EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
This Registration Agreement is made as of the 27th day of July 1998
(this "AGREEMENT), by and among Kaynar Technologies Inc., a Delaware
corporation (the "COMPANY"), Xxxxxx X. XxXxxxx, Xxxxxx X. XxXxxxx, the Xxxxxx
X. XxXxxxx Family Trust, the Xxxxxx X. XxXxxxx Family Trust #2, and the
Xxxxxx X. XxXxxxx Family Trust (each individually an "M&M STOCKHOLDER" and
collectively, the "M&M STOCKHOLDERS").
WHEREAS, the Company, KTIC Acquisition Corp., a Delaware corporation and
a wholly-owned subsidiary of the Company (the "Purchaser"), and M&M Machine &
Tool Co., a California corporation ("M&M"), have entered into an Agreement
and Plan of Merger (the "Merger Agreement") pursuant to which M&M and the
Purchaser will be merged, and the surviving corporation will become a
wholly-owned subsidiary of the Company; and
WHEREAS, in connection with the Merger Agreement, the Company has agreed
to provide the M&M Stockholders with certain registration rights as set forth
herein.
NOW THEREFORE, in consideration of the promises, covenants and
agreements contained herein, the sufficiency and adequacy of which are hereby
acknowledged, and for other good and valuable consideration, the sufficiency
and adequacy of which is hereby acknowledged, and intending to be legally
bound hereby, the parties hereto agree as follows:
SECTION 1. OTHER DEFINITIONS AND USAGE. As used in this Agreement:
1.1 OTHER DEFINITIONS.
(a) "AFFILIATE" means, as to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control", when used with respect to any Person, means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
(b) "BOARD OF DIRECTORS" means the Board of Directors of the Company.
(c) "COMMON STOCK" means shares of the Company's Common Stock, par
value $.01 per share.
(d) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(e) "GECC" means General Electric Capital Corporation, a New York
corporation, together with any Affiliate of GECC to whom GECC transfers any
registration rights with respect to Common Stock.
(f) "PERSON" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust
or unincorporated organization.
(g) "REGISTRABLE SECURITIES" means (i) Common Stock issuable or issued
to the M&M Stockholder pursuant to the Merger Agreement and (ii) Common Stock
issuable or issued to Stockholders other than the M&M Stockholders which is
within the definition of "Registrable Securities" contained in any
registration rights agreement between such Stockholder and the Company. As
to any proposed offer or sale of Registrable Securities, such securities
shall cease to be Registrable Securities with respect to such proposed offer
or sale when (i) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement or (ii) such securities are permitted to be distributed pursuant to
Rule 144(k) (or any successor provision to such Rule) under the Securities
Act or (iii) such securities shall have been otherwise transferred pursuant
to an applicable exemption under the Securities Act, new certificates for
such securities not bearing a legend restricting further transfer shall have
been delivered by the Company and such securities shall be freely
transferable to the public without registration under the Securities Act.
(h) "REGISTRATION EXPENSES" means all expenses incurred by the Company
in complying with SECTION 2 hereof, including all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
accountants for the Company, blue sky fees and expenses, the fees and other
costs and expense of any special audits incident to or required by any such
registration and the fees and other costs and expenses of any "independent"
underwriter required by the rules and regulations of the National Association
of Securities Dealers, Inc.; provided, however, that if any such independent
underwriter is required because the underwriter selected by the M&M
Stockholder is an Affiliate of, or otherwise related to, any Stockholder,
such fees and other costs and expenses of the independent underwriter shall
be Selling Expenses.
(i) "REGISTER," "REGISTERED" and "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement or similar document
in compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement or document by the Securities
and Exchange Commission.
(j) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
(k) "SELLING EXPENSES" means (i) all underwriting discounts and selling
commissions; (ii) underwriters' expense allowances and transfer taxes
applicable to the sale of Registrable Securities; and (iii) all fees,
disbursements and expenses of any selling Stockholder's counsel, accountants
and experts.
(l) "STOCKHOLDER" means any Person that owns any shares of the
outstanding Common Stock or Series C Preferred Stock.
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(m) "TRANSFER" shall mean (and correlative words shall have correlative
meanings) the act of selling, giving, transferring, creating a trust (voting
or otherwise), assigning or otherwise disposing of (other than pledging,
hypothecating or otherwise transferring as security); PROVIDED, HOWEVER, that
any transfer or other disposition upon foreclosure by a secured creditor
after an event of default under or with respect to a pledge, hypothecation or
other transfer as security shall constitute a "Transfer".
1.2. USAGE.
(a) References to a Person are also references to its assigns and
successors in interest (by means of merger, consolidation or sale of all or
substantially all the assets of such Person or otherwise, as the case may be).
(b) References to shares of capital stock "owned" by a Stockholder
shall include shares of capital stock beneficially owned by such Person but
which are held of record in the name of a nominee, trustee, custodian or
other agent.
(c) References to a document are to it as amended, waived and otherwise
modified from time to time and references to a statute or other governmental
rule are to it as amended and otherwise modified from time to time (and
references to any provision thereof shall include references to any successor
provision).
(d) References to Sections are to sections hereof, unless the context
otherwise requires.
(e) The definitions set forth herein are equally applicable both to the
singular and plural forms and the feminine, masculine and neuter forms of the
terms defined.
(f) The term "including" and correlative terms shall be deemed to be
followed by "without limitation" whether or not followed by such words or
words of like import.
(g) The term "hereof" and similar terms refer to this Agreement as a
whole.
(h) The "date of" any notice or request given pursuant to this
Agreement shall be determined in accordance with SECTION 4.
(i) The terms "day" and "days" refer to calendar days unless preceded
by the term "business".
SECTION 2. REGISTRATION RIGHTS.
2.1 DEMAND REGISTRATION RIGHTS.
(a) If the Company shall receive a written request from one or more of
the M&M Stockholders that the Company file a registration statement under the
Securities Act covering the
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registration of an amount of Registrable Securities the anticipated aggregate
offering price of which, net of underwriting discounts and commissions, would
exceed $1,000,000, the Company shall promptly give written notice of such
request to any Stockholders holding piggyback registration rights and shall
as soon as practicable file a registration statement and use its best efforts
(subject to the limitations of this SECTION 2) to effect the registration
under the Securities Act of the proposed Transfer of all such Registrable
Securities which such M&M Stockholder requests to be registered, together
with all of the Registrable Securities of any Stockholders who so request by
notice to the Company which is given within 30 days after the notice from the
Company described above. Notwithstanding the foregoing, if the Company shall
furnish to such M&M Stockholder a certificate signed by the Chief Executive
Officer of the Company stating that in the good faith judgment of the Board
of Directors it would be detrimental to the Company for a registration
statement to be filed in the near future, then the Company's obligation to
use its best efforts to file a registration statement shall be deferred for a
period not to exceed 120 days (or, at the option of the requesting M&M
Stockholder, withdrawn without constituting a demand).
(b) If the M&M Stockholder intends to distribute the Registrable
Securities covered by its request by means of an underwriting through an
underwriter, it shall so advise the Company as a part of its request made
pursuant to this SECTION 2. The Company shall select an underwriter
reasonably acceptable to the requesting M&M Stockholder, and shall include
such information in the written notice referred to in SECTION 2.1(A) . In
such event, the right of any Stockholder to include its Registrable
Securities in such registration shall be conditioned upon such Stockholder's
participation in such underwriting and the inclusion of such Stockholder's
Registrable Securities in the underwriting (unless otherwise mutually agreed
by the Stockholder, the underwriter and the Company) to the extent permitted
herein.
(c) The M&M Stockholder and all Stockholders proposing to distribute
their Registrable Securities through such underwriting (together with the
Company as provided in SECTION 2.3(E)) shall enter into an underwriting
agreement in customary form with the representative of the underwriter or
underwriters selected for such underwriting. Any M&M Stockholder that (i)
does not elect to distribute Registrable Securities through such underwriting
and (ii) beneficially owns 1% or more of the total Common Stock outstanding
as of the effective date of the applicable registration statement, shall be
prohibited, for a period of 90 days from such effective date, from selling,
contracting to sell or otherwise disposing of any shares of Common Stock
without the underwriter's prior written consent. Notwithstanding any other
provisions of this SECTION 2, if the underwriter advises the M&M Stockholder
in writing that marketing factors require a limitation of the number of
shares to be underwritten, the M&M Stockholder shall so advise the Company,
who shall so advise all Stockholders proposing to distribute their
Registrable Securities through such underwriting, and the number of shares of
Registrable Securities that may be included in the registration and
underwriting shall be allocated first to GECC, and then any remaining shares
shall be allocated among the other Stockholders requesting registration pro
rata based on the number of shares for which registration was requested. No
Registrable Securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration.
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(d) The Company is obligated to effect only two demand registrations
per calendar year for the M&M Stockholders pursuant to this SECTION 2.1.
(e) The rights granted to the M&M Stockholders pursuant to this SECTION
2.1 may not be, directly or indirectly, assigned or transferred.
2.2 PIGGYBACK REGISTRATION RIGHTS.
(a) If, at any time, the Company proposes to register (including a
registration effected by the Company for Stockholders other than the M&M
Stockholders) any of its securities under the Securities Act in connection
with the public offering of such securities (other than a registration form
relating to: (i) a registration of a stock option, stock purchase or
compensation or incentive plan or of stock issued or issuable pursuant to any
such plan, or a dividend investment plan; (ii) a registration of securities
proposed to be issued in exchange for securities or assets of or in
connection with a merger or consolidation with, another entity; or (iii) a
registration of securities proposed to be issued in exchange for, or as a
right exercisable only by holders of, other securities of the Company), the
Company shall promptly (but in no event later than 30 days after such notice)
give the M&M Stockholders written notice of such registration. Upon the
written request of the M&M Stockholder given within 30 days after receipt of
such written notice from the Company in accordance with SECTION 6, the
Company shall, subject to the provisions of SECTION 2.3 (in the case of an
underwritten offering), include in the registration statement to be filed by
it under the Securities Act in connection with such offering all of the
Registrable Securities that the M&M Stockholder has requested to be
registered.
(b) The right of the M&M Stockholder to "piggyback" in an underwritten
public offering of the Company's securities pursuant to SECTION 2.2(A) shall
be conditioned upon the M&M Stockholder's participation in such underwriting
and the inclusion of the M&M Stockholder's Registrable Securities in the
underwriting to the extent provided herein. If the M&M Stockholder proposes
to distribute its securities through such underwriting, the M&M Stockholder
shall (together with the Company and any other Stockholders distributing
their securities through such underwriting) enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
underwriting by the Company. Notwithstanding any other provision of this
SECTION 2.2, if the underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the Company shall so
advise all Stockholders participating in the underwriting and registration,
and the number of securities that may be included in the registration and
underwriting shall be allocated first to the Company, then to GECC and then
any remaining shares shall be allocated among such Stockholders pro rata
based on the number of shares for which registration was requested.
(c) Each M&M Stockholder may only exercise piggyback registration
rights pursuant to SECTION 2.2(A) two times; provided, however, that this
limitation shall not apply to any piggyback registrations in which the M&M
Stockholder agrees to pay a pro rata share of both the Registration Expenses
and the Selling Expenses, which share shall be determined by comparing the
number of shares registered by the M&M Stockholder to the total number of
shares included in such registration.
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(d) The rights granted to the M&M Stockholders pursuant to this SECTION
2.2 may not be, directly or indirectly, assigned or transferred.
2.3 OBLIGATIONS OF THE COMPANY. Whenever required under this
Agreement to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the Securities and Exchange Commission
("SEC") a registration statement with respect to such Registrable Securities
and use its best efforts to cause such registration statement to become
effective;
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all securities covered
by such registration statement;
(c) Furnish to the Stockholders participating in such registration such
numbers of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate the
disposition of Registrable Securities owned by them;
(d) Use its best efforts to register and qualify the securities covered
by such registration statement under the securities laws of such
jurisdictions as the Company believes shall be reasonably appropriate for the
distribution of the securities covered by the registration statement and,
with respect to registrations under SECTION 2.1, such jurisdictions as the
M&M Stockholder shall reasonably request, provided that the Company shall not
be required in connection therewith or as a condition thereto to qualify to
do business or to file a general consent to service of process in any such
jurisdiction, and further provided that (anything in this Agreement to the
contrary notwithstanding with respect to the bearing of expenses) if any
jurisdiction in which the securities shall be qualified shall require that
expenses incurred in connection with the qualification of the securities in
that jurisdiction be borne by selling Stockholders and provided there is no
exemption from such requirement by reason of the Company's obligation to pay
such expenses pursuant to SECTION 2.5, such expenses shall be payable pro
rata by the Stockholders participating in such registration, to the extent
required by such jurisdiction; and
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement with terms generally
satisfactory to the managing underwriter of such offering. Each Stockholder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
2.4 FURNISH INFORMATION. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this SECTION 2
that the selling Stockholders shall furnish to the Company in writing
expressly for inclusion in the registration
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statement, such information regarding themselves, the Registrable Securities
held by them and the intended method of disposition of such securities as
shall be required to effect the registration of their Registrable Securities.
In that connection, each selling Stockholder shall be required to represent
to the Company that all such information which is given is both complete and
accurate in all material respects.
2.5 EXPENSES OF REGISTRATION. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
this SECTION 2 shall be borne by the Company, and all Selling Expenses shall
be borne by the Company and any Stockholders of the securities so registered
pro rata on the basis of the number of shares registered by the Company and
such Stockholders. Each Stockholder participating in any registration
effected pursuant to this SECTION 2 shall bear all of the fees and expenses
of its own counsel, accountants and experts.
2.6 INDEMNIFICATION. If any Registrable Securities held by an
M&M Stockholder are included in a registration statement under this Agreement:
(a) To the maximum extent permitted by law, the Company will indemnify
and hold harmless each M&M Stockholder participating in the registration, the
officers, directors, controlling persons and partners of each such M&M
Stockholder, and any underwriter (as defined in the Securities Act) for any
such M&M Stockholder, against any losses, claims, damages, or liabilities
(joint or several) to which they or any of them may become subject under the
Securities Act, the Exchange Act or any other federal or state law, insofar
as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise from or are based upon any of the following: (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto; or
(ii) the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein
not misleading; and the Company will reimburse each such M&M Stockholder,
officer, director, controlling person or partner or underwriter for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
SECTION 2.6(A) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case for any such
loss, claim, damage, liability, or action to the extent that it arises from
or is based upon written information furnished expressly for use in
connection with such registration by any such Stockholder, underwriter or
controlling person.
(b) To the maximum extent permitted by law, each selling M&M
Stockholder will indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the registration statement,
each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter (within the meaning of the Securities Act)
for the Company, any person who controls such underwriter, any other
Stockholder selling securities in such registration statement or any of its
directors or officers or any person who controls such
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other Stockholder against any losses, claims, damages or liabilities (joint
or several) to which the Company or any such director, officer, controlling
person, or underwriter or other such Stockholder or its director, officer or
controlling person may become subject, under the Securities Act, the Exchange
Act or any other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereto) arise from or are
based upon written information furnished by such M&M Stockholder expressly
for use in connection with such registration; and each such M&M Stockholder
will reimburse any legal or other expenses reasonably incurred by the Company
or any such director, officer, controlling person, underwriter or controlling
person thereof, other Stockholder, or officer, director or controlling person
of such other Stockholder in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this SECTION 2.6(B) shall not apply to
amounts paid in settlement of any such loss, claim damage, liability or
action if such settlement is effected without the consent of the M&M
Stockholder providing the indemnity; which consent shall not be unreasonably
withheld or delayed.
(c) Promptly after receipt by an indemnified party under this SECTION
2.6 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this SECTION 2.6, notify the
indemnifying party in writing of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
shall have the right to retain its own counsel, with the fees and expenses to
be paid by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would, in the opinion
of counsel to the indemnified party, be inappropriate due to actual or
potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to notify
an indemnifying party within a reasonable time of the commencement of any
such action, to the extent prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the indemnified
party under this SECTION 2.6, but the omission so to notify the indemnifying
party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this SECTION 2.6.
(d) The obligations of the Company and the M&M Stockholders under this
SECTION 2.6 shall survive the completion of any offering of Registrable
Securities in a registration statement made under the terms of this Agreement.
SECTION 3. BLACKOUT PERIODS. At any time when a registration
statement effected pursuant to SECTION 2 relating to Registrable Securities
is effective or a request for registration rights has been submitted, upon
written notice from the Company to the M&M Stockholder that the Company has
determined in good faith, with the advice of counsel, that such M&M
Stockholder's sale of Registrable Securities pursuant to the registration
statement or the filing of a registration statement would require disclosure
of non-public material information the disclosure of which would have a
material adverse effect on the Company or would otherwise adversely effect a
material financing, acquisition, disposition, merger or other comparable
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transaction (a "Blackout"), such M&M Stockholder shall suspend sales of
Registrable Securities pursuant to such registration statement or the filing
of the requested registration statement shall be delayed until the earlier of:
(a) the date upon which such material information is
disclosed to the public or ceases to be material, or
(b) such time as the Company notifies such M&M Stockholder
that sales pursuant to such registration statement may be resumed or the
filing of the requested registration statement may proceed.
SECTION 4. AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, without the prior written consent of the Company and
the M&M Stockholders. Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof with respect to a matter which relates
exclusively to the rights of holders of Registrable Securities whose
securities are being sold pursuant to a registration statement and which does
not directly or indirectly affect the rights of other holders of Registrable
Securities may be given by the holders of a majority of the Registrable
Securities being sold; provided, however, that the provisions of this
sentence may not be amended, modified or supplemented except in accordance
with the provisions of the immediately preceding sentence.
SECTION 5. NOTICES. All notices, demands and requests required by this
Agreement shall be in writing and shall be deemed to have been given for all
purposes (a) upon personal delivery, (b) one business day after being sent,
when sent by professional overnight courier service from and to locations
within the continental United States, or (c) five days after posting when
sent by registered or certified mail (return receipt requested), addressed to
the Company or an M&M Stockholder at his, her or its address set forth on the
signature pages hereof. Any party hereto may from time to time by notice in
writing served upon the others as provided herein, designate a different
mailing address or a different person to which such notices or demands are
thereafter to be addressed or delivered.
SECTION 6. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall inure to the benefit of and be binding upon the
successors of each of the parties.
SECTION 7. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which shall be deemed to be an original, and when
executed, separately or together, shall constitute a single original
instrument, effective in the same manner as if the parties hereto had
executed one and the same instrument.
SECTION 8. CAPTIONS. Captions are provided herein for convenience only
and they are not to serve as a basis for interpretation or construction of
this Agreement, nor as evidence of the intention of the parties hereto.
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SECTION 9. GOVERNING LAW. This Agreement shall be governed by,
interpreted under, and construed and enforced in accordance with the internal
laws, and not the laws pertaining to conflicts or choice of laws, of the
State of Delaware.
SECTION 10. SEVERABILITY. The provisions of this Agreement are
severable. The invalidity, in whole or in part, of any provision of this
Agreement shall not affect the validity or enforceability of any other of its
provisions. If one or more provisions hereof shall be declared invalid or
unenforceable, the remaining provisions shall remain in full force and effect
and shall be construed in the broadest possible manner to effectuate the
purposes hereof. The parties further agree to replace such void or
unenforceable provisions of this Agreement with valid and enforceable
provisions which will achieve, to the extent possible, the economic, business
and other purposes of the void or unenforceable provisions.
SECTION 11. ENTIRE AGREEMENT. This Agreement contains the entire
understanding among the parties hereto with respect to the subject matter
hereof and supersedes all prior written and oral agreements, understandings,
commitments and practices between the parties.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement with
the intent and agreement that the same shall be effective as of the day and
year first above written.
KAYNAR TECHNOLOGIES INC.
By:
--------------------------------
Xxxxx X. Xxxxxx,
Executive Vice President
M&M MACHINE & TOOL CO.
By: By:
-------------------------------- ------------------------------
Xxxxxx X. XxXxxxx Xxxxxx X. XxXxxxx
President Vice President
XXXXXX X. XXXXXXX XXXXXX X. XXXXXXX FAMILY TRUST
UDT April 30, 1997
By: By:
--------------------------------- -----------------------------
Xxxxxx X. XxXxxxx Xxxxxx X. XxXxxxx
Trustee
XXXXXX X. XXXXXXX FAMILY XXXXXX X. XXXXXXX FAMILY TRUST
TRUST #2 XXX Xxxxxxxx 00, 0000
XXX December 27, 1991
By: By:
--------------------------------- ------------------------------
Xxxxxx X. XxXxxxx Xxxxxx X. XxXxxxx
Trustee Trustee
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