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EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
Agreement made as of this 16th day of August, 1994 by and among
ViaGrafix Corporation, an Oklahoma corporation (the "Company"), the persons or
entities listed on Schedule A attached hereto (individually, an "Investor", and
collectively, the "Investors") and the Founders (as hereinafter defined).
1. CERTAIN DEFINITIONS
Section 1. As used in this Agreement, the following terms shall have
the following meanings:
1.1. Commission means the Securities and Exchange
Commission, or any other federal agency at the time administering the
Securities Act and the Exchange Act.
1.2. Common Stock means (a) the Company's Common Stock, as
authorized on the date of this Agreement, (b) any other capital stock of any
class or classes (however designated) of the Company, authorized on or after
the date hereof, the holders of which shall have the right, without limitation
as to amount, either to all or to a share of the balance of current dividends
and liquidating dividends after the payment of dividends and distributions on
any shares entitled to preference, and the holders of which shall ordinarily,
in the absence of contingencies or in the absence of any provision to the
contrary in the Company's Certificate of Incorporation, as amended, be entitled
to vote for the election of a majority of directors of the Company (even though
the right so to vote has been suspended by the happening of such a contingency
or provision), and (c) any other Securities into which or for which any of the
securities described in (a) or (b) may be converted or exchanged pursuant to a
plan of recapitalization, reorganization, merger, sale of assets or otherwise.
1.3. Exchange Act means the Securities Exchange Act of
1934, as amended, or any similar federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the time.
1.4. Person means an individual, corporation, partnership,
joint venture, trust, or unincorporated organization, or a government or any
agency or political subdivision thereof.
1.5. Purchase Agreement means the Series A Convertible
Preferred Stock Purchase Agreement dated the date hereof among the Company, the
Investors and certain principal shareholders of the Company.
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1.6. Registrable Securities means any shares of Common
Stock owned by an Investor or its permitted successors and assigns, including
shares of Common Stock issued or issuable upon conversion of any Series A
Preferred Shares; except for any shares of such Common Stock (i) which have at
any time been sold by such parties other than to a permitted assignee, as
defined in Section 5 hereof, of an Investor, and (ii) which have at any time
been sold in a registered public offering or pursuant to Rule 144 promulgated
under the Securities Act.
1.7. Securities Act means the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
1.8. Series A Preferred Shares means the shares of Series
A Convertible Preferred Stock purchased by the Investors pursuant to the
Purchase Agreement, and with respect to each Investor in the amounts set forth
on Schedule I to the Purchase Agreement.
1.9. Stockholders Agreement means that certain
Stockholders Agreement dated as of the date hereof among the Company, the
Investors and certain stockholders of the Company.
1.10. Founders means Xxxxxxx Xxxxxxx and Xxxxxx Xxxxxxx.
1.11. Founder Shares shall mean the aggregate of 5,220,000
shares of Common Stock that the Founders own, or have the right to acquire on
the date hereof, but excluding any such Common Stock that has been (a)
registered under the Securities Act pursuant to an effective registration
statement filed thereunder and disposed of in accordance with the registration
statement covering them or (b) publicly sold pursuant to Rule 144 under the
Securities Act.
2. REGISTRATION RIGHTS
Section 2.1. Piggyback Registrations. If at any time or times
after the date hereof, the Company shall determine to register any of its
Common Stock or securities convertible into or exchangeable for Common Stock
under the Securities Act, whether in connection with a public offering of
securities by the Company (a "primary offering"), a public offering thereof by
stockholders (a "secondary offering"), or both (but not in connection with a
registration effected solely to implement an employee benefit plan or a
transaction to which Rule 145 or any other similar rule of the Commission under
the Securities Act is applicable), the Company will promptly give written
notice thereof to the holders of Registrable Securities and Founder Shares then
outstanding (the "Holders"), and will use its best efforts to effect the
registration under the Securities Act of
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all Registrable Securities and Founder Shares which the Holders may request in
a writing delivered to the Company within fifteen (15) days after the notice
given by the Company; provided, however, that in the event that any
registration pursuant to this Section 2.1 shall be, in whole or in part, an
underwritten public offering of Common Stock, the number of shares of
Registrable Securities and Founder Shares to be included in such an
underwriting may be reduced (pro rata among the requesting Holders based upon
the number of shares of Registrable Securities and Founder Shares owned by such
Holders) if and to the extent that the managing underwriter shall be of the
opinion that such inclusion would adversely affect the marketing of the
securities to be sold by the Company therein, provided, however, that in no
event may less than one-half of the total number of shares of Common Stock to
be included in such underwriting be made available for Registrable Securities
and Founder Shares, and provided, further, that, prior to any such reduction,
the Company shall first exclude from such registration, in the following order,
all shares of Common Stock sought to be included therein by (i) any holder
thereof not having any such contractual, incidental registration rights, and
(ii) any holder thereof having contractual, incidental registration rights
subordinate and junior to the rights of the Holders of Registrable Securities
or Founder Shares Securities and Founder Shares.
Section 2.2. Form S-3. If the Company becomes eligible to use Form
S-3, the Company shall use its reasonable efforts to continue to qualify at all
times for registration on Form S-3. If and when the Company becomes entitled to
use Form S-3, the holders of an aggregate of not less than twenty (20%) of
Registrable Securities shall have the right to request and have effected not
more than one registration per year of shares of Registrable Securities held by
them on Form S-3 for a public offering of shares of Registrable Securities
having an aggregate proposed offering price of not less than $500,000. Such
requests shall be in writing and shall state the number of shares of
Registrable Securities to be disposed of and the intended method of disposition
of such shares by such holder or holders. The Company shall not be required to
cause a registration statement requested pursuant to this Section 2.2 to become
effective prior to 90 days following the effective date of a registration
statement initiated by the Company, if the request for registration has been
received by the Company subsequent to the giving of written notice by the
Company, made in good faith, to the holders of Registrable Securities to the
effect that the Company is commencing to prepare a Company-initiated
registration statement (other than a registration effected solely to implement
an employee benefit plan or a transaction to which Rule 145 or any other
similar rule of the Commission under the Securities Act is applicable);
provided, however, that the Company shall use its best efforts to achieve such
effectiveness promptly following such 90-day period if the request pursuant to
this Section 2.2 has been made prior to the expiration of such 90-day period.
The
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Company shall give notice to all holders of Registrable Securities of the
receipt of a request for registration pursuant to this Section 2.2 and shall
provide a reasonable opportunity for such holders to participate in the
registration. Subject to the foregoing, the Company will use its best efforts
to effect promptly the registration of all shares of Common Stock on Form S-3
to the extent requested by the holder or holders thereof for purposes of
disposition. Notwithstanding the foregoing, the Company shall not be required
to effect a registration under this Section 2.2 or Section 2.1 if, in the
opinion of counsel for the Company, which counsel and opinion shall be
reasonably acceptable to the Holders of Registrable Securities, such Holders of
Registrable Securities may then sell all Registrable Securities within a 90 day
period without registration under the Act.
Section 2.3. Registration Expenses. (a) In the event of a
registration described in Sections 2.1 and 2.2, all expenses of registration
and offering of the Company and the Holders participating in the offering
including, without limitation, printing expenses, fees and disbursements of
counsel, including one counsel for the selling Holders of Registrable
Securities or Founder Shares, and independent public accountants, fees and
expenses (including counsel fees incurred in connection with complying with
state securities or "blue sky" laws, fees of the National Association of
Securities Dealers, Inc. and fees of transfer agents and registrars), shall be
borne by the Company in an amount not to exceed $50,000, except that the
Holders shall bear underwriting commissions and discounts attributable to their
Registrable Securities or Founder Shares, as the case may be, being registered.
Section 2.4. Further Obligations of the Company. Whenever under
the preceding sections of this Agreement the Company is required hereunder to
register Registrable Securities or Founder Shares, it agrees that it shall also
do the following:
(a) Use its best efforts to diligently prepare for filing
with the Commission a registration statement and such amendments and
supplements to said registration statement and the prospectus used in
connection therewith as may be necessary to keep said registration
statement effective and to comply with the provisions of the
Securities Act with respect to the sale of securities covered by said
registration statement for the period necessary to complete the
proposed public offering;
(b) Furnish to each selling Holder such copies of each
preliminary and final prospectus and such other documents as such
holder may reasonably request to facilitate the public offering of his
Registrable Securities or Founder Shares;
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(c) Enter into any underwriting agreement with provisions
reasonably required by the proposed underwriter for the selling
Holders, if any; and
(d) Use its best efforts to register or qualify the
Registrable Securities and Founder Shares covered by said registration
statement under the securities or "blue-sky" laws of such
jurisdictions as any selling holder of Registrable Securities or
Founder Shares may reasonably request, provided that the Company shall
not be required to register in any states which shall require it to
qualify to do business or subject itself to general service of process
as a condition of such registration.
3. INDEMNIFICATION. Incident to any registration referred to in this
Agreement, and subject to applicable law, the Company will indemnify each
underwriter, each Holder of Registrable Securities and Founder Shares so
registered, and each person controlling any of them against all claims, losses,
damages and liabilities, including legal and other expenses reasonably incurred
in investigating or defending against the same, arising out of any untrue
statement of a material fact contained in any prospectus or other document
(including any related registration statement) or any omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any violation by the
Company of the Securities Act, any state securities or "blue-sky" laws or any
rule or regulation thereunder in connection with such registration; provided,
however, that the Company will not be liable in any case to the extent that any
such claim, loss, damage or liability may have been caused by an untrue
statement or omission based upon information furnished in writing to the
Company by such Holder expressly for use therein. In the event of any
registration of any of the Registrable Securities or Founder Shares under the
Securities Act pursuant to this Agreement, each seller of Registrable
Securities or Founder Shares, as the case may be, jointly and severally, will
indemnify and hold harmless the Company, each of its directors and officers and
each underwriter (if any) and each person, if any, who controls the Company or
any such underwriter within the meaning of the Securities Act or the Exchange
Act against any claim, losses, damages and liabilities, including legal and
other expenses reasonably incurred in investigating or defending it against the
same, arising out of any untrue statement of a material fact contained in any
prospectus or other document (including any related registration statement) or
any omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, if the statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of such selling Holder, specifically
for use in connection with the preparation of such registration statement,
prospectus, amendment of supplement; provided, however, that the obligations
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of such selling Holders hereunder shall be limited to an amount equal to the
proceeds to each Holder of Registrable Securities or Founder Shares sold as
contemplated herein.
4. RULE 144 REQUIREMENTS. If the Company becomes subject to the reporting
requirements of either Section 13 or Section 15(d) of the Exchange Act, the
Company will use its best efforts to file with the Commission such information
as the Commission may require under either of said Sections; and in such event,
the Company shall use its best efforts to take all action as may be required as
a condition to the availability of Rule 144 under the Securities Act (or any
successor exemptive rule hereinafter in effect). The Company shall furnish to
any Holder of Registrable Securities or Founder Shares upon request, a written
statement executed by the Company as to the steps it has taken to comply with
the current public information requirements of Rule 144.
5. TRANSFER OF REGISTRATION RIGHTS. The registration rights of the
Holders under this Agreement may be transferred to any transferee of any Series
A Preferred Shares or any Registrable Securities or Founder Shares who (i) is a
Holder of Registrable Securities or Founders Shares as of the date of this
Agreement, (ii) is an affiliate, as that term is defined in the Investment
Company Act of 1940, of a Holder of Registrable Securities as of the date of
this Agreement (including a partner of such Holder), (iii) is the owner of an
investment account which is managed or advised by an Investor or by Geocapital
Management, L.P., or by an affiliate of an Investor or Geocapital Management,
L.P., or (iv) acquires at least 100,000 shares of Common Stock, assuming
conversion of all Series A Preferred Shares (or such lesser number of shares of
Common Stock which constitutes the total number of shares of Common Stock
purchased by the transferring Holder of Registrable Securities under this
Agreement; (as adjusted for stock splits, stock dividends, reclassifications,
recapitalizations or other similar events). Each such transferee shall be
deemed to be a "Holder" for purposes of this Agreement; provided, that, no
transfer of registration rights by a Holder pursuant to this Section 5 shall
create any additional rights in the transferee beyond those rights granted to
Holders in this Agreement.
6. GRANTING OF REGISTRATION RIGHTS. The Company shall not, without the
prior written consent of the holders of at least a majority in interest of the
Registrable Securities, grant any rights to any Persons to register any shares
of capital stock or other securities of the Company if such rights could
reasonably be expected to be superior to or be on parity with, the rights of
the holders of Registrable Securities granted pursuant to this Agreement.
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7. MISCELLANEOUS
Section 7.1. Damages. The Company recognizes and agrees that the
holders of Registrable Securities will not have an adequate remedy if the
Company fails to comply with this Agreement and that damages may not be readily
ascertainable, and the Company expressly agrees that, in the event of such
failure, it shall not oppose an application by a Holder of Registrable
Securities requiring specific performance of any and all provisions hereof or
enjoining the Company from continuing to commit any such breach of this
Agreement.
Section 7.2. Approval of Underwriters. The engagement by the
Company of any managing underwriter in any registration of the Company's
securities shall require the prior written approval of the Investors holding a
majority of the Registrable Securities.
Section 7.3. No Waiver; Cumulative Remedies. No failure or delay
on the part of any party to this Agreement in exercising any right, power or
remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
hereunder. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 7.4. Amendments and Waivers. Except as hereinafter
provided, amendments to this Agreement shall require and shall be effective
upon receipt of the written consent of: (i) the Company, (ii) the holders of at
least a majority in interest of the Registrable Securities and (ii) in the case
of any amendment adversely affecting the rights of the Founders, the holders of
at least a majority in interest of the Founder Shares. Except as hereinafter
provided, compliance with any covenant or provision set forth herein may be
waived upon written consent by the party or parties whose rights are being
waived; provided that, (i) if the rights of holders of Registrable Securities
are being waived, upon the written consent of the holders of at least a
majority in interest of the Registrable Securities and (ii) if the rights of
holders of Founder Shares are being waived, upon the written consent of the
holders of at least a majority in interest of the Founder Shares.
Notwithstanding the foregoing, no waivers or amendments shall be effective to
reduce the percentage in interest of the Registrable Securities the consent of
the holders of which is required under this Section. Any waiver or amendments
may be given subject to satisfaction of conditions stated therein and any
waiver or amendments shall be effective only in the specific instance and for
the specific purpose for which given.
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Section 7.5. Notices.
As the terms "notice" or "notices" are used herein as between the
parties, such term shall mean a written document, explaining in reason for the
notice, and the same shall be mailed by United States Postal Service Via
Certified Mail, Return Receipt Requested, addressed as follows:
to the Company:
ViaGrafix Corporation
Attention: Xxxx Xxxxxxx
Five Xxxxx Xxxx Xxxxxx
Xxxxx, XX 00000
Fax: 000-000-0000
with a copy by mail and fax (which shall not constitute notice) to:
Xxxx X. Xxxx, Attorney
X.X. Xxxxxx 0000
Xxxxx, XX 00000
Fax: 000-000-0000
to the Investors:
GEO Capital III, L.P.
Xxx Xxxxxx Xxxxx
Xxxxx Xxxxx
Xxxx Xxx, XX 00000
Attention: Xxxxxxxx Xxxxxx
with a copy by mail and fax (which shall not constitute notice) to:
Xxxxxxx X. Xxxxx, Xx., Esquire
Xxxxx, Xxxxxxx & Xxxxxxxxx
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
Such notice shall be deemed to have been given on the date placed in the U.S.
Mails, and sent by fax to counsel, whether actually received by the addressee
or not. The parties shall, as a matter of convenience and courtesy, send each
party receiving notice a copy of said notice by facsimile or electronic means,
or by courier, Federal Express, or similar service, but such notifications
shall not be deemed lawful "notice" as required hereby. The parties may from
time to time amend the above addresses and names by written notice given the
other party.
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Section 7.6. Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors and assigns, except that the Company shall not
have the right to delegate its obligations hereunder or to assign its rights
hereunder or any interest herein without the prior written consent of the
holders of at least a majority in interest of the Registrable Securities.
Section 7.7. Prior Agreements. This Agreement constitutes the
entire agreement between the parties and supersedes any prior understandings or
agreements concerning the subject matter hereof.
Section 7.8. Severability. The provisions of this Agreement are
severable and, in the event that any court of competent jurisdiction shall
determine that any one or more of the provisions or part of a provision
contained in this Agreement, shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement, but this Agreement shall be reformed and construed as if such
invalid or illegal or unenforceable provision, or part of a provision, had
never been contained herein, and such provisions or part reformed so that it
would be valid, legal and enforceable to the maximum extent possible.
Section 7.9. Governing Law. This Agreement shall be governed by
and construed in accordance with the substantive laws of the State of Oklahoma.
Section 7.10. Headings. Article, section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.
Section 7.11. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument, and any of the parties hereto may execute this Agreement
by signing any such counterpart.
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Section 7.12. Further Assurances. From and after the date of this
Agreement, upon the request of any party hereto, the other parties shall
execute and deliver such instruments, documents and other writings as may be
reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Registration
Rights Agreement as of the day and year first above written.
VIAGRAFIX CORPORATION
By: /s/ XXXXXXX XXXXXXX
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Name: Xxxxxxx Xxxxxxx
Title: President
GEOCAPITAL III, L.P.
By: GEOCAPITAL MANAGEMENT, L.P.
By: /s/ XXXXXXXX X. XXXXXX
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General Partner
FOUNDERS:
/s/ XXXXXXX XXXXXXX
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Xxxxxxx Xxxxxxx
/s/ XXXXXX XXXXXXX
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Xxxxxx Xxxxxxx
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SCHEDULE A
INVESTORS
Name and Address
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GEOCAPITAL III, L.P.
Xxx Xxxxxx Xxxxx
Xxxxx Xxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxx
