Exhibit 10.7
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of the
30th day of June, 1997, among Century Electronics Manufacturing, Inc., a
Delaware corporation (the "Company"), and the parties listed on the signature
page attached hereto (collectively, together with their successors or assigns,
the "Holders").
The Holders are holders of notes (the "Notes") which are convertible into
shares (collectively, the "Underlying Shares") of the Company's common stock,
par value $.O1 per share (the "Common Stock"). For the purposes of this
Agreement, "Registrable Securities" means, collectively, (a) the Underlying
Shares and (b) any shares of Common Stock issued with respect to the Underlying
Shares by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization; but does not include any shares of the Common Stock which may be
sold by any of the Holders who are not affiliates of the Company pursuant to
Rule 144(k) of the Securities Act of 1933, as amended (the "Securities Act") or
any other rule of similar effect. Notwithstanding anything to the contrary
contained in this Agreement, if the Company is party to a merger, consolidation
or other combination which causes the Notes to be automatically converted into
Common Stock in accordance with the terms of the Notes, the registration
obligations of the Company and/or all other parties with respect to Registrable
Securities shall be governed by the specific terms of the Notes and section 7 of
the note purchase letter agreements, dated the date hereof, between the Company
and the Holders, and this Agreement shall be automatically terminated.
The parties hereto agree as follows:
1. Demand Registration.
(a) Demand Registration. At any time after six months from the date
on which the Common Stock is first publicly traded (the "Effective Date"), the
holders of at least 20% of the Registrable Securities may request registration
under the Securities Act of all or part of the Registrable Securities. The
Holders will collectively be entitled to request one (1) registration only, and
the registration requested pursuant to this paragraph 1(a) is referred to herein
as the "Demand Registration." The request for a Demand Registration shall be in
writing and shall specify the number of Registrable Securities requested to be
registered by each Holder. Within ten (10) days after receipt of any such
request, the Company will give written notice of such requested Demand
Registration to all other holders of Registrable Securities and will include in
such registration the Registrable Securities with respect to which the Company
receives written requests for inclusion therein within fifteen (15) days after
the giving (in accordance with paragraph 9(f) hereof) of the Company's notice
(such additional selling Holders, together with the original requesting Holders,
being collectively referred to as the "Requesting Holders"). A registration will
not count as the Demand Registration unless and until it has become effective
(unless such Demand Registration has not become effective due solely to the
fault of one or more of the Requesting Holders). The Company will pay all
Registration Expenses (as defined in Section 4 hereof) other than underwriting
discounts or commissions, if any, and filing fees
relating to the Registrable Securities to be registered (collectively, the
"Stockholder Costs") in connection with any registration initiated as a Demand
Registration whether or not it has become effective. Upon the effectiveness of
the Demand Registration, the Requesting Holders may thereafter sell the
Registrable Securities covered by the effective Demand Registration from time to
time, in their discretion, provided that they comply with all applicable federal
and state securities laws, including, without limitation, prospectus delivery
requirements; provided, further, that the Company shall not be obligated to keep
such Demand Registration statement effective for a period longer than one year.
The Company may, in its discretion, determine that the Demand Registration shall
be underwritten by one or more underwriters. In such case, the managing
underwriter (the "Underwriter") chosen by the Company shall be reasonably
acceptable to the majority in interest of the Requesting Holders. All of the
Registrable Securities requested to be registered by the Requesting Holders
shall be included in the Demand Registration.
In addition to all of the Registrable Securities requested to be registered by
the Requesting Holders, the Company may include in the Demand Registration
additional securities (the "Additional Securities") to be issued by it or to be
sold by other security holders; provided, that if the Underwriter, if any,
advises the Company in writing that in its opinion the number of the Additional
Securities requested to be included in such registration exceeds the number
which can be sold in an orderly manner in such offering without materially
adversely affecting the market for the Company's stock, the Company will include
in such registration only such number of the Additional Securities which the
Underwriter determines may be included, pro rata among the Company and the
holders of the Additional Securities on the basis of the number of shares that
they have requested to be registered or in accordance with contractual rights,
if any, or other preference rights determined by the Company.
(b) Restrictions on the Demand Registration. The Company will not be
obligated to effect the Demand Registration within six (6) months after the
effective date of a previous Company registration statement regardless of
whether Registrable Securities were included.
2. Piggyback Registrations.
(a) Right to Piggyback. Subject to Section 3 below, whenever the
Company proposes to register any of its securities under the Securities Act
(other than pursuant to an underwritten initial public offering of the Common
Stock (the "Initial Offering") or the Demand Registration) and the registration
form to be used may be used for the registration of Registrable Securities (a
"Piggyback Registration"), the Company will give prompt written notice to the
Holders of its intention to effect such a registration and will use its
reasonable best efforts to include in such registration all Registrable
Securities requested to be included within fifteen (15) days after the giving
(in accordance with paragraph 9(f) hereof) of the
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Company's notice, all to the extent and under the conditions that such
registration is permitted under the Securities Act.
In the event that the Piggyback Registration is underwritten and the managing
underwriter (the "Piggyback Underwriter") reasonably believes that the sale of
the number of shares proposed to be sold by the Requesting Holders and other
holders of Common Stock requesting piggyback registration (the "Other Holders")
would have a material adverse effect on the market for the Company's stock, the
Requesting Holders hereby agree that the number of shares of Registrable
Securities which are sold by the Piggyback Underwriter in the underwritten
offering shall be reduced, pro rata with the shares to be sold by the Other
Holders, to such number as the Piggyback Underwriter reasonably recommends may
be sold in the offering without having a material adverse effect on the market
for the Company's stock. Any reduction shall be pro rata on the basis of the
number of shares requested to be registered by the Requesting Holders as well as
the Other Holders. Notwithstanding the foregoing provisions, the Company may
withdraw any registration statement referred to in this Section 2 without
incurring any liability to the Holders.
(b) Piggyback Expenses. The Registration Expenses of the Holders
other than Stockholder Costs will be paid by the Company in all Piggyback
Registrations.
3. Registration Procedures. Whenever the Holders have requested that any
Registrable Securities be registered pursuant to the Demand Registration, the
Company will use its reasonable best efforts to effect the registration and the
sale of such Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto the Company will as expeditiously as
reasonably possible:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and use its
reasonable best efforts to cause such registration statement to become effective
(provided that before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company will furnish to one counsel
selected by the Requesting Holders copies of all such documents proposed to be
filed, which documents will be subject to the review of such counsel);
(b) furnish to Requesting Holders such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus)
such other documents as they may reasonably request in order to facilitate the
disposition of the Registrable Securities included in such registration
statement;
(c) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
the Holders reasonably request and do any and all other acts and things which
may be reasonably necessary or advisable to enable the Holders to consummate the
disposition in such jurisdictions of the
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Registrable Securities included in such registration statement (provided that
the Company will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subparagraph, (ii) subject itself to taxation in any such jurisdiction or (iii)
consent to general service of process in any such jurisdiction;
(d) notify the Holders, at any time when a prospectus relating to
Registrable Securities is required to be delivered under the Securities Act, of
the happening of any event as a result of which the prospectus included in such
registration statement may contain an untrue statement of material fact or may
omit any fact necessary to make the statements therein not misleading, and, at
the request of the Requesting Holders, the Company will prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any fact necessary to make the
statements therein not misleading;
(e) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the National Association of
Securities Dealers, Inc. ("NASD") automated quotation system if similar
securities issued by the Company are so listed and, if listed on the NASD
automated quotation system, use its reasonable best efforts to secure
designation of all such Registrable Securities covered by such registration
statement as a NASDAQ "national market system security" within the meaning of
Rule 11Aa2-1 of the Securities and Exchange Commission if similar securities
issued by the Company are so designated, and if the Registrable Securities are
traded on NASDAQ, use its reasonable best efforts to arrange for at least two
(2) market makers to register as such with respect to such Registrable
Securities with the NASD;
(f) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(g) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the Requesting
Holders or the underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities:
(h) make available for inspection upon reasonable notice during the
Company's regular business hours by the Requesting Holders, any underwriter
participating in any disposition pursuant to such registration statement and any
attorney, accountant or other agent retained by the Requesting Holders or any
such underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors,
employees and independent accountants to supply all information, reasonably
requested by any such underwriter, attorney, accountant or agent in connection
with such registration statement, provided, that prior thereto each party
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receiving such information shall agree in writing to reasonable and customary
non-disclosure and confidentiality provisions;
(i) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission, and
make available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of a least twelve (12) months beginning
with the first day of the Company's first full calendar quarter after the
effective date of the registration statement, which earnings statement shall
satisfy the provision of Section 11(a) of the Securities Act and/or Rule 158
thereunder;
(j) permit the Holders to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable judgment
of the Requesting Holders and their counsel should be included;
(k) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company will use its reasonable best efforts promptly to
obtain the withdrawal of such order;
(l) use its reasonable best efforts to cause such 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 Requesting Holders to consummate the disposition of such
Registrable Securities; and
(m) obtain a cold comfort letter from the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters as the Requesting Holders shall
reasonably request.
If any such registration or comparable statement refers to any Requesting Holder
by name or otherwise as the holder of any securities of the Company and if, in
its sole and exclusive judgment, such Requesting Holder is or might be deemed to
be a controlling person of the Company, the Requesting Holder shall have the
right to require (i) the insertion therein of language, in form and substance
satisfactory to the Requesting Holder and presented to the Company in writing,
to the effect that the holding by the Requesting Holder of such securities is
not to be construed as a recommendation by the Holder of the investment quality
of the Company's securities covered thereby and that such holding does not imply
that the Requesting Holder will assist in meeting any future financial
requirements of the Company, or (ii) in the event that such reference to the
Requesting 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 the
Requesting Holder; provided that with respect to this clause (ii) the Requesting
Holder shall furnish to the Company an opinion of counsel to
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such effect, which opinion and which counsel shall be reasonably satisfactory to
the Company.
In connection with the Demand Registration or a Piggyback Registration which
includes Registrable Securities, the Company may require the Holders to furnish
to the Company such information regarding the distribution of such securities as
the Company may from time-to-time reasonably request in writing. In connection
with any such registration hereunder, the Holders shall be deemed to agree that
(i) they shall deliver a copy of the then current prospectus (including any
amendment or supplement thereto) as required by Section 5(b) of the Securities
Act, (ii) they shall furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as reasonably shall
be requested and as is reasonably necessary in order to assure compliance with
applicable federal and state securities laws and (iii), upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 3(d), the Holder shall forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until the Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(d) hereof, and, if so directed by
the Company, the Holder shall 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.
4. Registration Expenses. All expenses incident to the Company's
performance or compliance with this Agreement, including without limitation all
registration, filing and listing fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, messenger and delivery expenses,
and fees and disbursements of counsel for the Company and the Holders and all
independent certified public accountants, underwriters (excluding discounts and
commissions) and other persons retained by the Company (all such expenses being
herein called "Registration Expenses") will be borne by the Company, except for
Stockholder Costs.
5. Indemnification.
(a) In the event of a registration of any of the Registrable
Securities under the Securities Act pursuant to Sections 1 or 2 hereof, the
Company agrees to indemnify, to the extent permitted by law, each Holder, its
officers and directors and each Person who controls such Holder (within the
meaning of the Securities Act) against all losses, claims, damages, liabilities
and expenses caused by any untrue or alleged untrue statement of material fact
contained in any registration statement under which any of the Registrable
Securities were registered under the Securities Act pursuant to Sections 1 or 2
hereof, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
insofar as the same are caused by or contained in any
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information furnished in writing to the Company by the Holder expressly for use
therein or by the Holder's failure to deliver a copy of the registration
statement or prospectus or any amendments thereof or supplements thereto after
the Company has furnished the Holders with a sufficient number of copies of the
same. In connection with an underwritten offering, the Company will indemnify
such underwriters, their officers and directors and each Person who controls
such underwriters (within the meaning of the Securities Act) to the same extent
as provided above with respect to the indemnification of the Holder.
(b) In connection with any registration statement in which a Holder
is participating, each Holder will furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to the extent
permitted by law, will indemnify the Company, its directors and officers and
each Person who controls the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses resulting from any
untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, but
only to the extent that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by such Holder.
(c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one (1) counsel for all parties indemnified by such
indemnifying party with respect to such claim.
(d) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and will survive the transfer of securities. The
indemnifying party also agrees to make such provisions as are reasonably
requested by any indemnified party for contribution to such party in the event
the indemnifying party's indemnification is unavailable for any reason.
6. Participation in Underwritten Registrations. No person may participate
in any registration hereunder which is underwritten unless such person (a)
agrees to sell such person's securities on the basis provided in any
underwriting arrangements approved by the
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person or persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
7. Obligation to Communicate with Holders. Upon the written request of any
Holder or Holders owning notes convertible into 10 percent or more of the
Registrable Securities, the Company shall deliver to such Holder or Holders the
names and addresses of all Holders for the purpose of allowing the requesting
Holder or Holders to communicate regarding a request for the Demand
Registration.
8. Lock-Up Agreements. The Holders agree not to directly or indirectly
effect any public sale or distribution (including without limitation any sales
pursuant to Rule 144 and Rule 144A promulgated pursuant to the Securities Act)
of equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the 180 day period
beginning on the effective date of the Initial Offering, or engage in any
hedging transaction with similar effect, unless the underwriters managing the
Initial Offering otherwise agree.
9. Miscellaneous.
(a) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of (i) the Company and the holders of a majority in interest of
the Registrable Securities if all Holders are treated the same by such amendment
or waiver or (ii) the Company and all of the Holders if certain of the Holders
are to be treated differently by such amendment or waiver (provided that it is
understood that any Holder shall have the right to waive his, her or its rights
without the consent of the other Holders).
(b) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not.
(c) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(d) Counterparts. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same Agreement.
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(e) Headings; Interpretation. The headings of this Agreement are
inserted for convenience only and do not constitute a Section of this Agreement.
The use of the word "including" in this Agreement shall be by way of example
rather than by limitation.
(f) Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
to the recipient, sent to the recipient by reputable express courier service
(charges prepaid) or mailed to the recipient by certified or registered mail,
return receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to the Holders and to the Company at the addresses
indicated below:
If to the Company: Century Electronics Manufacturing, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
With a copy to: Xxxxxxxx & Xxxxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxx, Esq.
If to the Holders: To the Addresses Shown on the Company's Records.
or to such other address or to the attention of such other person as the
recipient party requested in writing in accordance with this paragraph.
(g) Prior Rights. This Agreement supersedes and replaces all
registration rights of any nature which were previously granted by the Company
to any of the Holders under any document, instrument or agreement, and each
Holder agrees and acknowledges that all such prior rights are void and of no
effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first written above.
Century Electronics Manufacturing, Inc.
By /s/ X X Xxxxxxxxx
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X X Xxxxxxxxx
[HOLDERS' SIGNATURES APPEAR ON FOLLOWING PAGES]
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HOLDERS SIGNATURES
/s/ Xxxxxx Xxxxx /s/ Xxxx Xxxxxxxxx
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Xxxxxx Xxxxx Xxxx Xxxxxxxxx
/s/ Xxxxxx Xxxx /s/ Xxxxx Xxxxxxxxx
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Xxxxxx Xxxx Xxxxx Xxxxxxxxx
/s/ Xxxxx Xxxxx /s/ Xxxxxxx Xxxxxxx
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Xxxxx Xxxxx Xxxxxxx Xxxxxxx
/s/ Xxxxx Xxxxx /s/ Xxxxx Xxxxxxxxxxx
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Xxxxx Xxxxx, as Custodian under the Xxxxx Xxxxxxxxxxx
New York UGMA, for Gabrielle, Jaclyn,
Xxxxx and Xxxxxx Xxxxx, Tenants in Common
/s/ Xxxxxxxx Xxxxx
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Xxxxxxxx Xxxxx
S&R Holdings
/s/ Xxxxxxx Xxxxx
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By: /s/ S&R Holidngs Xxxxxxx Xxxxx
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EC Partners Xxxx Xxxxx, Xxxxxx Xxxxx
and Xxxxxxx Xxxxx,
By: /s/ EC Partners Tenants in Common
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/s/ Xxxx Xxxxx
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/s/ Xxxxxxxxx Xxxxx Xxxx Xxxxx
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Xxxxxxxxx Xxxxx
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
Xxxx Xxxxx May, Xxxxxxxx Xxxxx
and Xxxxxxx Xxxxx, Tenants in Common /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
/s/ Xxxx Xxxxx May
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Xxxx Xxxxx May
/s/ Xxxxxxxx Xxxxx
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Xxxxxxxx Xxxxx
/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
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