EXHIBIT 4.B
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of June 11,
2003, by and between Silicon Valley Bank ("Purchaser") and Parlex
Corporation, a Massachusetts corporation (the "Company").
RECITALS
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A. Concurrently with the execution of this Agreement, Purchaser is
acquiring from the Company a Warrant to Purchase Stock (the "Warrant")
pursuant to which Purchaser has rights to acquire from the Company the
Shares (as defined in the Warrant).
B. By this Agreement, Purchaser and the Company desire to set forth
the registration rights of the Shares as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
promises, covenants and conditions hereinafter set forth, the parties
hereto mutually agree as follows:
1. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term "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 of
1933, as amended, and the rules and regulations thereunder (the "Securities
Act"), and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "Registrable Securities" means (i) the Shares
issued and issuable upon exercise or conversion of the Warrant, and (ii)
any Common Stock or other securities of the Company issued as (or issuable
upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, the Shares.
(c) The terms "Holder" or "Holders" means Purchaser and
its qualifying transferees under subsection 1.8 hereof who hold Registrable
Securities.
(d) The term "SEC" means the United States Securities and
Exchange Commission or any successor agency administrating the Securities
Act.
(e) The terms "Form S-1," "Form S-3" etc. shall mean those
forms with such designations as are required by the SEC and any successor
or replacement forms adopted by the SEC.
1.2 Company Registration.
(a) Registration. If at any time or from time to time,
the Company shall determine to register any of its securities, for its own
account or the account of any of its shareholders, other than a
registration on Form S-8 relating solely to employee stock option or
purchase plans or on Form S-4 relating solely to an SEC Rule 145
transaction, or a registration on any registration form that does not
permit secondary sales, the Company will:
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(i) promptly give to each Holder written notice
thereof (which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the applicable
blue sky or other state securities laws); and
(ii) use its best efforts to include in such
registration (and qualifications), 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 or Holders, except as set forth in
subsection 1.2(c) below.
(b) Underwriting. If the registration of which the
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Holders as a part of the
written notice given pursuant to subsection 1.2(a)(i). In such event the
right of any Holder to registration pursuant to this subsection 1.2 shall
be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's 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 shareholders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting by the
Company.
(c) In the case of any registration of Common Stock by the
Company in an underwriting, if the managing underwriter(s) shall advise
the Company that marketing factors require a limitation on the number of
shares of Common Stock (or other securities convertible into or exercisable
or exchangeable for Common Stock) to be offered and sold by stockholders of
Company in such offering, there shall be included in the offering: (i)
first, all securities proposed by Company to be sold for its account; and
(ii) second, that number of shares of Common Stock, if any, requested to be
included in such registration statement by Holders and by other
stockholders of the Company having contractual rights to include shares in
such registration, on a pro rata basis based upon the number of shares of
Common Stock each Holder and each such other stockholder beneficially owns.
If any Holder or other person does not agree to the terms of such
underwriting or otherwise fails to comply with the terms of this Agreement,
he shall be excluded therefrom upon written notice from the Company or
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
(d) Notwithstanding any other provision herein contained,
the requirements of Section 1.2(a) above shall not apply with respect to
not more than one transaction commonly referred to as a "private investment
in public equity," or "PIPE," transaction, so long as (i) such transaction
is consummated within eight (8) months from the date hereof, and (ii) no
director or officer of the Company, and no holder of five percent (5%) or
more of the Company's outstanding Common Stock, shall have any shares of
Common Stock held by him, her or it included in the registration for such
PIPE transaction.
1.3 Expenses of Registration. All expenses incurred in
connection with any registration, qualification or compliance pursuant to
this Section 1 including without limitation, all registration, filing and
qualification fees, printing expenses, fees and disbursements of counsel
for the Company and expenses of any special audits incidental to or
required by such registration (but excluding underwriting fees, discounts
and commissions with respect to all Registrable Securities included within
such registration, which shall be the sole responsibility of the
participating Holders), shall be borne by the Company. All expenses of any
registered offering not otherwise borne by the Company will be borne pro
rata among the Holders, any other shareholders of the Company participating
in such offering and the Company.
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1.4 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep each Holder
participating therein advised in writing as to the initiation of each
registration, qualification and compliance and as to the completion
thereof. At its expense the Company will use its best efforts to:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to
cause such registration statement to become effective, and, upon the
request of the Holders of a majority of the Registrable Securities
registered thereunder, keep such registration statement effective for up to
120 days (the "Effective Period").
(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 Holders 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 such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, 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 states or
jurisdictions.
(e) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter of such offering.
Each Holder participating in such underwriting shall also enter into and
perform its obligations under such an agreement provided that all other
Holders participating in such offering do the same.
(f) Notify each Holder 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
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of
a material fact or omits 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.
1.5 Indemnification.
(a) The Company will indemnify each Holder of Registrable
Securities and each of its officers, directors and partners, and each
person controlling such Holder within the meaning of Section 15 of the
Securities Act ("controlling person"), and each underwriter, if any, and
each controlling person of such underwriter, with respect to which
registration, qualification or compliance of Registrable Securities has
been effected pursuant to this Registration Rights Agreement, against all
claims, losses, expenses, damages and liabilities (or actions in respect
thereto) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification
or
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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
statement therein not misleading, or any violation or alleged violation by
the Company of the Securities Act, the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder ("Exchange Act") or any
state securities law applicable to the Company or any rule or regulation
promulgated any such state law and relating to action or inaction required
of the Company in connection with any such registration, qualification or
compliance, and will reimburse each such Holder, each of its officers,
directors and partners, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, within a
reasonable amount of time after incurred for any reasonable legal and any
other expenses incurred in connection with investigating, defending or
settling any such claim, loss, damage, liability or action; provided,
however, that the indemnity agreement contained in this subsection 1.5(a)
shall not apply to amounts paid in settlement of any such claim, loss,
damage, liability, or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld or
delayed); and provided further, that the Company will not be liable in any
such case to the extent that any such claim, loss, damage or liability
arises out of or is based on any untrue statement or omission made in
reliance upon and conformity with written information furnished to the
Company specifically for use therein by an instrument duly executed by such
Holder or by an underwriter.
(b) Each Holder will, if Registrable Securities held by or
issuable to 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 and controlling persons, each
underwriter, if any, of the Company's securities covered by such a
registration statement, and each controlling person of such underwriter,
and each other Holder, each of its officers, directors, partners and
controlling persons, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) 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, partners, persons or underwriters within a reasonable
amount of time after incurred for any reasonable legal or any other
expenses incurred in connection with investigating, defending or settling
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 specifically for use therein by an instrument duly executed by such
Holder; provided, however, that the indemnity agreement contained in this
subsection 1.5(b) shall not apply to amounts paid in settlement of any such
claim, loss, damage, liability or action if such settlement is effected
without the consent of the Holder, (which consent shall not be unreasonably
withheld or delayed); and provided further, that the total amount for which
any Holder shall be liable under this subsection 1.5(b) shall not in any
event exceed the aggregate net proceeds received by such Holder from the
sale of Registrable Securities held by such Holder in such registration.
(c) Each party entitled to indemnification under this
subsection 1.5 (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 be unreasonably withheld or delayed), and
the Indemnified Party may participate in such defense at such party's
expense; and provided further,
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that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations hereunder,
unless such failure resulted in prejudice to the Indemnifying Party; and
provided further, that an Indemnified Party (together with all other
Indemnified Parties which may be represented without conflict by one
counsel) shall have the right to retain one separate 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 be inappropriate due to actual or potential differing interests
between such Indemnified Party and any other party represented by such
counsel in such proceeding. 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. Each
Indemnified Party shall furnish such information regarding itself or the
claim in question as an Indemnifying Party may reasonably request in
writing and shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
this Section 1.5 is due in accordance with its terms but for any reason is
judicially determined to be unenforceable against the Indemnifying Party or
otherwise unavailable to the Indemnified Party in respect to any losses,
claims, damages and liabilities referred to herein, then the Indemnifying
Party 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 to which such party may be subject
in such proportion as is appropriate to reflect the relative fault of the
Company, on the one hand, and the selling Holders, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The Company and Holders agree that it would not be just
and equitable if contribution pursuant to this Section 1.5(d) were
determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 1.5(d), (i) in no case shall
any Holder be liable or responsible for any amount in excess of the net
proceeds received by such Holder from the sale of Registrable Securities
pursuant to such registration; and (ii) no person adjudged 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 adjudged guilty of such fraudulent misrepresentation. Any party
entitled to contribution shall, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party
or parties under this Section 1.5(d), notify such party or parties from
whom contribution may be sought, but the omission so to notify such party
or parties from whom contribution may be sought shall not, in the absence
of actual prejudice to such party or parties, relieve it or them from such
contribution obligation. No party shall be liable for contribution with
respect to any action, suit, proceeding or claim settled without its
written consent, which consent shall not be unreasonably withheld or
delayed.
1.6 Information by Holder. Any Holder or Holders of Registrable
Securities included in any registration shall promptly furnish to the
Company such information regarding such Holder or Holders and the
distribution proposed by such Holder or Holders as the Company may request
in writing and as it shall deem required in connection with any
registration, qualification or compliance referred to herein.
1.7 Rule 144 Reporting. With a view to making available to
Holders the benefits of certain rules and regulations of the SEC which may
permit the sale of the Registrable Securities to the public without
registration, the Company agrees at all times use its best efforts to:
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(a) make and keep public information regarding the Company
available, as those terms are understood and defined in SEC Rule 144;
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and
(c) so long as a Holder owns any Registrable Securities,
to furnish to such Holder forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule
144, and of the Securities Act and the Exchange Act , a copy of the most
recent annual or quarterly report of the Company, and such other reports
and documents so filed by the Company as the Holder may reasonably request
in complying with any rule or regulation of the SEC allowing the Holder to
sell any such securities without registration.
1.8 Transfer of Registration Rights. Holders' rights to cause
the Company to register their securities and keep information available,
granted to them by the Company under subsections 1.2 and 1.7 may be
assigned to a transferee or assignee who acquires not less than twenty
percent (20%) of a Holder's Registrable Securities not sold to the public,
provided, that (i) the Company is given written notice by such Holder at
the time of or within sixty (60) days after said transfer or assignment,
stating the name and address of said transferee or assignee and identifying
the securities with respect to which such registration rights are being
assigned, and (ii) the transferee or assignee of such rights assumes in
writing the obligations of such Holder under this Agreement.
1.9 Delay of Registration. No Holder shall have any right to
take any action to restrain, enjoin, or otherwise delay any registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.10 "Market Stand-Off" Agreement. Each Holder hereby agrees
that it shall not, to the extent requested by the Company and an
underwriter, sell or otherwise transfer or dispose (other than to donees
who agree to be similarly bound) of any Registrable Securities during a
period of time, as agreed to by the Company and the underwriters, not to
exceed one hundred eighty (180) days, following the effective date of a
registration statement of the Company filed under the Securities Act for a
public offering of stock; provided, however, all officers and directors of
the Company and holders of more than five percent (5%) of the outstanding
voting securities of the Company enter into similar agreements. In order
to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Registrable Securities of each Holder
thereof until the end of such period.
1.11 Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 1 prior to the effectiveness of such registration whether or not
any Holder has elected to include securities in such registration. The
expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 1.3 hereof.
2. General.
2.1 Waivers and Amendments. With the written consent of the
record or beneficial holders of at least a majority of the Registrable
Securities, the obligations of the Company and the rights of the Holders of
the Registrable Securities under this agreement may be waived (either
generally or in a particular instance, either retroactively or
prospectively, and either
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for a specified period of time or indefinitely), and with the same consent
the Company, when authorized by resolution of its Board of Directors, may
enter into a supplementary agreement for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Agreement; provided, however, that no such modification,
amendment or waiver shall reduce the aforesaid percentage of Registrable
Securities without the consent of all of the Holders of the Registrable
Securities. Upon the effectuation of each such waiver, consent, agreement
of amendment or modification, the Company shall promptly give written
notice thereof to the record holders of the Registrable Securities who have
not previously consented thereto in writing, and any such waiver, consent
agreement of amendment or modification shall be binding upon all Holders of
Registrable Securities and each future Holder of all such Registrable
Securities. This Agreement or any provision hereof may be changed, waived,
discharged or terminated only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination
is sought, except to the extent provided in this subsection 2.1.
2.2 Governing Law. This Agreement shall be governed in all
respects by the laws of the Commonwealth of Massachusetts as such laws are
applied to agreements between Massachusetts residents entered into and to
be performed entirely within Massachusetts.
2.3 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and
be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto.
2.4 Entire Agreement. Except as set forth below, this Agreement
and the other documents delivered pursuant hereto constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
2.5 Notices, etc. All notices and other communications required
or permitted hereunder shall be in writing and shall be mailed by first
class mail, postage prepaid, certified or registered mail, return receipt
requested, addressed (a) if to Holder, at such Holder's address(es) as set
forth below, or at such other address(es) as such Holder or permitted
assignee shall have furnished to the Company in writing, or (b) if to the
Company, at the Company's address set forth below, or at such other address
as the Company shall have furnished to the Holder in writing. All such
notices and other written communications shall be deemed to be delivered
(i) if mailed, five (5) days after mailing and (ii) if delivered personally
by hand or nationally recognized courier, upon delivery.
2.6 Severability. In case any provision of this Agreement shall
be invalid, illegal, or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Agreement or any
provision of the other Agreement s shall not in any way be affected or
impaired thereby.
2.7 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
2.8 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
2.9 Information Confidential. Each party acknowledges that the
information received by them pursuant hereto may be confidential and for
its use only, and it will not use such confidential information in
violation of the Securities Act or Exchange Act or reproduce, disclose or
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disseminate such information to any other person (other than its employees
or agents having a need to know the contents of such information, and its
attorneys), except in connection with the exercise of rights under this
Agreement, unless the Company has made such information available to the
public generally or such party is required to disclose such information by
a governmental body.
2.10 Further Assurances. The parties agree, from time to time
and without further consideration, to execute and deliver such further
documents and take such further actions as may be reasonably required to
implement and effectuate the transactions contemplated in this Agreement.
2.11 No Third-Party Beneficiaries. Other than as specifically
provided herein, this Agreement is intended to inure to the benefit of the
parties hereto only, and no other party shall have any rights, express or
implied, by reason of this Agreement.
2.12 Saturdays, Sundays, Holidays, Etc. If the last or appointed
day for the taking of any action required or permitted hereby shall be a
Saturday, Sunday, a nationally recognized holiday, or a state holiday in
the Commonwealth of Massachusetts, then such action may be taken on the
next succeeding business day.
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IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be executed by their duly authorized representatives as of the
date first above written.
PURCHASER COMPANY
SILICON VALLEY BANK PARLEX CORPORATION
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------- ------------------------
Name: Xxxxx Xxxxxxxxx Name: Xxxxxxxx X. Xxxxxxx
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(print) (print)
Title: Vice President Chief Financial Officer
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copy to: Silicon Valley Bank
Treasury Department
0000 Xxxxxx Xxxxx, XX 000
Xxxxx Xxxxx, XX 00000
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