Exhibit 10.2.3
REGISTRATION AGREEMENT
THIS REGISTRATION AGREEMENT is made as of January 3, 1996 by and between
Numatics, Incorporated, a Michigan corporation (the "Company"), and Harvard
Private Capital Holdings, Inc., or registered assigns (collectively, the
"Purchaser").
RECITALS
A. The Company and the Purchaser have entered into the Securities
Purchase Agreement of even date herewith (as from time to time in effect, the
"Securities Purchase Agreement") for sale by the Company and purchase by the
Purchaser of certain of the Company's securities.
B. In connection with the purchase and sale of the Company's securities,
the Company and the Purchaser desire to provide for the registration of the
Common Stock to be issued upon exercise or conversion of the Warrants according
to the terms of this Agreement.
NOW THEREFORE, the parties agree as follows:
1. Certain Definitions. Terms defined in the Securities Purchase
Agreement and not otherwise defined herein are used herein with the meaning so
defined. In addition to terms otherwise defined herein, as used in this
Agreement, the following terms shall have the following respective meanings:
"Holder" shall mean the Purchaser (and its transferees as permitted by
Section 11) holding Registrable Securities or securities convertible into, or
exercisable or exchangeable for, Registrable Securities.
"Initiating Holders" shall mean Holders who in the aggregate hold greater
than fifty percent (50%) of the Registrable Securities.
"Initial Public Offering" shall mean a distribution of shares of Common
Stock pursuant to an effective registration statement filed pursuant to the
Securities Act or the effectiveness of a registration statement with respect to
Common Stock under Section 12 of the Exchange Act.
"NASD" shall mean The National Association of Securities Dealers, Inc.
"Other Holders" shall mean holders of Company securities, other than the
Holders, proposing to distribute their securities pursuant to a registration
under this Agreement.
"Public Offering" shall mean a public offering of Common Stock pursuant to
an effective registration statement on Form S-1, S-2 or S-3 (or any successor
form or other form which would permit the public sale of Registrable Securities
pursuant thereto).
"Registrable Securities" shall mean Common Stock issued or issuable on
exercise or conversion of the Warrants and any shares of Common Stock issued or
issuable in respect of such Common Stock upon any stock split, stock dividend,
recapitalization, or similar event. Shares of Common Stock shall only be
treated as Registrable Securities if they have not been sold in a Public Sale.
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses incident to the Company's
performance of or compliance with Section 2, 3 and 4 hereof, including without
limitation all registration, filing and NASD fees, all fees and expenses of
complying with securities or blue sky laws, all printing expenses, messenger and
delivery expenses, the fees and disbursements of counsel for the Company and of
its independent public accountants, including the expenses of any special audits
and/or "cold comfort" letters required by or incident to such performance and
compliance, the fees and disbursements of a single counsel retained by the
holders of the Registrable Securities being registered and any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding underwriting discounts and commissions and transfer
taxes, if any, provided that, in any case where Registration Expenses are not to
be borne by the Company, such expenses shall not include salaries of Company
personnel or general overhead expenses of the Company, and shall not include
auditing fees (except solely to the extent that such fees would not have been
incurred but for the filing of the applicable registration statement), premiums
or other expenses relating to liability insurance for the Company and its
officers and directors required by underwriters or the Company, or other
expenses for the preparation of financial statements or other data normally
prepared by the Company in the ordinary course of its business or which the
Company would have incurred in any event.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holders.
2. Requested Registrations.
(a) Request for Registration. If an Initial Public Offering has occurred
and if the Company shall receive from Initiating Holders a written request that
the Company effect any registration, qualification or compliance with respect to
not less than twenty percent (20%) of the
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Registrable Securities, and specifying the intended method of disposition
thereof, the Company will:
(i) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders; and
(ii) as soon as practicable, use its best efforts to effect such
registration, qualification or compliance (including, without limitation,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act and any other Legal Requirements) as may be so requested and as
would permit or facilitate the sale and distribution of all or such portion of
such Registrable Securities as are specified in such request, together with all
or such portion of the Registrable Securities of any Holder or Holders joining
in such request as are specified in a written request received by the Company
within twenty (20) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to take any action to
effect any such registration, qualification or compliance pursuant to this
Section 2:
(A) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction, provided that the Company shall execute any
such general consent which is required under the Securities Act;
(B) If, within ten (10) days of the Company's receipt of a request
for registration pursuant to this Section 2, the Company shall furnish to such
Holders a certificate signed by the President of the Company stating that the
Board of Directors has authorized the Company to file a registration statement
pertaining to securities of the Company sold by the Company (other than a
registration of securities in a Rule 145 transaction or with respect to an
employee plan), then during the period starting with the date sixty (60) days
prior to the Company's estimated date of filing of (which shall be not more than
ninety (90) days after the Company's receipt of such request from the Initiating
Holders), and ending on the date six (6) months immediately following the
effective date of, such registration statement, provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective; or
(C) If, within ten (10) days of the Company's receipt of a request
for registration pursuant to this Section 2, the Company shall furnish to such
Holders a certificate signed by the President of the Company stating that in the
good faith judgment of the Board of Directors it would be materially detrimental
to the Company or its shareholders for a registration statement to be filed in
the near future, then the Company's obligation to use its best efforts to
register, qualify or comply under this Section 2 shall be deferred for a period
not to exceed ninety (90) days from the date of receipt of written request from
the Initiating Holders, provided that the Company shall not utilize this right
more than once in any twelve (12) month period.
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Subject to the foregoing clauses (A) through (C), the Company shall
file a registration statement covering the Registrable Securities so requested
to be registered as soon as reasonably practicable, after receipt of the request
or requests of the Initiating Holders.
(b) Underwriting. In the event that a registration pursuant to Section 2
is for a Public Offering involving an underwriting, the Company shall so advise
the Holders as part of the notice given pursuant to Section 2(a)(i). In such
event, the right of any Holder to registration pursuant to Section 2 shall be
conditioned upon such Holder's participation in the underwriting arrangements
required by this Section 2, and the inclusion of such Holder's Registrable
Securities in the underwriting to the extent requested shall be limited to the
extent provided herein.
If requested registration pursuant to Section 2 involves an
underwritten offering, the underwriter or underwriters thereof shall be selected
by the holders of more than 50% of the Registrable Securities as to which
registration has been requested and shall be acceptable to the Company, which
shall not unreasonably withhold its acceptance of such underwriters.
If requested by the underwriters for any underwritten offering by
holders of Registrable Securities pursuant to a registration requested under
Section 2 hereof, the Company will enter into an underwriting agreement with
such underwriters for such offering, such agreement to contain such
representations and warranties by the Company and such other terms and
provisions as are customarily contained in agreements of that type, including
without limitation indemnities to the effect and to the extent provided in
Section 8 hereof. The holders of Registrable Securities which are to be
distributed by such underwriters shall be parties to such underwriting agreement
and may, at their option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
such holders of Registrable Securities and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of such holders of
Registrable Securities. Such holders of Registrable Securities shall not be
required to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or agreements
regarding such holders and such holders' intended methods of distribution.
Registrations under Section 2 shall be on such appropriate
registration form of the Commission as shall be selected by the holders of more
than 50% of the Registrable Securities so to be disposed of, and as shall permit
the disposition of such Registrable Securities in accordance with the intended
method or methods of disposition specified in their request for such
registration. The Company agrees to include in any such registration statement
all information which holders of Registrable Securities being registered shall
reasonably request.
The Company shall not be required to effect more than one registration
pursuant to this Section 2. A registration requested pursuant to this Section 2
will not be deemed to have been effected: (i) unless it has become effective,
provided that a registration which does not
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become effective after the Company has filed a registration statement with
respect thereto solely by reason of the refusal to proceed of the holders of
Registrable Securities who initially requested registration of Registrable
Securities shall be deemed to have been effected by the Company at the request
of such holders, unless such holders shall have elected to pay all Registration
Expenses in connection with such registration; or (ii) if, after it has become
effective and prior to the completed distribution of all Registrable Securities
registered thereby, such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or of any court which is not subsequently lifted so as to permit the
distribution of Registrable Securities to continue under such registration in a
manner that is not materially adverse to the sellers of Registrable Securities
in such distribution compared to what would have prevailed had such interference
not occurred.
If a requested registration pursuant to Section 2 involves an
underwritten offering, and the managing underwriter shall advise the Company in
writing (with a copy to each Holder of Registrable Securities requesting
registration) that, in its opinion, the number of securities requested to be
included in such registration (including securities of the Company which are not
Registrable Securities) exceeds the number which can be sold in such offering,
the Company will include in such registration to the extent of the number which
the Company is so advised can be sold in such offering: (i) first, all
Registrable Securities requested to be included in such registration by the
Holder or Holders of Registrable Securities (or if the number of Registrable
Securities required to be so included exceeds the number of specified by such
managing underwriter as being able to be sold in such offering, then pro rata
among such holders on the basis of the number of Registrable Securities
requested to be included by such holders), and (ii) second, to the extent of any
remaining excess, securities the Company proposes to sell and other securities
of the Company included in such registration by the holders thereof.
If any Holder of Registrable Securities or Other Holder disapproves of
the terms of the underwriting, such person may elect to withdraw therefrom by
written notice to the Company, the managing underwriter and the Initiating
Holders. The Registrable Securities and/or other securities so withdrawn shall
also be withdrawn from registration.
3. Company Registration.
(a) Notice of Registration. If at any time or from time to time the
Company shall determine to effect a Public Offering, either for its own account
or the account of a security holder or holders, the Company will:
(i) promptly give to each Holder written notice thereof; and
(ii) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting involved therein,
all the Registrable Securities specified in a written request or requests, made
within twenty (20) days after receipt of such written notice from the Company,
by any Holder.
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(b) Underwriting. If the Public Offering of which the Company gives
notice involves an underwriting, the Company shall so advise the Holders as a
part of the written notice given pursuant to Section 3(a)(i). In such event the
right of any Holder to registration pursuant to Section 3 shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting
shall, together with the Company and the Other Holders, enter into an
underwriting agreement in customary form with the managing underwriter selected
for such underwriting by the Company and may, at their option, require that any
or all of the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters shall also be
made to and for the benefit of such Holders and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Holders. Holders shall not be required to make any representations or warranties
to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such Holders and such
Holders' intended methods of distribution. Notwithstanding any other provision
of this Section 3, if the managing underwriter determines that marketing factors
require a limitation of the number of shares to be underwritten, the managing
underwriter may limit the Registrable Securities and other securities to be
included in such registration. The Company shall so advise all Holders and Other
Holders and the number of shares that may be included in the registration and
underwriting by all Holders and Other Holders shall be allocated among them, as
nearly as practicable, first, to the Company, and, second, among the Holders of
Registrable Securities and the Other Holders in proportion to the number of
shares of Common Stock proposed to be included in such registration by such
Holders and Other Holders. If any Holder or Other Holder disapproves of the
terms of any such underwriting, he may elect to withdraw therefrom by written
notice to the Company and the managing underwriter. Any securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
(c) Right to Terminate Registration. The Company shall have the right to
terminate or withdraw any registration initiated by it under this Section 3
prior to the effectiveness of such registration whether or not any Holder has
elected to include Registrable Securities in such registration, without
prejudice, however, to the rights of any holder or holders of Registrable
Securities entitled to do so to request that such registration be effected as a
registration under Section 2.
(d) No registration effected pursuant to a request or requests referred to
in Section 3 shall be deemed to have been effected pursuant to Section 2.
4. Registration on Form S-3.
(a) Request for Registration. If any Holder or Holders request that the
Company file a registration statement on Form S-3 (or any successor form to Form
S-3) for a Public Offering of Registrable Securities the reasonably anticipated
aggregate price to the public of which would
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exceed $1,500,000, and the Company is a registrant entitled to use Form S-3 to
register the Registrable Securities for such an offering, the Company shall use
its best efforts to cause such Registrable Securities to be registered for the
offering on such form and to cause such Registrable Securities to be qualified
in such jurisdictions as the Holder or Holders may reasonably request. The
substantive provisions of Section 2(b) hereof shall be applicable to each
registration initiated under this Section 4.
(b) Limitations. Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this Section 4: (i) in any particular
jurisdiction in which the Company would be required to execute a general consent
to service of process in effecting such registration, qualification or
compliance unless the Company is already subject to service in such
jurisdiction, provided that the Company shall execute any such general consent
which is required under the Securities Act; (ii) if, within ten (10) days of the
Company's receipt of a request for registration pursuant to this Section 4, the
Company shall furnish to such Holders a certificate signed by the President of
the Company stating that the Board of Directors has authorized the Company to
file a registration statement pertaining to securities of the Company sold by
the Company (other than a registration of securities in a Rule 145 transaction
or with respect to an employee plan), then during the period starting with the
date sixty (60) days prior to the Company's estimated date of filing of (which
shall be not more than ninety (90) days after the Company's receipt of such
request from the Initiating Holders), and ending on the date six (6) months
immediately following the effective date of, such registration statement,
provided that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective; or (iii) if,
within ten (10) days of the Company's receipt of a request for registration
pursuant to this Section 4, the Company shall furnish to such Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors it would be materially detrimental to
the Company or its shareholders for a registration statement to be filed in the
near future, then the Company's obligation to use its best efforts to register,
qualify or comply under this Section 4 shall be deferred for a period not to
exceed ninety (90) days from the date of receipt of written request from the
Initiating Holders, provided that the Company shall not utilize this right more
than once in any twelve (12) month period.
5. Limitations on Subsequent Registration Rights. From and after the date
hereof, the Company will not, without the prior written consent of holders of a
majority of the aggregate voting power of the then outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company which allows such holder or prospective holder of
any securities of the Company to include such securities in any registration
filed under Sections 2, 3 or 4 hereof, unless, under the terms of such
agreement, such holder or prospective holder may include such securities in any
such registration only to the extent that the inclusion of his securities will
not diminish the amount of Registrable Securities which are included to less
than the pro rata amount specified in Section 3(b) hereof. However, the Company
may by agreement grant such holder or prospective holder a registration right
analogous to that set forth in Section 2 provided that the Registrable
Securities may be included in any such
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registration demanded by such holders to the extent such inclusion will not
diminish the amount of securities of such holders which are included.
6. Expenses of Registration.
(a) Registration Expenses. The Company shall bear all Registration
Expenses incurred in connection with all registrations pursuant to Section 3
hereof. The Company shall bear 50% of the Registration Expenses relating to the
registration effected pursuant to Sections 2 or 4 hereof. The Holders shall bear
all Registration Expenses relating to registrations pursuant to Section 2 and 4
hereof of securities registered on behalf of the Holders which are not so borne
by the Company pro rata on the basis of the number of shares so registered.
(b) Selling Expenses. Unless otherwise stated, all Selling Expenses
relating to securities registered on behalf of the Holders pursuant to this
Agreement shall be borne the Holders pro rata on the basis of the number of
shares so registered.
7. Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will:
(a) prepare and file with the Commission (in the case of a registration
pursuant to Section 2, such filing to be made within ninety (90) days after the
initial request of Holders or in any event as soon thereafter as reasonably
practicable) the requisite registration statement with respect to such
Registrable Securities (including such audited financial statements as may be
required by the Securities Act or the rules and regulations promulgated
thereunder) and use its best efforts to cause such registration statement to
become and remain effective, provided that at least 5 days before filing such
registration statement or any amendments thereto, the Company will furnish to
the counsel selected by the Holders of Registrable Securities which are to be
included in such registration copies of all such documents proposed to be filed,
which documents will be subject to the review of such counsel;
(b) prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to maintain the effectiveness of such registration statement
and to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement until the
earlier of such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement or (i) in the case of a
registration pursuant to Section 2 or 4 hereof the expiration of 120 days after
such registration statement becomes effective (unless such registration is
pursuant to Section 4 hereof and is a continuous offering described in Rule 415
under the Securities Act, in which event such period shall be two (2) years
after such effectiveness), or (ii) in the case of a registration pursuant to
Section 3 hereof , the expiration of 90 days after such registration statement
becomes effective, provided that if less than all the Registrable Securities are
withdrawn from registration after the expiration of the relevant period, the
shares to be so
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withdrawn shall be allocated pro rata among the holders thereof on the basis of
the respective numbers of Registrable Securities held by them included in such
registration;
(c) furnish to each seller of Registrable Securities covered by such
registration statement and each underwriter, if any, of the securities being
sold by such seller such number of copies of such registration statement and of
each such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus and supplements thereto
included in such registration statement (including each preliminary prospectus
and any summary prospectus), in conformity with the requirements of the
Securities Act, and such other documents, as such seller or underwriter, if any,
may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities owned by such seller;
(d) use its best efforts to register or qualify all Registrable Securities
covered by such registration statement under such other securities laws or blue
sky laws of such jurisdictions as any seller or any underwriter, if any, of the
securities being sold by such seller shall reasonably request, to keep such
registrations or qualifications in effect for so long as the registration
statement remains in effect and do any and all other acts and things which may
be necessary or advisable to enable such seller and underwriter, if any, to
consummate the disposition in such jurisdictions of such Registrable Securities
owned by such seller, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this clause (d) be
obligated to be qualified, to subject itself to taxation in any such
jurisdiction or to consent to general service of process in any such
jurisdiction;
(e) use its best efforts to cause all Registrable Securities covered by
such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the seller or
sellers thereof to consummate the disposition of such Registrable Securities,
except that the Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction wherein it
would not but for the requirements of this clause (e) be obligated to be
qualified, to subject itself to taxation in any such jurisdiction or to consent
to general service of process in any such jurisdiction;
(f) notify each seller of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the Company's becoming
aware that the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and
promptly prepare and furnish to each seller and each underwriter, if any, a
reasonable number of copies of a prospectus supplemented or amended so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not include an untrue statement of a material fact or omit 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;
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(g) advise each seller of Registrable Securities covered by such
registration statement, promptly after it receives notice thereof, of the time
when such registration statement, or any amendment thereto, or any amendment to
such registration statement have become effective or any related prospectus or
any supplement to such prospectus or any amendment to such prospectus has been
filed, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any related preliminary prospectus or
prospectus, of the suspension of the qualification of such Registrable
Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of such registration statement or
prospectus or for additional information; and in the event of the issuance of
any stop order or of any order preventing or suspending the use of any such
preliminary prospectus or prospectus or suspending any such qualification, to
use promptly its best efforts to obtain withdrawal of such order;
(h) file promptly all documents required to be filed with the Commission
pursuant to Sections 13, 14 or 15(d) of the Exchange Act subsequent to the time
such registration statement becomes effective and during any period when any
related prospectus is required to be delivered;
(i) otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months, beginning with the first
day of the Company's first calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act;
(j) provide a transfer agent and registrar for all such Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement;
(k) enter into such agreements, including without limitation underwriting
agreements, and take such other actions as sellers holding more than 50% of the
Registrable Securities so to be sold shall reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities;
(l) use its best efforts to furnish to each seller of Registrable
Securities a signed counterpart, addressed to such seller (and the underwriters,
if any), of
(i) an opinion of counsel for the Company, dated the effective date
of such registration statement (and, if such registration includes an
underwritten Public Offering, an opinion dated the date of each closing
under the underwriting agreement); and
(ii) to the extent available under the rules relating to such
accountants, a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an underwritten
Public Offering, a letter dated the date of each closing under the
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underwriting agreement), signed by the independent public accountants who
have certified the Company's financial statements included in such
registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to the underwriters in underwritten Public
Offerings of securities and, in the case of the accountants' letter, such other
financial matters, as such seller (or the underwriters, if any) may reasonably
request;
(m) give a single representative of the holders of Registrable Securities
whose Registrable Securities are registered under such registration statement
and their underwriters, if any, and their respective counsel and accountants,
the opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the Commission, and
each amendment thereof or supplement thereto, and give each of them such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of the respective counsel of such holders and
such underwriters, to conduct a reasonable investigation within the meaning of
the Securities Act, and such other access and information as may be reasonably
requested; and
(n) use its best efforts to list all Registrable Securities covered by such
registration statement on each securities exchange on which any of the
securities of the same class as the Registrable Securities are then listed.
Each holder of Registrable Securities shall be deemed to have agreed by
acquisition of such Registrable Securities that upon receipt of any notice from
the Company of the occurrence of any event of the kind described in clause (f)
of this Section 7, such holder will forthwith discontinue such holder's
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such holder's receipt of the copies
of the supplemented or amended prospectus contemplated by clause (f) of this
Section 7 and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such holder's possession of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company shall
give any such notice, the period mentioned in clause (b) of this Section 7 shall
be extended by the length of the period from and including the date when the
Company shall have given such notice to and including the date when each seller
of any Registrable Securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated by
clause (f) of this Section 7.
If any such registration or comparable statement refers to any holder by
name or otherwise as the holder of any securities of the Company then such
holder shall have the right to require (i) the insertion therein of language, in
form and substance satisfactory to such holder, to the effect that the holding
by such holder of such securities is not to be construed as a recommendation by
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such holder of the investment quality of the Company's securities covered
thereby and that such holding does not imply that such holder will assist in
meeting any future financial requirements of the Company, or (ii) in the event
that such reference to such holder by name or otherwise is not required by the
Securities Act or any similar federal statute then in force, the deletion of the
reference to such holder. The Company may require each seller of Registrable
Securities as to which any registration is being effected to furnish the Company
such information regarding such seller and the distribution of such securities
as the Company may from time to time reasonably request in writing.
8. Indemnification.
(a) By Company. The Company will indemnify each Holder, each of its
officers, directors, shareholders, agents and partners, and each Person
controlling such Holder within the meaning of Section 15 of the Securities Act,
with respect to which registration, qualification or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
Person who controls any underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, or any violation by the Company of the
Securities Act or any rule or regulation promulgated under the Securities Act
applicable to the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse each such Holder,
each of its officers, directors, shareholders, agents and partners, and each
Person controlling such Holder, each such underwriter and each Person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, provided that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder, controlling Person or underwriter and stated to be
specifically for use therein, and provided, further, that the Company shall not
be liable in any such case to any Person to the extent that any such claim,
loss, damage, liability or expense arises out of or is based upon such Person's
failure to fulfill an legal obligation to deliver a supplemented or amended
prospectus provided by the Company to such Person pursuant to Section 7(f)
hereof. If the Holders are represented by counsel other than counsel for the
Company, the Company will not be obligated under this Section 8(a) to reimburse
legal fees and expenses of more than one separate counsel for Holders. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Holder or any such director, officer,
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shareholder, agent, partner, underwriter or controlling Person and shall survive
the transfer of such securities by such holder.
(b) By Holders. Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors, officers, shareholders and agents, each underwriter, if any, of
the Company's securities covered by such a registration statement, each Person
who controls the Company or such underwriter within the meaning of Section 15 of
the Securities Act, and each other such Holder, each of its officers, directors,
shareholders, agents and partners and each Person controlling such Holder within
the meaning of Section 15 of the Securities Act, against all claims, losses,
damages and liabilities (or actions in respect thereof), including any of the
foregoing incurred in settlements of any litigation, arising out of or based on
any untrue statement (or alleged untrue statement) of a material fact contained
in any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company, such Holders, such directors,
officers, persons, underwriters or control Persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder and stated to be specifically for use therein.
Notwithstanding the foregoing, the liability of each Holder under this
subsection (b) shall be limited in an amount equal to the proceeds received by
such Holder for the shares sold by such Holder, unless such liability arises out
of or is based on willful conduct by such Holder or Founder. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Holder or any such director, officer, shareholder, agent,
partner, underwriter or controlling Person and shall survive the transfer of
such securities by such holder.
(c) Procedures. Each party entitled to indemnification under this Section
8 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided, further, that the failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying Party
of its obligations under this Agreement unless the failure to give such notice
is materially prejudicial to an Indemnifying Party's ability to defend such
action and provided, further, that the Indemnifying Party shall not assume the
defense for matters as to which there is a conflict of interest or separate and
different defenses. If the Indemnifying Party has assumed the
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defense of such claim or litigation in accordance with the terms hereof, or if
the Indemnifying Party cannot assume such defense because of a conflict of
interest or separate and different defenses, no Indemnified Party shall, except
with the consent of the Indemnifying Party (which shall not be unreasonably
withheld or delayed), consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnifying Party of a release from all
liability in respect to such claim or litigation. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation.
(d) Contribution. If the indemnification provided for in Section 8(a) or
8(b) is unavailable to a party that would have been an indemnified party under
such Section in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each party that would have
been an indemnifying party thereunder shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as if appropriate to reflect the relative
fault of the indemnifying party on the one hand and such indemnified party on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof). The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
indemnifying party or such indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and each Purchaser agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 8(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this Section 8(d) shall include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim (which shall be limited as provided in Section 8(d)
hereof if the indemnifying party has assumed the defense of any such action in
accordance with the provisions thereof). 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.
(e) Other Indemnification and Contribution. Indemnification and
contribution similar to that specified in Sections 8(a), 8(b), 8(c) and 8(d)
(with appropriate modifications) shall be given by the Company and each seller
of Registrable Securities with respect to any required registration or other
qualification of such Registrable Securities under any Legal Requirement, other
than the Securities Act.
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(f) Payments. The indemnification and contribution required by this Section
8 shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
9. Information by Holder. The Holder or Holders of Registrable Securities
included in any registration shall furnish to the Company such information
regarding such Holder or Holders, the Registrable Securities held by them and
the distribution proposed by them as the Company may request in writing and only
as shall be necessary to enable the Company to comply with the provisions hereof
in connection with any registration, qualification or compliance referred to in
this Agreement.
10. 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, after and
during such time as the Company shall be subject to the reporting requirements
of Sections 13 or 15(d) of the Exchange Act, the Company agrees to use its best
efforts to make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, and to furnish to
any Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144.
11. Transfer of Registration Rights. The rights to cause the Company to
register securities granted Holders under Sections 2, 3 and 4 may be assigned in
connection with any transfer or assignment by a Holder of Registrable Securities
provided that: (i) such transfer may otherwise be effected in accordance with
applicable securities laws, and (ii) such transfer is effected in compliance
with the restrictions on transfer contained in this Agreement and in any other
agreement between the Company and the Holder. No transfer or assignment will
divest Holder or any subsequent owner of such rights and powers unless all
Registrable Shares are transferred or assigned.
12. Standoff Agreement. (a) Each Holder agrees that, if, in connection with
any Public Offering, the Company or the underwriters managing the offering so
request, the Holders shall not sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any Registrable Securities
(other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such period
of time (not to exceed one hundred eighty (180) days) from the effective date of
such registration as may be requested by the Company or the underwriters;
provided that each officer and director of the Company who owns stock of the
Company and each Holder of one percent (1%) or more of the Company's capital
stock also agrees to such restrictions.
(b) Each Holder shall be deemed to have agreed by acquisition of such
Registrable Securities, if so required by the managing underwriter, not to
effect any public sale or distribution of such securities during the seven days
prior to and the 180 days after any underwritten
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registration pursuant to Section 2 or 3 has become effective, except as part of
such underwritten registration, whether or not such holder participates in such
registration.
(c) The Company agrees (i) if so required by the managing underwriter, not
to effect any public sale or distribution of its equity securities or securities
convertible into or exchangeable or exercisable for any of such securities
during the seven days prior to and the 180 days after any underwritten
registration pursuant to Section 2 has become effective, except as part of such
underwritten registration and except in connection with a stock option plan,
stock purchase plan, managing directors' plan, savings or similar plan, or an
acquisition of a business, merger or exchange of stock for stock, and (ii) to
cause each holder of its equity securities or of any securities convertible into
or exchangeable or exercisable for any of such securities, in each case
purchased directly from the Company at any time after the date of this Agreement
(other than in a public offering), to agree not to effect any such public sale
or distribution of such securities during such period, except as part of such
underwritten registration.
(d) This Section 12 shall be binding on all transferees or assignees of
Registrable Securities, whether or not such persons are entitled to registration
rights pursuant to Section 11.
13. Miscellaneous.
(a) Nominees for Beneficial Owners. In the event that Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its option, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement (or any
determination of any number or percentage of shares constituting Registrable
Securities held by any holder or holders of Registrable Securities contemplated
by this Agreement).
(b) Governing Law. This Agreement will be governed by and construed under
the laws of Massachusetts as applied to agreements among Massachusetts residents
entered into and to be performed entirely within Massachusetts.
(c) Amendments and Waivers. Any term of this Agreement may be amended and
the observance of any term of this Agreement 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 Holders of a majority of the
Registrable securities, voting as a class. Any amendment or waiver effected in
accordance with this paragraph will be binding upon each holder of any
securities purchased under this Agreement at the time outstanding (including
securities into which such securities are convertible), each future holder of
all such securities and the Company.
(d) Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision will be excluded from this
Agreement and the balance of the Agreement will be interpreted as if such
provision were so excluded and will be enforceable in accordance with its terms.
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(e) Notices. Any notice or other communication in connection with this
Agreement shall be deemed to be delivered if in writing (or in the form of a
telex or telecopy) addressed as hereinafter provided and if either (x) actually
delivered at said address (evidenced in the case of a telex by receipt of the
correct answerback) or (y) in the case of a letter, three business days shall
have elapsed after the same shall have been deposited in the United States
mails, postage prepaid and registered or certified: (a) if to any Holder, to the
registered address of such Holder as set forth in the Company's transfer
records; and (b) if to the Company, to the attention of its President at its
address specified in or pursuant to Section 15 of the Securities Purchase
Agreement.
(f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
(g) Titles, Subtitles and Table of Contents. The titles, subtitles and
table of contents used in this Agreement are used for convenience only and are
not to be considered in construing or interpreting this Agreement.
(h) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the Company and each other party hereto and supersedes all
prior agreements and understandings relating to the subject matter hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
NUMATICS, INCORPORATED
By: /s/ Robert P. Robeson
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Title
HARVARD PRIVATE CAPITAL HOLDINGS, INC.
By:
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Title:
By
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Title:
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
NUMATICS, INCORPORATED
By:
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Title:
HARVARD PRIVATE CAPITAL HOLDINGS, INC.
By: /s/ Michael R. Eisenson
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Authorized Signatory
By: /s/ Mark A. Rosen
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Authorized Signatory