REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of the ____ day of ______, 1997 by and between UNIDIGITAL INC.,
a Delaware corporation (the "Company"), and ________________________ (the
"Holder").
R E C I T A L S
---------------
A. The Holder and the Company are parties to that certain Promissory
Note of even date herewith (the "Promissory Note") pursuant to which the Holder
has agreed to extend a loan to the Company.
B. In partial consideration of the extension of the loan by the Holder
to the Company pursuant to the Note, the Company has issued to the Holder a
five-year warrant to purchase shares of common stock of the Company, par value
$0.01 per share ("Common Stock") on the terms and conditions set forth in that
certain Warrant between the Company and the Holder of even date herewith (the
"Warrant").
C. The Company desires to grant to the Holder the registration rights
set forth herein with respect to the shares of Common Stock for which may be
issued to the Holder pursuant to the Warrant.
1. REGISTRATION RIGHTS.
1.1 Definitions. For purposes of this Section 1:
(a) Registration. The terms "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act of 1933, as amended
(the "Securities Act"), and the declaration or ordering of effectiveness of such
registration statement.
(b) Registrable Securities. The term "Registrable
Securities" means: any shares of Common Stock of the Company issued or issuable
to the Holder pursuant to the Warrant; provided, however, that with respect to
any particular Registrable Security, such security shall cease to be a
Registrable Security when, as of the date of determination, (i) it has been
effectively registered under the Securities Act of 1933, as amended (the
"Securities Act") and disposed of pursuant thereto, (ii) registration under the
Securities Act is no longer required for the immediate public distribution of
such security or (iii) it has ceased to be outstanding. The term "Registrable
Securities" means any and/or all of the securities falling within the foregoing
definition of a "Registrable Security." In the event of any merger,
reorganization, consolidation, recapitalization or other change in corporate
structure affecting the Common Stock, such adjustment shall be made in the
definition of "Registrable Security" as is appropriate in order to prevent any
dilution or enlargement of the rights granted pursuant to the Agreement.
(c) SEC. The term "SEC" or "Commission" means the U.S.
Securities and Exchange Commission.
1.2 Registrations.
(a) Piggyback Registration Rights. The Company shall notify
the Holder in writing at least twenty (20) days prior to filing any registration
statement under the Securities Act for purposes of effecting a public offering
of securities of the Company (including, but not limited to, registration
statements relating to secondary offerings of securities of the Company, but
excluding registration statements relating to a merger, an acquisition or
pursuant to Form S-8 or successor form, collectively the "Excluded
Registrations") and will afford the Holder an opportunity to include in such
registration statement all or any part of the Registrable Securities then held
by the Holder. If the Holder desires to include in any such registration
statement all or any part of the Registrable Securities held by the Holder, it
shall, within twenty (20) days after receipt of the above-described notice from
the Company, so notify the Company in writing, and in such notice shall inform
the Company of the number of Registrable Securities the Holder wishes to include
in such registration statement. If the Holder decides not to include all of its
Registrable Securities in any registration statement thereafter filed by the
Company, the Holder shall nevertheless continue to have the right to include any
Registrable Securities in any subsequent registration statement or registration
statements as may be filed by the Company with respect to offerings of its
securities (other than with respect to Excluded Registrations), all upon the
terms and conditions set forth herein.
(b) Underwriting. If a registration statement under which
the Company gives notice under Section 1.2(a) is for an underwritten offering,
then the Company shall so advise the Holder in writing. In such event, the right
of the Holder to have its Registrable Securities included in a registration
pursuant to this Section 1.2(b) shall be conditioned upon the Holder's
participation in such underwriting and the inclusion of the Holder's Registrable
Securities in the underwriting to the extent provided herein. Notwithstanding
any other provision of this Agreement, if the managing underwriter or
underwriters determine(s) in good faith that marketing factors require a
limitation of the number of shares to be underwritten, then the managing
underwriter(s) may exclude shares (including Registrable Securities) from the
registration and the underwriting, and the number of shares that may be included
in the registration and the underwriting shall be allocated, first, to the
Company in full, and second, to the Holder and to any other security holders of
the Company whose securities are being offered for sale pursuant to such
registration statement or whose securities are required to be included in such
registration statement pursuant to registration rights granted to such security
holders by the Company (collectively, the "Other Holders") pro-rata based on the
total number of shares of Common Stock originally requested to be sold by the
Holder and the Other Holders pursuant to such registration statement. If the
Holder disapproves of the terms of any such underwriting, the Holder may elect
to withdraw therefrom by written notice to the Company and the underwriter,
delivered at least ten (10) business
2
days prior to the effective date of the registration statement. Any Registrable
Securities excluded or withdrawn from such underwriting shall be excluded and
withdrawn from the registration. The Holder hereby agrees that, in connection
with any underwritten offering by the Company, if requested by the managing
underwriter, it will not sell any of its Registrable Securities pursuant to a
registration statement in which it is not included pursuant to this Section 1.2,
for a period of up to six months from the effective date of any such
registration statement, without the prior written consent of the managing
underwriter, if any, of the public offering to which such registration statement
may relate. Further, in connection with any underwritten public offering of
Common Stock by the Company, the Holder shall enter into an underwriting
agreement in customary form with the managing underwriter or underwriters
selected for such underwriting.
(c) Expenses. All expenses incurred in connection with a
registration pursuant to Section 1.2(a) (excluding underwriters' and brokers'
discounts and commissions), including, without limitation all federal and "blue
sky" registration and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company and reasonable fees and
disbursements of counsel for the Holder, shall be borne by the Company. The
Holder shall bear its proportionate share (based on the total number of shares
sold in such registration) of all discounts, commissions or other amounts
payable to underwriters or brokers in connection with such registration.
1.3 Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities under this Agreement, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holder, keep such registration statement effective for up to ninety (90) days.
(b) 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 Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holder such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as the Holder may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by the Holder that are included in such registration.
(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 shall be reasonably requested by the
Holder, provided that the Company shall not be required in
3
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(e) 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(s) of such offering.
(f) Notify the Holder at any time when a prospectus relating
to such registration statement is required to be delivered under the Securities
Act of the happening of any event 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.
(g) Furnish, at the request of the Holder, on the date that
its Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective, (i) an opinion, dated as of
such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering and reasonably satisfactory to the Holder,
addressed to the underwriters, if any, and to the Holder, and (ii) a "comfort"
letter dated as of such date, from the independent certified public accountants
of the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering
and reasonably satisfactory to the Holder, addressed to the underwriters, if
any, and to the Holder requesting registration of Registrable Securities.
1.4 Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to Section 1.2 that
the Holder shall furnish to the Company such information regarding the Holder,
the Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to timely effect the registration of its
Registrable Securities.
1.5 Delay of Registration. The Holder shall not have any right
to obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
1.6 Indemnification. In the event any Registrable Securities are
included in a registration statement under Section 1.2:
(a) By the Company. To the extent permitted by law, the
Company shall indemnify and hold harmless the Holder or any underwriter (as
defined in the Securities Act)
4
for the Holder and each person, if any, who controls the Holder or underwriter
within the meaning of the Securities Act or the Securities Exchange Act of 1934,
as amended (the "1934 Act") (collectively, "Indemnitees"), against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Securities Act, the l934 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 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 or alleged violation by the Company
of the Securities Act, the 1934 Act, any federal or state
securities law or any rule or regulation promulgated under
the Securities Act, the 1934 Act or any federal or state
securities law in connection with the offering covered by
such registration statement;
and the Company will reimburse each of the Indemnitees for any legal or other
expenses reasonably incurred by them, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection
1.6(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 any information furnished
expressly for use in connection with such registration by any Indemnitee,
including without limitation, any information furnished by the Holder to the
Company pursuant to Section 1.4 hereof.
5
(b) By the Holder. To the extent permitted by law, the
Holder will indemnify and hold harmless the Company, each of its directors, each
of its officers who have signed the registration statement, and each person, if
any, who controls the Company within the meaning of the Securities Act or the
1934 Act (collectively, "Company Indemnitees"), against any losses, claims,
damages or liabilities (joint or several) to which the Company or any such
Company Indemnitee may become subject under the Securities Act, the 1934 Act or
other federal or state law, but only, 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 the Holder, and known by the Holder to be furnished, expressly for
use in connection with such registration, including without limitation any
information furnished by the Holder to the Company pursuant to Section 1.4
hereof; and the Holder will reimburse any legal or other expenses reasonably
incurred by the Company or any such Company Indemnitee as incurred in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
subsection 1.6(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; and
provided further, that the total amounts payable in indemnity by the Holder
under this Section 1.6(b) in respect of any Violation shall not exceed the net
proceeds received by the Holder in the registered offering out of which such
Violation arises.
(c) Notice. Promptly after receipt by an indemnified party
under this Section 1.6 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 1.6,
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 fees and expenses 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 conflict of 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 1.6, but 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 Section 1.6.
(d) Defect Eliminated in Final Prospectus. The foregoing
indemnity agreements of the Company and the Holder are subject to the condition
that, insofar as they relate to any Violation made in a preliminary prospectus
but eliminated or remedied in the amended prospectus on file with the SEC at the
time the registration statement in question becomes effective
6
or the amended prospectus filed with the SEC pursuant to SEC Rule 424(b) (the
"Final Prospectus), such indemnity agreement shall not inure to the benefit of
any person if a copy of the Final Prospectus was furnished to the indemnified
party and was not furnished to the person asserting the loss, liability, claim
or damage at or prior to the time such action is required by the Securities Act.
(e) Survival. The obligations of the Company and the Holder
under this Section 1.6 shall survive the completion of any offering of
Registrable Securities in a registration statement, and otherwise.
1.7 Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Registrable Securities to the public without
registration, the Company agrees to make and keep public information available,
as those terms are understood and defined in Rule 144 under the Securities Act,
and to use its best efforts to file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and
the 1934 Act.
2. ASSIGNMENT AND AMENDMENT.
2.1 Assignment. The registration rights granted to the Holder
shall not be assignable to any subsequent holder of the Registrable Securities.
2.2 Amendment of 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 of the Company and the Holder.
2.3 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed to
have been delivered when delivered personally (including by means of telex,
telecopier or telefax systems), or the day following delivery to a reputable
overnight courier service which guarantees delivery within 24 hours, charges
prepaid (or upon the date mailed, if sent certified mail, postage prepaid,
return receipt requested, and delivery is refused or returned as undeliverable)
to the parties to this Agreement as follows:
(a) If to the Company: Unidigital Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxx, President
with a copy to: Xxxxx X. Xxxxx, Esquire
Xxxxxxxx Xxxxxxxxx
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx Xxxxxxxxx Center
7
Xxxxxxxxx, XX 00000
(b) If to the Holder: __________________________
__________________________
__________________________
__________________________
with a copy to: _________________________________
__________________________
__________________________
or at such other address as any party may designate by giving ten (10) days
advance written notice to the other party.
2.4 Entire Agreement. This Agreement constitutes and contains
the entire agreement and understanding of the parties with respect to the
subject matter hereof and supersedes any and all prior negotiations,
correspondence, agreements, understandings, duties or obligations between the
parties respecting the subject matter hereof.
2.5 Governing Law. This Agreement shall be governed by and
construed exclusively in accordance with the internal laws of the State of New
York without regard to any law relating to conflict of laws and choice of law.
2.6 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, then such provision(s) shall
be excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
2.7 Third Parties. Nothing in this Agreement, express or
implied, is intended to confer upon any person, other than the parties hereto
and their successors and assigns, any rights or remedies under or by reason of
this Agreement.
2.8 Captions. The captions to sections of this Agreement have
been inserted for identification and reference purposes only and shall not be
used to construe or interpret this Agreement.
2.9 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.
2.10 Costs And Attorneys' Fees. In the event that any action,
suit or other proceeding is instituted concerning or arising out of this
Agreement or any transaction
8
contemplated hereunder, the prevailing party shall recover all of such party's
costs and attorneys' fees incurred in each such action, suit or other
proceeding, including any and all appeals or petitions therefrom.
* * * * * *
9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
THE COMPANY: THE HOLDER:
------------ -----------
UNIDIGITAL INC. [ ]
By:________________________ By:____________________________
Title:_____________________ Title:_________________________
10
SCHEDULE OF HOLDERS
-------------------
Principal Number of
Holder Amount of Note Warrants
------ -------------- ---------
CRM - 1997 Enterprise Fund LLC $ 200,000 20,000
CRM - Eurycleia, L.P. 200,000 20,000
CRM - U.S. Value Fund Ltd. 200,000 20,000
CRM - EFO Partners, L.P. 200,000 20,000
Xxxx Equity Partners 170,000 17,000
CRM - EFO 100,000 10,000
Xxxxxxx X. Xxxx 100,000 10,000
Dr. Xxxx Xxxx 100,000 10,000
Xxxxxxx Xxxxxxxxx c/o Xxxxxx
Xxxxxxxxx UGMA 50,000 5,000
Xxxxxx Xxxxxxxxxx 50,000 5,000
Xxxxxx Xxxxxxxx & Co. 30,000 3,000
---------- -------
TOTAL: $1,400,000 140,000
========== =======
