REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of
July 22, 1997 by and among BCAM INTERNATIONAL, INC., a New York corporation
("Company"), Corporate Capital Management ("Investment Banker") and the
subscribers (hereinafter referred to as "Subscribers" or "Investors") to the
Company's offering ("Offering") of up to One Million Five Hundred Thousand
Dollars ($1,500,000) of Series A Convertible Preferred Stock (the "Preferred
Stock") pursuant to the Regulation D Securities Subscription Agreement between
the Company and the Subscriber(s) ("Subscription Agreement").
1. Definitions For purposes of this Agreement:
(a) The term "register", "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933 (the "Act"), and
the declaration or ordering of effectiveness of such registration statement or
document;
(b) For purposes of the Required Registration under Section 2 hereof, the
term "Registrable Securities" means the shares of the Company's Common Stock
issuable or issued upon (i) conversion of the Series A Preferred Stock (the
"Preferred Stock") issued to Subscribers in the Offering and (ii) exercise of
the Warrants.
For purposes of a Piggyback Registration under Section 3 hereof,
"Registrable Securities" shall have the meaning set forth above, except that the
following shall not constitute Registrable Securities for purposes of a
Piggyback Registration under Section 3 hereof:
1. shares of Common Stock obtainable (x) on conversion of the Preferred
Stock (in whole or in part) and (y) on exercise of the Warrant (the
"Warrant Shares"), shall not constitute Registrable Securities if
those shares of Common Stock may be resold in a public transaction
without registration under the Act, including without limitation
pursuant to Rule 144 under the Act, and
2. any Registrable Securities resold in a public transaction shall
cease to constitute Registrable Securities.
(c) The number of shares of "Registrable Securities then outstanding"
shall be determined by the number of shares of Common Stock which have been
issued or are issuable upon conversion of the Preferred Stock and exercise of
the Warrants at the time of such determination;
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(d) The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any permitted assignee thereof;
(e) The term "Warrants" means the warrants granted to any Subscriber(s)
the Investment Banker or to any persons designated by them in connection with
this Offering;
(f) The term "Initiating Holders" means (i) holders of Registrable
Securities obtained or obtainable upon conversion of at least Two Hundred (200)
shares of Preferred Stock; and
(g) The term "Due Date" means the date which is ninety (90) days after the
Last Closing of the initial tranche (as defined in the Subscription Agreement)
of the Offering (as defined in the Subscription Agreement).
2. Required Registration
(a) Within thirty (30) days after the Last Closing of the initial tranche
of the Offering (as defined in the Subscription Agreement), the company shall
file a registration statement ("Registration Statement") on form S-3 (or other
suitable form, at the Company's discretion but subject to the reasonable
approval of the Investors), covering the resale of all shares of Registrable
Securities then outstanding.
(b) The Registration Statement shall be done as a "shelf" registration
statement under Rule 415, and shall be maintained effective until
the distribution described in the Registration Statement is
completed. The Company shall use its best efforts to have the
Registration Statement declared effective within ninety (90) days
after the Last Closing of the initial tranche (as defined in the
Subscription Agreement).
3. Piggyback Registration. If the Registration Statement described in
Section 2 is not effective by the Due Date, and If (but without any obligation
to do so) the company proposes to register (including for this purpose a
registration effected by the Company for shareholders other than the Holders)
any of its Common Stock under the Act in connection with the public offering of
such securities solely for cash (other than a registration relating solely for
the sale of securities to participants in a Company stock plan or a registration
on Form S-4 promulgated under the Act or any successor or similar form
registering stock issuable upon a reclassification, upon a business combination
involving an exchange of securities or upon an exchange offer for securities of
the issuer or another entity), the Company shall, at such time, promptly give
each Holder written notice of such registration (a "Piggyback Registration
Statement"). Upon the written request of each Holder given by fax within ten
(10) days after mailing of such notice by the Company, which request shall state
the intended method of disposition of such shares by such Holder, the Company
shall cause to be included in such registration statement under the Act all of
the Registrable Securities that each such Holder has requested to be registered
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("Piggyback Registration"), nothing herein shall prevent the Company from
withdrawing or abandoning the registration statement prior to its effectiveness.
4. Limitation on Obligations to Register
(a) In the case of a Piggyback Registration on an underwritten public
offering by the Company, if the managing underwriter determines and advises in
writing that the inclusion in the registration statement of all Registrable
Securities proposed to be included would interfere with the successful marketing
of the securities proposed to be registered by the company, then the number of
such Registrable Securities to be included in the registration statement shall
be allocated among all Holders who had requested Piggyback Registration, in the
proportion that the number of Registrable Securities which each such Holder,
including Investment Banker, seeks to register bears to the total number of
Registrable Securities sought to be included by all Holders, including
Investment Banker.
(b) Notwithstanding anything to the contrary herein, the Company shall
have the right (i) to defer the initial filing or request for acceleration of
effectiveness of any Piggyback Registration Statement or (ii) after
effectiveness, to suspend effectiveness of any such registration statement, if,
in the good faith judgment of the board of directors of the Company and upon the
written advice of counsel to the Company, which delay in filing or requesting
acceleration of effectiveness or such suspension of effectiveness is necessary
in light of (i) the requirement by the underwriter in a public offering by the
Company that such Registration Statement be delayed or suspended or (ii) the
existence of material non-public information (financial or otherwise) concerning
the Company, disclosure of which at the time is not, in the opinion of the board
of directors of the Company upon the advice of counsel, (A) otherwise required
and (B) in the best interests of the Company; provided, however, that solely in
the case of a demand registration the Company will not delay filing or suspend
effectiveness of such registration for more than three (3) months from the date
of demand, unless it is then engaged in an acquisition that would make such
registration impracticable, in which case it will use its best efforts to
eliminate such impracticability as soon as possible after such three (3) month
period.
(c) In the event the Company believes that shares sought to be registered
under Section 2 or Section 3 by Holders do not constitute "Registrable
Securities" by virtue of Section 1 (b) of this Agreement, and the status of
those shares as Registrable Securities is disputed, the Company shall provide,
at its expense, an Opinion of Counsel, reasonably acceptable to the Holders of
the Securities at issue (and satisfactory to the Company's transfer agent to
permit the sale and transfer) that those securities may be sold immediately,
without restriction or resale, without registration under the Act, by virtue of
Rule 144 or applicable provisions.
5. Obligations of the Company Whenever required under this Agreement to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
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(a) In the event that the number of shares available under a registration
statement filed pursuant to Section 2 or 3 above is insufficient to cover all of
the Registrable Securities then outstanding, the Company shall amend that
registration statement, or file a new registration statement, or both, so as to
cover all shares of Registrable Securities then outstanding. The Company shall
use its best efforts to effect such amendment or new registration within ninety
(90) days of the date the registration statement filed under Section 2 or 3 is
insufficient to cover all the shares of Registrable Securities then outstanding.
Unless and until such amendment or new registration statement is effective, the
Investors shall have the rights described in Section 2(c) above.
(b) Prepare and file with the Securities and Exchange Commission ("SEC") a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective.
(c) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(d) With respect to any Registration Statement filed pursuant to this
Agreement, keep such registration statement effective until the Holders of
Registrable Securities covered by such registration statement have completed the
distribution described in the registration statement.
(e) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(f) 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 shall be reasonably requested by the Holders of the Registrable
Securities covered by such registration statement, provided that the Company
shall not be required in connection therewith or as a condition thereto qualify
to do business or to file a general consent to service or process in any such
states or jurisdictions.
(g) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such agreement.
(h) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such
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registration statement, as then in effect, includes an untrue statement of
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in lights of the
circumstances then existing.
(i) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Agreement, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Agreement, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date the registration statement with respect to such
securities becomes effective, (i) an opinion, dated such date of the outside
counsel of recognized standing (or reasonably acceptable to Holder) representing
the Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holders requesting registration of
Registrable Securities and (ii) a letter dated such date, form the independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and the Holders requesting registration
of Registrable Securities.
(j) As promptly as practicable after becoming aware of such event, notify
each Investor of the happening of any event of which the Company has knowledge,
as a result of which the prospectus included in the 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
statement therein, in light of the circumstances under which they were made, not
misleading, and use its best efforts promptly to prepare a supplement or
amendment to the Registration Statement to correct such untrue statement or
omission, and deliver a number of copies of such supplement or amendment to each
Investor as such Investor may reasonably request.
(k) Provide Holders with written notice of the sate that a registration
statement registering the resale of the Registrable Securities is declared
effective by the SEC.
(l) Provide Holders and their representatives the opportunity to conduct a
reasonable due diligence inquiry of Company's pertinent financial and other
records and make available its officers, directors and employees for questions
regarding such information as it relates to information contained in the
registration statement.
(m) Provide Holders and their representatives the opportunity to review
the registration statement and all amendments thereto a reasonable period of
time prior to their filing with the SEC.
6. Furnish Information It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement with
regard to each selling Holder that such selling Holders shall furnish to the
Company such information regarding themselves, the Registrable Securities held
by them, and the intended method of disposition of such securities as shall be
required to effect the registration of their
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Registrable Securities or to determine that registration is not required
pursuant to Rule 144 or other applicable provision of the Act.
7. Expenses of Registration All expenses other than underwriting discounts
and commissions and fees and expenses of counsel to the selling Holders incurred
in connection with registrations, filing or qualifications pursuant to Sections
2 and 3, including (without limitation) all registration, filing and
qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company, shall be borne by the Company.
8. Indemnification In the event any Registrable Securities are included in
a registration statement under this Agreement.
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each Holder, the officers and directors of each Holder, any underwriter
(as defined in the Act) for such Holder and each person, if any, who controls
such Holder or underwriter within the meaning of the Act or the Securities
Exchange Act of 1934, as amended (the "1934 Act"), against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Act, the 1934 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 amendment 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 not misleading, or (iii) any violation by the
Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, the 1934 Act or any state securities law,
and the Company will reimburse each such Holder, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, subsection 10(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability, or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable 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 any such Holder, officer, director, underwriter or controlling
person.
(b) To the extent permitted by law, each selling Holder, severally and not
jointly, will indemnify and hold harmless the Company, each of its directors,
each of its officers who have signed the registrations statement, each person,
if any, who controls the company within the meaning of the Act, any underwriter
and any other Holder selling securities in such registration statement or any of
its directors or officers or any person who controls such Holder, against any
losses, claims, damages, or liabilities (joint or
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several) to which the Company or any such director, officer, controlling person,
or underwriter or controlling person, or other such Holder or director, officer
or controlling person may become subject, under the Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will reimburse any legal or other expenses reasonably incurred by the
Company and any such director, officer, controlling person, underwriter or
controlling person, other Holder, officer, director, or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability, or action, provided, however, that the indemnity agreement contained
in this subsection 10(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld, provided, that, in no event shall any indemnity under this subsection
10(b) exceed the net proceeds from the offering received by such Holder
(c) Promptly after receipt by an indemnified party under this Section 10
of notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 10, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, 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 reasonably incurred fees and expenses of one such counsel to
be paid by the indemnifying party, if representation of such indemnified party
by the counsel retained by the indemnifying party would be inappropriate due to
actual or potential conflicting 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, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 10, but the omission so to delivery 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 Section 10.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 10 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and each holder of Registrable
Securities agree to contribute to the aggregate claims, losses, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defining same) (collectively "Losses") to which the
Company and one or more of the holders of Registrable Securities may be subject
in such proportion as is appropriate to reflect the relative fault of the
Company and the holders in connection with the statements or omissions which
resulted in such Losses; provided, however, that in no case shall any holder be
responsible for any
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amount in excess of the net purchase price of securities sold by it under the
registration statement. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by the Company or by the holder. The Company and the holders agree that it would
not be just and equitable if contribution were determined by pro rata allocation
or any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of the is
paragraph (d), 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. For purposes of this Section 10, each person who controls a
holder of Registrable Securities within the meaning of either the Securities Act
or the Exchange Act and each director, officer, partner, employee and agent of a
holder shall have the same rights to contribution as such holder, and each
person who controls the Company within the meaning of either the Securities Act
or the Exchange Act and each director of the Company, and each officer of the
Company who has signed the registration statement, shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
(e) The obligations of the company and Holders under this Section 10 shall
survive the redemption and conversion, if any, of Preferred Stock, the
completion of any offering of Registrable Securities in a registration statement
under this Agreement, and otherwise.
9. Reports Under Securities Exchange Act of 1934 With a view to making
available to the Holders the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration, the Company
agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company, if
true, that it has complied with the reporting requirements of SEC Rule 144, the
Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report
of the company and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested in availing any
Holder of any rule of regulation of the SEC which permits the selling of any
such securities without registration.
10. Amendment of Registration Rights Any provision of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent
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of the company and the holders of a majority of the Registrable Securities
provided that the amendment treats all Holders equally. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each Holder,
each future Holder, and the Company.
11. Notices All notices required or permitted under this Agreement shall
be made in writing signed by the party making the same, shall specify the
section under this Agreement pursuant to which it is given, and shall be
addressed if to (i) the Company at: President, BCAM International, Inc., 0000
Xxxx Xxxxxxx Xxxx, Xxxxxxxx, XX 00000, Telephone No. (000) 000-0000, Telecopy
No. (000) 000-0000 and (ii) the Holders at their respective last address as the
party shall have furnished in writing as a new address to be entered on such
register. Any notice, except as otherwise provided in this Agreement, shall be
made by fax and shall be deemed given at the time of transmission of the fax.
12. Termination This Agreement shall terminate on the date that is two (2)
years from the date of this Agreement; but without prejudice to (i) the
parities' rights and obligations arising from breaches of this Agreement
occurring prior to such termination (ii) other indemnification obligations under
this Agreement or (iii) the Company's obligation to maintain the effectiveness
of registration statement filed prior thereto in accordance with the terms
hereof, and to fulfill its obligation hereunder in respect thereof until it is
no longer required to maintain the effectiveness thereof.
13. Assignment No assignment, transfer or delegation, whether by operation
of law or otherwise, of any rights or obligations under this Agreement by the
Company or any Holder, respectively, shall be made without the prior written
consent of the majority in interest of the Holders or the Company, respectively;
provided that the right of a Holder may be transferred to a subsequent holder of
the Holder's Registrable Securities (provided such transferee shall provide to
the Company, together with or prior to such transferee's request to have such
Registrable Shares included in a Piggyback Registration, a writing executed by
such transferee agreeing to be bound as a Holder by the terms of the Agreement);
and provided further that the Company may transfer its rights and obligations
under this Agreement to a purchaser of all or a substantial portion of its
business if the obligations of the company under this Agreement are assumed in
connection with such transfer, either by merger or other operation of law (which
may include without limitation a transaction whereby the Registrable Shares are
converted into securities of the successor in interest) or by specific
assumption executed by the transferee.
(Intentionally Left Blank)
15. Governing Law This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
in and wholly to be performed in that jurisdiction, except for matters arising
under the Actor the
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Securities Exchange Act of 1934, which matters shall be construed and
interpreted in accordance with such laws.
IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first above written.
BCAM INTERNATIONAL, INC.
By: \s\ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
Address: BCAM International, Inc.
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
By: \s\ Xxxx Xxxxxx
-----------------------------
Xxxx Xxxxxx, President
Address: Corporate Capital Management
00000 00xx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxx 00000
INVESTOR(S)
-----------------------------
Investor's Name
By:
-----------------------------
(Signature)
Address:
-----------------------------
-----------------------------
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