permitted in such jurisdiction or in such
case.
10. COUNTERPARTS. This Agreement may be executed in counterparts. each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument, and in pleadings or proving any provision of this
Agreement, it shall not be necessary to produce more than one of such
counterparts.
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11. SECTION HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
12. PLURALS. Whenever used herein, the singular number shall include
the plural and the plural shall include the singular.
13. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Ohio.
14. TERMINATION OF THE ORIGINAL REGISTRATION RIGHTS AGREEMENT. The
Original Registration Rights Agreement is hereby terminated and shall be of no
further force or effect.
IN WITNESS WHEREOF, the parties have executed or caused to be executed
this Agreement as of the date first above written.
DPEC, INC.
By: /S/▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
President
RIVER CITIES CAPITAL FUND II
LIMITED PARTNERSHIP
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President of
▇▇▇▇▇▇, Inc., the General Partner
of River Cities Capital Fund II
Limited Partnership
JG FUNDING, LLC
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇, JR.
-----------------------------
▇▇▇▇▇ ▇▇▇▇▇, Jr.
Ventures, LLC, the Manager of JG
Funding, LLC
15
▇▇▇▇▇▇▇▇ CAPITAL GROUP, LLC
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Manager
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
16