REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of May ____, 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 (the "Holder").
WHEREAS, pursuant to a Subscription Agreement dated as of the
date hereof, the Company has offered to the Holder in a private offering (the
"Offering") ___________ shares of Common Stock, $.01 par value, of the
Company (the "Shares"), and a twelve (12%) percent $______________ principal
amount redeemable eighteen-month promissory note (the "Note"). The foregoing
shall sometimes be referred to collectively herein as the "Securities";
WHEREAS, pursuant to the terms of and in order to induce the
Holders to enter into the Subscription Agreements to purchase the Securities,
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 purchase by the
Holder of the Securities.
NOW, THEREFORE, in consideration of the premises, promises 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 after the date of this Agreement proposes to register any of its
securities under the Securities Act of 1933, as amended (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 in the registration
statement for the underwritten offering in such registration. The Shares are
sometimes referred to collectively herein as the "Registrable Securities".
If such managing underwriter agrees to include the Registrable Securities in
the registration statement relating to 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' right 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), 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 file the registration statement wherein the Registrable
Securities are being registered 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, the Company 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.
(b) OPTION TO INCLUDE REGISTRABLE SECURITIES IN
OFFERING. The Holders, subject to the provisions of Section 1(a), shall have
the option to include their Registrable Securities in the registration
statement, relating to the Company's underwritten offering. The Company
shall not be required to include any of the Holders' Registrable Securities
in the registration statement relating to the 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
2
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 of more than 50% of the Registrable Securities have not had their
Registrable Securities included in a filed registration statement pursuant to
Section 1(a), the Company shall use its best efforts on one occasion 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 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 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;
(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
3
desire to sell or otherwise dispose of the same (including prospectus
supplements with respect to the sales of securities 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
Holders may reasonably request in order to facilitate the public sale or
other disposition of the securities owned by the Holders;
(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 Holders 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, 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 are 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 necessary
to make the statements therein not misleading in the light of the
circumstances then existing; and
(h) 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
4
specifically required elsewhere herein which in the aggregate would cost in
excess of $1,000.
3. RESTRICTIONS ON TRANSFER OF REGISTRABLE SECURITIES. The
Holder agrees that he will not sell, transfer, assign, hypothecate or
otherwise dispose of any of the Registrable Securities for a period of
twenty-four (24) months from the effective date of the registration statement
pursuant to which its Registrable Securities have been registered without the
prior written consent of the Underwriter of the Company's initial public
offering.
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, 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 statement
including any preliminary prospectus or final prospectus contained therein or
any amendments or
5
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 reasonably 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 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 in each case the Holder shall reimburse the
Company, affiliate, officer or director or shareholder, underwriter or
controlling person for any legal or other expenses reasonably 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 and respect thereof) arise out of or are based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly by such Holder or any other officer, director
or controlling person thereof to the Company in connection with the
registration of Registrable Securities. Notwithstanding the above, the
Holder's indemnification shall be limited to the dollar value of the
securities being registered for the account of the Holder.
(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
6
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 in combination with other parties who have entered
into substantially identical agreements, with the fees and expenses to be
paid by the indemnifying party, if the indemnified party based upon advice of
counsel 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 indemnifyng party's prior consent.
(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
7
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. In the event of any transfer, the transfer will only
be permitted if the transferee agrees to be bound by the provisions of this
Agreement.
7. 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, 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 f or breach of
any part of this Agreement.
8. NOTICES.
(a) All communications under this Agreement shall
be in writing and shall be mailed by certified mail return receipt requested,
postage prepaid, or telegraphed or telexed with confirmation of receipt or
delivered by hand or by overnight delivery service,
8
(i) If to the Company, at:
Apollo International of Delaware, Inc.
▇▇▇▇ ▇. ▇.▇. ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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
certified mail return receipt requested 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 delivery service
shall be deemed to be given when delivered.
9. 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.
10. AMENDMENT, WAIVER AND TERMINATION. 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. 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. Upon the conversion of the
Warrants offered in the offering into identical warrants as are included in
any registration statement pursuant to paragraph 1(a) hereof, this Agreement
shall terminate and be null and void. Thereafter, the Warrants shall be
governed by the public warrant agreement relating to such warrants.
11. 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.
12. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Florida,
without giving effect to conflicts of law principles.
13. 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
9
remaining provisions contained herein shall not be affected thereby.
14. 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.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
APOLLO INTERNATIONAL OF DELAWARE, INC.
By:
----------------------- ----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Signature of Holder
Position: President
--------------------------------
Print Name of Holder
--------------------------------
--------------------------------
Print Address of Holder
