Exhibit 10.3
REGISTRATION RIGHTS and HOLDBACK AGREEMENT
This is a REGISTRATION RIGHTS AND HOLDBACK AGREEMENT, (the "Agreement")
dated as of July 12, 1996, by and between SPECTRA-PHYSICS, INC., a Delaware
corporation ("SPI") and PSC Inc., a New York corporation ("PSC").
WHEREAS, SPI, PSC and Spectra-Physics Holding, S.A., a French corporation,
have entered into an Asset and Stock Purchase Agreement (the "Purchase
Agreement"), dated May 20, 1996 pursuant to which SPI will receive 977,135
shares of Buyer's common stock, par value $.01 per share; and
WHEREAS, PSC wishes to grant to SPI registration rights for the shares of
common stock of PSC that SPI acquired pursuant to the Purchase Agreement, and
SPI is willing to agree to certain restrictions on the sale of such shares;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereby agree as follows:
1. Definitions.
As used herein, the following terms have the following respective meanings:
"Common Stock" means the common stock, par value $.01 per share, of PSC.
"Covered Shares" means the Registrable Securities of SPI included in a
registration statement pursuant to the terms hereof.
"Exchange Act" means the Securities and Exchange Act of 1934, as amended.
"Indemnified Party" has the meaning given to that term in Section 6 hereof.
"Indemnifying Party" has the meaning given to that term in Section 6
hereof.
"Lock-up Period" means the period beginning on the date hereof and ending
on the date that is the earlier of (i) one year from the date hereof or (ii) 180
days from the date of the consummation of the first public offering of equity
securities by PSC after the date hereof.
"Piggyback Registration" has the meaning given to that term in Section 3
hereof.
"Piggyback Registration Statement" means a registration statement of PSC
filed with the SEC on a form for which PSC then qualifies and which includes the
Registrable Securities to be registered for sale thereunder pursuant to Section
3 hereof, including post-effective amendments, in each case including the
prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"Registrable Securities" means (i) the shares of Common Stock received by
SPI pursuant to the Purchase Agreement and (ii) any Common Stock issued or
issuable with respect to the Registrable Securities by way of a stock dividend
or stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization. Any Registrable Security will
cease to be a Registrable Security when (i) a registration statement covering
such Registrable Security has been declared effective by the SEC and it has been
disposed of pursuant to such effective registration statement, (ii) it is sold
under circumstances in which all of the applicable conditions of Rule 144 are
met, or (iii) it has been otherwise transferred, PSC has delivered a new
certificate or other evidence of ownership for it not bearing any restrictive
legend citing the absence of registration thereof and it may be resold without
subsequent registration under the Securities Act.
"Registration Expenses" has the meaning given to that term in Section 12
hereof.
"Registration Statement" means any Piggyback Registration Statement or any
Shelf Registration Statement.
"Sec" means the U.S Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Purchase Agreements" shall mean those certain Securities
Purchase Agreements dated as of the date hereof by and between SpectraScan,
Inc., a Delaware corporation, PSC and the institutional investors named therein,
as such Securities Purchase Agreements exist on the date hereof.
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Statement" means a "shelf" registration statement of
PSC filed pursuant to the provisions of Section 2 hereof with the SEC which
covers all of the Registrable Securities on an appropriate form under Rule 415
under the Securities Act, or any similar rule that may be adopted by the SEC,
and any amendments and supplements to such registration statement, including
post-effective amendments, in each case including the prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
All capitalized terms used herein that are not otherwise defined herein
shall have the meanings ascribed thereto in the Purchase Agreement.
2. Shelf Registration.
(a) On or before 90 days after the date hereof, PSC shall file with the SEC
a Shelf Registration Statement relating to the offer and sale of the Registrable
Securities by SPI from time to time in accordance with the methods of
distribution elected by SPI and set forth in such Shelf Registration Statement
and, thereafter, shall use its best efforts to cause such Shelf Registration
Statement to be declared effective under the Securities Act as promptly as is
practicable after the date of filing of such Registration Statement.
(b) PSC shall use its best efforts to keep the Shelf Registration Statement
continuously effective in order to permit the prospectus forming a part thereof
to be useable by SPI for a period of three years from the date the Shelf
Registration Statement is declared effective or such shorter period that will
terminate when all Covered Shares have been sold pursuant to a Registration
Statement or otherwise cease to be Registrable Securities; provided that PSC's
obligation to keep the Shelf Registration Statement effective shall cease three
months after such time as SPI owns less than 10% of the Registrable Securities
it owns on the date hereof unless the reason SPI's ownership of Registrable
Securities fell below the 10% level was due to the "cut-back" provision
contained in the last sentence of Section 3(b) hereof. PSC shall be deemed not
to have used its best efforts to keep the Shelf Registration Statement effective
during the requisite period if PSC voluntarily takes any action that would
result in SPI not being legally permitted to offer and sell any Registrable
Securities during that period unless (i) such action is required by applicable
law, (ii) upon the occurrence of any event that requires a supplement or
amendment to the Shelf Registration Statement as described in Section 5(f) and
such action is taken by PSC in good faith and for valid business reasons or
(iii) the continued effectiveness of the Shelf Registration Statement would
require PSC to disclose a material financing, acquisition or other corporate
transaction and the Board of Directors of PSC shall have determined in good
faith that such disclosure is not in the best interests of PSC and its
stockholders, and, in the case of clause (i) or (ii) above, PSC thereafter
promptly complies with the requirement of paragraph 5(f) below.
3. Piggy-back Registration.
(a) Subject to the provisions of this Section 3, if PSC at any time
proposes to register any of its equity securities (as defined in the Exchange
Act) under the Securities Act, whether or not for sale for its own account
(other than pursuant to Section 2 hereof or other than pursuant to Section 11.1
of the Securities Purchase Agreements), and the registration form to be used may
be used for the registration of Registrable Securities, PSC each such time will
give written notice of such proposed filing to SPI as soon as practicable (but
in no event less than twenty days before the anticipated filing date), and such
notice shall offer SPI the opportunity to include such number of Registrable
Securities in the registration as SPI may request (the "Piggyback
Registration"); provided that SPI notify PSC of the amount of Registrable
Securities to be registered not less than ten days before the anticipated filing
date.
(b) PSC shall use its best efforts to cause the managing underwriter or
underwriters of a proposed underwritten offering to permit the Registrable
Securities requested to be included in the registration statement for such
offering on the same terms and conditions as any similar securities of PSC
included therein. Notwithstanding the foregoing, if the managing underwriter of
such registration advises PSC in writing (with a copy to SPI) that, in its
opinion, inclusion of the number of Registrable Securities requested to be
included in the registration would adversely affect the marketing of the
securities to be sold by PSC in such offering, then PSC will include in such
registration only the number of Registrable Securities recommended by the
managing underwriter that may be included without adversely affecting the
marketing of the securities to be sold by PSC in such offering provided that, if
any securities are being offered for the account of any person other than PSC
and the holders of the Registrable Securities, the reduction in the number of
Registrable Securities included in such registration shall not represent a
greater percentage of the amount of Registrable Securities originally requested
to be registered and sold in such registration than the lowest such percentage
reduction imposed upon any other person.
4. Lock-up And Holdback Agreements.
(a) Spi Lock-up. (i) During the Lock-up Period, without PSC's prior written
consent, SPI agrees not to effect any public sale or distribution of any of the
Registrable Securities except pursuant to an available Piggyback Registration.
(ii) If PSC enters into an underwriting agreement in connection with a firm
underwritten offering of shares of its Common Stock, SPI will not, if requested
by the managing underwriter for such offering and PSC, effect any public sale or
distribution of Common Stock during the 10 days prior to, and during the 90-day
period beginning on, the effective date of such registration statement.
(b) Psc Holdback. If SPI enters into an underwriting agreement in
connection with a firm underwritten offering of shares of Registerable
Securities (other than in connection with a Piggyback Registration), PSC will
not, if requested by the managing underwriter for such offering and SPI, effect
any public sale or distribution of any Common Stock or securities convertible
into or exchangeable or exercisable for such Common Stock (other than pursuant
to a registration statement on Form S-8 or any successor form), during the 10
days before, and during the 90-day period beginning on, the effective date of
such registration statement.
5. Registration Procedures.
Whenever SPI has requested that any Registrable Securities be registered
pursuant to Sections 2 or 3 hereof, PSC will use its reasonable best efforts to
effect the registration of such Registrable Securities in accordance with the
intended method of disposition thereof as promptly as practicable, and in
connection with any such registration, PSC will as expeditiously as possible
(Provided that nothing contained herein prohibits PSC from abandoning a
registration in which SPI has requested to participate pursuant to Section 3
hereof):
(a) with regard to a Piggyback Registration and, subject to the provisions
of Section 2, with regard to the Shelf Registration, prepare and file with the
SEC a Registration Statement and use its best efforts to cause such filed
Registration Statement to become effective; Provided that (i) before filing a
Registration Statement or prospectus or any amendments or supplements thereto,
PSC will furnish to one counsel selected by SPI copies of all such documents
proposed to be filed sufficiently in advance of filing to provide such counsel
with a reasonable opportunity to review such documents and comment thereon and
(ii), after the filing of the Registration Statement, PSC will promptly notify
SPI of any stop order issued or, to the knowledge of PSC, threatened by the SEC
and take all reasonable actions required to prevent the entry of such stop order
or to remove it if entered;
(b) prepare and file with the SEC such amendments and supplements to the
Registration Statement and the prospectus used in connection therewith as may be
necessary to (i) keep the Registration Statement effective for a period which
will terminate when all Covered Shares have been sold and (ii) comply with the
provisions of the Securities Act with respect to the disposition of all Covered
Shares during such period in accordance with the intended methods of disposition
by SPI thereof set forth in the Registration Statement, including without
limitation, such amendments and supplements to the Shelf Registration Statement
and related prospectus as may be necessary to permit Covered Shares to be sold
pursuant thereto in an underwritten offering;
(c) furnish to SPI, before filing the Registration Statement, if requested,
copies of the Registration Statement as proposed to be filed, and thereafter
furnish to SPI such number of copies of the Registration Statement, each
amendment and supplement thereto (in each case including all exhibits thereto),
the prospectus included in the Registration Statement (including each
preliminary prospectus) and such other document as SPI may reasonably request in
order to facilitate the disposition of the Covered Shares owned by SPI;
(d) use its best efforts to register or qualify the Covered Shares under
such other securities or blue sky laws of such jurisdictions in the United
States as SPI reasonably (in light of SPI's intended plan of distribution)
requests and do any and all other acts and things which may be reasonably
necessary or advisable to enable SPI to consummate the disposition in such
jurisdictions of its Covered Shares; provided that PSC will not be required to
(i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph (d), (ii) subject itself
to taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction;
(e) use its best efforts to cause the Covered Shares to be registered with
or approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of PSC to enable SPI to
consummate the disposition of the Covered Shares;
(f) notify SPI of the occurrence of an event requiring the preparation of a
supplement or amendment to a Registration Statement or a prospectus contained
therein so that, as thereafter delivered to the purchasers of such Covered
Shares, a Registration Statement or such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and
promptly make available to SPI any such supplement or amendment;
(g) enter into customary agreements (including an underwriting agreement in
customary form if the distribution of the Covered Shares is otherwise to be made
in an underwritten offering) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such Covered
Shares;
(h) make available for inspection by SPI, any underwriter participating in
any disposition pursuant to such Registration Statement and any attorney,
accountant or other professional retained by SPI or underwriter (collectively,
the "Inspectors"), all financial and other records, pertinent corporate
documents and properties of PSC (collectively, the "Records") as are reasonably
necessary to enable them to exercise due diligence, and cause PSC's officers,
directors and employees to supply all information reasonably requested by any
such Inspectors in connection with the Registration Statement;
(i) in the event an offering of Registrable Securities is pursuant to an
underwritten offering, use its best efforts to obtain a comfort letter or
comfort letters from PSC's independent public accountants in customary form and
covering such matters of the type customarily covered by comfort letters as the
managing underwriter reasonably requests;
(j) otherwise use its best efforts to comply with all applicable rules and
regulations of the SEC, and make generally available to its security holders, as
soon as reasonably practicable, an earnings statement satisfying the provisions
of Section 11(a) of the Securities Act and covering a period of twelve months,
beginning within three months after the effective date of the registration
statement;
(k) use its best efforts to cause all Covered Shares to be listed on the
NASDAQ National Market or listed on each national securities exchange on which
the Common Stock is then listed; and
(l) provide a transfer agent and registrar for all of the Covered Shares
not later than the effective date of such Registration Statement.
6. Indemnification.
(a) Indemnification by PSC. PSC agrees to indemnify and hold harmless SPI,
its officers, directors, employees and agents, and each Person, if any, who
controls SPI within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act against any and all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation) arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or prospectus relating to the Covered
Shares, in any amendment or supplement thereto, in any preliminary prospectus,
or arising out of or based upon any omission or any alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of, or are based upon, any such
untrue statement or omission or allegation thereof based upon information
furnished in writing to PSC by SPI or on SPI's behalf expressly for use therein.
(b) Indemnification By Spi. SPI agrees to indemnify and hold harmless PSC,
its directors and officers and each party, if any, who controls PSC within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from PSC to SPI, but only with
respect to information furnished in writing by SPI or on SPI's behalf expressly
for use in any Registration Statement or prospectus relating to the Covered
Shares, or any amendment or supplement thereto, or any preliminary prospectus.
(c) Conduct Of Indemnification Proceedings. If any action or proceeding
(including any governmental investigation) is brought or asserted against any
party entitled to indemnification under clauses (a) or (b) above (an
"Indemnified Party") in respect of which indemnity may be sought from any party
who has agreed to provide such indemnification (an "Indemnifying Party"), the
Indemnifying Party will assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Party, and will assume the
payment of all expenses. Such Indemnified Party will have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel will be at the expense of such
Indemnified Party unless (i) the Indemnifying Party has agreed to pay such fees
and expenses or (ii) the named parties to any such action or proceeding
(including any impleaded parties) include both such Indemnified Party and the
Indemnifying Party, and such Indemnified Party has been advised by counsel that
there is a conflict of interest on the part of counsel employed by the
Indemnifying Party to represent such Indemnified Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party will not have the right to assume the defense of such action
or proceeding on behalf of such Indemnified Party; it being understood, however,
that the Indemnifying Party will not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (together with appropriate local counsel) at any time for all
such Indemnified Parties). The Indemnifying Party will not be liable for any
settlement of any such action or proceeding effected without its written
consent, but if settled with its written consent, or if there is a final
judgment for the plaintiff in any such action or proceeding, the Indemnifying
Party will indemnify and hold harmless such Indemnified Parties from and against
any loss or liability (to the extent stated above) by reason of such settlement
or judgment.
7. Contribution.
If for any reason the indemnification provided for in the preceding
Sections 6(a) and 6(b) is unavailable to an Indemnified Party as contemplated by
those sections, then the Indemnifying Party will contribute to the amount paid
or payable by the Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by the Indemnified Party and the Indemnifying Party, but also
the relative fault of the Indemnified Party and the Indemnifying Party, as well
as any other relevant equitable considerations, Provided that SPI will not be
required to contribute in an amount greater than the difference between the net
proceeds received by SPI with respect to the sale of any Registrable Securities
and all amounts already contributed by SPI with respect to such claims.
8. Participation In Underwritten Registrations.
With regard to a Piggyback Registration, SPI may not participate in any
underwritten registration hereunder unless SPI (a) agrees to sell its securities
on the basis provided in any underwriting arrangements approved by the parties
entitled to approve such arrangements; and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and this Agreement. Notwithstanding the previous sentence, SPI
shall not be required to make any representations or warranties to, or make any
agreements with, PSC or any underwriter other than representations, warranties
or agreements customary for a non-controlling selling shareholder selling shares
under similar circumstances. In the event that the Covered Shares included in a
Shelf Registrations Statement are to be sold pursuant to an underwritten
offering the managing underwriter for such offering shall be a nationally
recognized investment banking firm selected by SPI and be reasonably acceptable
to PSC.
9. Rule 144.
PSC covenants that it will file any reports required to be filed by it
under the Securities Act and the Exchange Act so as to enable SPI to sell Common
Stock without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144. Upon the request of SPI, PSC will deliver to
SPI a written statement as to whether it has complied with such requirements.
10. Information.
PSC may require SPI to promptly furnish in writing to PSC such information
regarding the distribution of the Registrable Securities as it may from time to
time reasonably request and such other information as may be legally required or
reasonably requested in connection with such registration.
11. Amended Or Supplemented Prospectus.
SPI agrees that, upon receipt of any notice from PSC of the happening of
any event of the kind described in Section 5(f) hereof, SPI will forthwith
discontinue disposition of any Covered Shares pursuant to the Registration
Statement covering such Covered Shares until SPI's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 5(f) hereof, and, if
so directed by PSC, SPI will deliver to PSC all copies, other than permanent
file copies then in SPI's possession, of all prospectuses covering such Covered
Shares at the time of receipt of such notice, and shall not effect any
transaction with respect to any Covered Shares except pursuant to the
supplemented or amended prospectus. In the event PSC gives such notice, PSC will
extend the period during which such Registration Statement will be maintained
effective by the number of days during the period from and including the date of
the giving of notice pursuant to Section 5(f) hereof to the date when PSC makes
available to SPI a prospectus supplemented or amended to conform with the
requirements of Section 5(f) hereof.
12. Registration Expenses.
In connection with any Registration Statement filed pursuant to Section 2
or Section 3 hereof, PSC will pay all registration expenses (the "Registration
Expenses"), including but not limited to: (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws, subject
to the provisions of Section 5(d), (including reasonable fees and disbursements
of counsel in connection with blue sky qualifications of the Covered Shares),
(iii) printing expenses, (iv) internal expenses of PSC (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), (v) the fees and expenses incurred in connection
with the listing of the Covered Shares, (vi) fees and disbursements of counsel
for PSC and customary fees and expenses for independent certified public
accountants retained by PSC (including the expenses of any comfort letters or
costs associated with the delivery by independent certified public accountants
of a comfort letter or comfort letters requested pursuant to Section 5(i)
hereof), (vii) the fees and expenses of any special experts retained by PSC in
connection with such registration, and (viii) reasonable fees and expenses of
one law firm (designated by SPI and reasonably acceptable to PSC) acting as
counsel for SPI in connection with the registration hereunder; provided,
however, PSC will not have any obligation to pay any underwriting fees,
discounts or commissions attributable to the sale of Covered Shares (which will
be the obligation of SPI) or, except as otherwise provided in clause (viii)
above, any out-of-pocket expenses of SPI (or any agents who manage its accounts)
or fees and disbursements of any counsel for any underwriter in any underwritten
offering.
13. Registration Rights.
PSC agrees that it will not enter into any agreement or arrangements which
would grant any party a right to participate in any registration that is
superior to or in contravention of the rights to participate set forth in this
Agreement.
14. Parties In Interest.
All covenants and agreements contained in this Agreement by or on behalf of
either party hereto shall bind and inure to the benefit of the respective
successors and assigns of such party hereto, whether so expressed or not,
including subsequent holders of Registrable Securities.
15. Notices.
All notices, requests, consents and other communications hereunder shall be
in writing and shall be mailed by first-class registered mail, postage prepaid,
or sent by recognized courier service addressed as follows:
(a) if to PSC:
PSC Inc.
675 Basket Road
Webster, NY 14580
Telephone: (716) 265-1600
Fax: (716) 265-6402
Attention: William J. Woodard, Vice-President -
Finance
with a copy to:
Boylan, Brown, Code, Fowler, Vigdor
& Wilson, LLP
2400 Chase Square
Rochester, NY 14604
Telephone: (716) 232-5300
Fax: (716) 232-3528
Attention: Martin S. Weingarten, Esq.
(b) if to SPI:
Spectra-Physics, Inc.
108 Webster Building
3411 Silverside Road
Wilmington, DE 19810
Telephone: (302) 478-4600
Fax: (302) 478-8962
Attn: Ms. Barbara Schoenberg
with copies to:
Spectra-Physics AB
Box 5226
Sturegatan 32
Fourth Floor
S-102 45 Stockholm, Sweden
Telephone: 011-468-783-0725
Fax: 011-468-660-9226
Attn: Mr. Ulf Johansson
and
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attention: Carmen J. Romano, Esquire;
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others.
16. Law Governing.
This agreement shall be governed by and construed in accordance with the
laws of the state of New York.
17. Entire Agreement.
This Agreement constitutes the entire Agreement of the parties with respect
to the subject mater hereof and may not be modified or amended except in
writing.
18. Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together constitute one and the
same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
SPECTRA-PHYSICS, INC.
/s/ Lennart Rappe
By: Lennart Rappe
Title: Authorized Representative
PSC INC.
/s/ William J. Woodard
By: William J. Woodard
Title: Vice President - Finance