\PHILA2\99664_3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is dated as of March 11, 1996 by and
among RCM Technologies, Inc., a Nevada corporation (the "Company") and the
Shareholders of The Consortium, a New Jersey corporation, listed on Schedule "A"
attached hereto and made a part hereof (the "Holders").
W I T N E S S E T H:
WHEREAS, the Company and Holders are parties to a Stock Purchase
Agreement dated as of March 1, 1996 (the "Stock Purchase Agreement") pursuant to
which the Company acquired 100% of the outstanding stock of The Consortium (the
"Acquisition");
WHEREAS, pursuant to the Acquisition, the Holders are to receive
certain shares of the Company's $.05 par value common stock (the "Common
Stock");
WHEREAS, the parties hereto desire to set forth their agreement
concerning the registration under the Securities Act of 1933, as amended of the
Common Stock issued to the Holders in connection with the Acquisition.
NOW, THEREFORE, the parties hereto agree as follows:
AGREEMENT
1. Definitions.
(a) "Acquisition" shall mean the Acquisition by the Company of
100% of the outstanding stock of The Consortium pursuant to the terms of the
Stock Purchase Agreement entered into on March 1, 1996.
(b) "Closing" shall mean that date upon which a closing
of the Acquisition occurs.
(c) "Company" shall mean RCM Technologies, Inc.
(d) "Exchange Act" shall mean the Securities Exchange
Act of 1934.
(e) "Holders" shall mean the former shareholders of The
Consortium (identified on the signature page hereof) who have
\PHILA2\99664_3
received shares of the Company's Common Stock pursuant to the
Acquisition.
(f) "Restricted Stock" shall mean the Common Stock of the
Company that has been issued to the Holders pursuant to the Acquisition and any
Common Stock issued as a dividend or distribution with respect to, or in
exchange or replacement of, such Common Stock.
(g) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar or successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
any relevant time.
(h) "SEC" shall mean the United States Securities and
Exchange Commission.
(i) "Trading Day" shall mean any day on which the New
York Stock Exchange is open for trading.
Capitalized terms used in this Registration Rights Agreement and not
otherwise defined herein shall have the same meaning ascribed thereto in the
Stock Purchase Agreement.
2. Shelf Registration.
(a) RCM shall prepare and file, not later than February 15,
1997, a Registration Statement with the SEC and use its best efforts to as
promptly as possible have such Registration Statement declared effective for the
purpose of facilitating the public resale of the Restricted Stock subject to the
limitations upon resale set forth at subparagraph 2(c) hereafter, or as
otherwise contained herein. The Company shall not be obligated to obtain a
commitment from an underwriter relative to the sale of such Restricted Stock,
whether in a public offering or private placement transaction; nor shall the
Company be restricted in any manner from including the distribution, issuance or
resale of any other securities within such Registration Statement.
(b) RCM agrees to indemnify and hold harmless each of the
Holders, requesting or joining in a registration, each underwriter (as defined
in the Securities Act) if any managing the offering of the securities
thereunder, each person who controls any such Holder or underwriter within the
meaning of Section 15 of the Securities Act and/or Section 20 of the Exchange
Act and each of the officers, directors, employees and agents of the foregoing
in their respective capacities as such, to the fullest extent
2
\PHILA2\99664_3
permitted by law, from and against any and all actions, suits, claims,
proceedings, costs, losses, damages, judgments, amounts paid in settlement and
expenses (including without limitation reasonable attorneys' fees and
disbursements) to which any of them may become subject under the Securities Act
or otherwise insofar as the same arise out of or are based on (i) any untrue or
alleged untrue statement of any material fact contained in such Registration
Statement on the effective date thereof, including any preliminary prospectus or
final prospectus contained therein or any amendments or supplements thereof,
(ii) 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
or (iii) any violation by RCM of any federal or state law, rule or regulation
applicable to RCM and relating to action required of or inaction by RCM in
connection with any such registration.
(c) Public resale by the Holders of the Restricted Stock shall
be subject to the following limitations: (i) no public resales by any of the
Holders will be permitted earlier than April 1, 1997; (ii) from April 1, 1997
through March 11, 1998 (the second anniversary of the Closing) all public
resales by Xxxxxx Xxxxxx and Xxxxx Xxxxxx, in the aggregate, will be limited to
that number of shares of Restricted Stock that upon resale will yield gross
proceeds to Messrs. Blaire and Xxxxxx of $600,000, and no public resales will be
permitted during this period by any of the other Holders; (iii) from March 11,
1998 (the second anniversary of the Closing through March 11, 1999 (the third
anniversary of the Closing), each of the Holders will be permitted to effectuate
the public resale of shares of Restricted Stock limited in a manner calculated
under Rule 144(e) under the Act (as such Rule is in effect on the Closing), as
though such shares of Restricted Stock were treated as "restricted securities"
held by "affiliates" or "persons other than affiliates," whichever the case may
be, to the extent such terms are defined under Rule 144, however, in no event
greater than 50,000 shares per week per Holder; and (iv) following March 11,
1999 (the third anniversary of the Closing), public resales of the Restricted
Stock will be permitted without regard to numerical limitations under this
subparagraph 2(c).
3. Registration Procedures. The Company shall:
(a) prepare and file with the Commission a Registration
Statement with respect to the Restricted Stock by no later than February 15,
1997 and use its best efforts to cause such Registration Statement to become
effective as promptly as possible and to remain effective until all of the
Restricted Stock has been sold pursuant thereto;
3
\PHILA2\99664_3
(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 keep such Registration Statement effective for
the period specified in Subparagraph 3(a) above and to comply with the
provisions of the Securities Act with respect to the disposition of all
Restricted Stock covered by such Registration Statement in accordance with the
Holders' intended method of disposition set forth in such Registration Statement
for such period;
(c) furnish to each Holder and to each underwriter, if any,
such number of copies of the Registration Statement and the prospectus included
therein (including each preliminary prospectus), as such persons may reasonably
request in order to facilitate the public sale or other disposition of the
Restricted Stock covered by such Registration Statement;
(d) use its best efforts to register or qualify the Restricted
Stock covered by such Registration Statement under the securities or blue sky
laws of such jurisdictions as the Holders, or, in the case of an underwritten
public offering, the managing underwriter shall reasonably request; provided,
however, that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any
such jurisdiction;
(e) immediately notify each Holder under such Registration
Statement and each underwriter, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus contained in such Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required or necessary to be stated therein in
order to make the statements contained therein not misleading in light of the
circumstances under which they were made;
(f) make available for inspection by each Holder, any
underwriter participating in any disposition pursuant to such Registration
Statement, and any attorney, accountant or other agent retained by any such
Holder or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such Holder, underwriter, attorney, accountant or agent in connection with such
Registration Statement;
4
\PHILA2\99664_3
(g) For purposes of Subparagraphs 3(a) and 3(b) above, the
period of distribution of Restricted Stock shall be deemed to extend until (A)
in an underwritten public offering of all of the Restricted Stock, each
underwriter has completed the distribution of all securities purchased by it;
and (B) in any other registration, all shares of Restricted Stock covered
thereby shall have been sold;
(h) if the Common Stock of the Company is listed on any
securities exchange or automated quotation system, the Company shall use its
best efforts to list (with the listing application being made at the time of the
filing of such Registration Statement or as soon thereafter as is reasonably
practicable) the Restricted Stock covered by such Registration Statement on such
exchange or automated quotation system;
(i) enter into normal and customary underwriting arrangements
or an underwriting agreement and take all other reasonable and customary actions
if the Holders sell their shares of Restricted Stock pursuant to an underwriting
(however, in no event shall the Company, in connection with such underwriting,
be required to undertake any special audit of a fiscal period in which an audit
is normally not required);
(j) notify the Holders if there are any amendments to the
Registration Statement, any requests by the SEC to supplement or amend the
Registration Statement, or of any threat by the SEC or state securities
commission to undertake a stop order with respect to sales under the
Registration Statement; and
(k) cooperate in the timely removal of any restrictive legends
from the shares of Restricted Stock in connection with the resale of such shares
covered by an effective Registration Statement.
4. Expenses.
(a) For the purposes of this Paragraph (4), the term
"Registration Expenses" shall mean: all expenses incurred by the Company in
complying with paragraphs (2) and (3) of this Agreement, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel and independent public accountants for the Company,
"blue sky" fees, fees of the National Association of Securities Dealers, Inc.
("NASD"), fees and expenses of listing shares of Restricted Stock on any
securities exchange or automated quotation system on which the Company's shares
are listed and fees of transfer agents and
5
\PHILA2\99664_3
registrars. The term "Selling Expenses" shall mean: all underwriting discounts
and selling commissions applicable to the sale of Restricted Stock and all
accountable or non-accountable expenses paid to any underwriter in respect of
the sale of Restricted Stock.
(b) Except as otherwise provided herein, the Company will pay
all Registration Expenses in connection with the Registration Statement filed
pursuant to paragraphs (2) and (3) of this Agreement. All Selling Expenses in
connection with any Registration Statement filed pursuant to paragraphs (2) and
(3) of this Agreement shall be borne by the participating Holders in proportion
to the number of shares sold by each, or by such persons other than the Company
(except to the extent the Company may be a seller) as they may agree.
5. Obligations of Holder.
(a) In connection with each registration hereunder, each
selling Holder will furnish to the Company in writing such information with
respect to such seller and the securities held by such seller, and the proposed
distribution by them as shall be reasonably requested by the Company in order to
assure compliance with federal and applicable state securities laws, as a
condition precedent to including such seller's Restricted Stock in the
Registration Statement. Each selling Holder also shall agree to promptly notify
the Company of any changes in such information included in the Registration
Statement or prospectus as a result of which there is an untrue statement of
material fact or an omission to state any material fact required or necessary to
be stated therein in order to make the statements contained therein not
misleading in light of the circumstances in which they were made.
(b) In connection with each registration pursuant to paragraph
(2) of this Agreement, the Holders included therein will not effect sales
thereof until notified by the Company of the effectiveness of the Registration
Statement, and thereafter will suspend such sales after receipt of telegraphic
or written notice from the Company to suspend sales to permit the Company to
correct or update a Registration Statement or prospectus.
6. Information Blackout.
(a) At any time when a registration statement effected
pursuant to Paragraph 2 relating to Restricted Stock is effective, upon written
notice from the Company to the Holders that the Company has determined in good
faith that sale of Restricted Stock pursuant to the registration statement would
require disclosure of non-public material information, all Holders shall suspend
sales of Restricted Stock pursuant to such registration statement until the
earlier of:
(i) thirty (30) days after the Company makes
such good faith determination, and
(ii) such time as the Company notifies the
Holders that such material information has been disclosed to the public or has
ceased to be material or that sales pursuant to such registration statement may
otherwise be resumed.
6
\PHILA2\99664_3
7. Miscellaneous Provisions.
(a) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New
Jersey.
(b) Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
(c) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given without the written consent of the Company and the Holders.
(d) Notices. All communications under this Agreement
shall be sufficiently given if delivered by hand or by overnight
courier or mailed by registered or certified mail, postage prepaid,
addressed,
(i) if to the Company, to:
Xx. Xxxx Xxxxx
Chief Executive Officer
RCM Technologies, Inc.
0000 XxXxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxx, Esquire
Clark, Ladner, Xxxxxxxxxxx & Xxxxx
One Commerce Square
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
(ii) if to the Holders, to:
Xxxxx Xxxxxx
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
7
\PHILA2\99664_3
Xxxxxx Xxxxxx
Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxx Xxxxxxx
000 Xxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Xxxxxx Xxxx
0000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Xxxxxxxxx Xxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
with a copy to:
Xxxxxx X. Xxxxxx, Esquire
Xxxxxxx Xxxxxxx Xxxxxxxx & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
or, at such other address as any of the parties shall have furnished in writing
to the other parties hereto.
(e) Successors and Assigns; Holders as Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective successors and assigns, and the agreements of the Company
herein shall inure to the benefit of all Holders and their respective successors
and assigns.
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Entire Agreement; Survival; Termination. This Agreement is
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
8
\PHILA2\99664_3
ATTEST: RCM TECHNOLOGIES, INC.
By:____________________________ By: __________________
Name:
Title:
----------------------------
Xxxxx Xxxxxx
----------------------------
Xxxxxx Xxxxxx
----------------------------
Xxxxx Xxxxxxx
----------------------------
Xxxxxx Xxxx
-----------------------------
Xxxxxxxxx Xxxxxx
\PHILA2\99664_3
SCHEDULE A
List of Shareholders of The Consortium
Xxxxxx Xxxxxx
Xxxxx Xxxxxx
Xxxxx Xxxxxxx
Xxxxxx Xxxx
Xxxxxxxxx Xxxxxx
10
