REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of March
30, 1998, is among EFTC CORPORATION, a Colorado corporation ("Parent"), and the
undersigned SHAREHOLDERS (individually a "Shareholder" and together, the
"Shareholders") of Parent.
RECITALS
A. Parent, RM Electronics Acquisition Corporation, a New Hampshire
corporation ("Merger Sub"), and RM Electronics, Inc., a New Hampshire
corporation d/b/a Personal Electronics, Inc. ("Personal Electronics"), have
entered into an Agreement and Plan of Reorganization, dated as of March 30, 1998
(the "Reorganization Agreement"), pursuant to which Merger Sub was merged with
and into Personal Electronics and the Shareholders received in consideration
therefor, among other things, shares of Common Stock, $.01 par value, of Parent
("Parent Common Stock").
B. This Agreement is executed and delivered pursuant to Section 8.2(d)
of the Reorganization Agreement and sets forth the terms on which the
Shareholders may require Parent to register, under the Securities Act (as
defined in Article I), securities of Parent owned by them.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms shall have the following meanings as used in this
Agreement:
1.1 "Agreement" has the meaning set forth in the opening statement
of this Agreement.
1.2 "Effectiveness Period" has the meaning set forth in Section 2.1.
1.3 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations
promulgated thereunder.
1.4 "Initial Sale Date" means the first day as of which (a) the Shelf
Registration has become effective and (b) Parent has publicly disseminated, by
means of a quarterly report on Form 10-Q under the Exchange Act, financial
statements that include 30 days of combined operations of Personal Electronics
and Parent.
1.5 "Indemnified Party" has the meaning set forth in Section 6.3.
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1.6 "Indemnifying Party" has the meaning set forth in Section 6.3.
1.7 "Losses" has the meaning set forth in Section 6.1.
1.8 "Merger Sub" has the meaning set forth in Recital A.
1.9 "Parent" has the meaning set forth in the opening statement of
this Agreement.
1.10 "Parent Common Stock" has the meaning set forth in Recital A.
1.11 "Person" means any individual, corporation, partnership, limited
liability company, trust, organization, association, governmental body or
agency.
1.12 "Personal Electronics" has the meaning set forth in Recital A.
1.13 "Piggyback Registration" has the meaning set forth in Section
3.1.
1.14 "Pro Rata Share" has the meaning set forth in Section 6.2.
1.15 "Registrable Securities" means any outstanding shares of Parent
Common Stock held by the Shareholders on the date hereof and any securities
issued or issuable with respect thereto by way of stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation, reclassification or other reorganization. A Registrable Security
shall cease to be a Registrable Security when: (a) a Registration Statement with
respect to the sale of such security shall have become effective under the
Securities Act and such security shall have been disposed of in accordance with
such Registration Statement; (b) such security shall have been distributed to
the public pursuant to Rule 144 (or any successor provision) under the
Securities Act; (c) such security shall have been otherwise transferred, new
certificates for which, not bearing a legend restricting further transfer, shall
have been delivered by Parent and subsequent disposition of the security shall
not require registration or qualification of such security under the Securities
Act or any similar state law then in force, or (d) such security shall have
ceased to be outstanding.
1.16 "Registration Expenses" means all expenses incident to Parent's
performance of or compliance with this Agreement, including, all registration
and filing fees, fees and expenses of compliance with federal and state
securities laws, printing expenses, messenger and delivery expenses, and fees
and disbursements of counsel for Parent and, in the case of registration
pursuant to Section 2.1 only, reasonable and customary fees and disbursements of
one counsel for the Shareholders, which counsel shall be reasonably acceptable
to Parent, and all independent certified public accountants, underwriters
(excluding underwriting discounts, commissions spreads or fees of underwriters,
selling brokers, dealer managers or similar securities industry professionals),
and other Persons retained by Parent for the purpose of fulfilling its
obligations under this Agreement.
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1.17 "Registration Statement" means any registration statement or
comparable document under Section 5 of the Securities Act through which a public
sale or disposition of Registrable Securities may be registered.
1.18 "Reorganization Agreement" has the meaning set forth in Recital
A.
1.19 "SEC" means the Securities and Exchange Commission or any other
federal agency administering the Securities Act.
1.20 "Securities Act" means the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of promulgated
thereunder.
1.21 "Shareholder" and the "Shareholders" have the meanings set
forth in the opening statement of this Agreement.
1.22 "Shelf Registration" has the meaning set forth in Section 2.1.
1.23. "Subsequent Shelf Registration" has the meaning set forth in
Section 2.1.
ARTICLE II
SHELF REGISTRATION
2.1 Shelf Registration. (a) Parent shall prepare and file with the SEC,
on or prior to the date 90 days following the Closing Date under the
Reorganization Agreement, a Registration Statement for an offering to be made on
a continuous basis pursuant to Rule 415 of the Securities Act (a "Shelf
Registration") registering the resale from time to time by holders thereof of up
to 600,000 shares of the Parent Common Stock (and any securities issued or
issuable with respect thereto by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation, reclassification or other reorganization). The Shelf Registration
shall be on Form S-3. If the holders of Registrable Securities so elect, an
offering of Registrable Securities pursuant to the Shelf Registration may be
effected in the form of an underwritten offering. In any underwritten offering,
the holders of a majority of the Registrable Securities requested to be sold
shall select the Managing Underwriter (subject to the consent of Parent, which
consent shall not be unreasonably withheld) of such underwritten offering.
Parent shall use reasonable best efforts to cause the Shelf Registration to be
declared effective under the Securities Act as promptly as practicable (and in
any case reasonable best efforts to cause the Shelf Registration to be declared
effective by August 15, 1998) and keep the Shelf Registration continuously
effective under the Securities Act for a period (the "Effectiveness Period")
commencing on the date the Shelf Registration becomes effective and ending on
the earlier of (i) the first anniversary (subject to certain extensions provided
for herein) of the Initial Sale Date, or (ii) the date all Registrable
Securities covered by such Registration Statement have been sold. It is
understood that Parent has granted registration rights to other holders of
Parent Common Stock who may elect to have such securities included in the Shelf
Registration. The Effectiveness Period shall be extended past the first
anniversary of the Initial Sale Date (but not
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past the date on which all Registrable Securities covered by the Shelf
Registration are sold) by a number of days equal to the actual number of days
during the Effectiveness Period that the holders of Registrable Securities are
not permitted to sell any Registrable Securities due to Parent's exercise of its
rights under Section 2.3 or Section 5.1 or due to the issuance of a stop order
as described in Section 2.1(b).
(b) If the initial Shelf Registration ceases to be effective
for any reason as a result of the issuance of a stop order by the SEC at any
time during the Effectiveness Period, Parent shall use its reasonable best
efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within 30 days of such cessation
of effectiveness amend the Shelf Registration in a manner reasonably expected to
obtain the withdrawal of the order suspending the effectiveness thereof, or file
an additional Shelf Registration covering all of the Registrable Securities (a
"Subsequent Shelf Registration"). If a Subsequent Shelf Registration is filed,
Parent shall use its reasonable best efforts to cause the Subsequent Shelf
Registration to be declared effective as soon as practicable after such filing
and to keep such Subsequent Shelf Registration continuously effective until the
end of the Effectiveness Period.
2.2 Underwritten Offerings; Priority on Shelf Registrations. If the
Shelf Registration is an underwritten offering, Parent may elect to include
other securities in such registration on the same terms and conditions as the
Registrable Securities to be included in such registration; provided however, if
the managing underwriters advise Parent in writing that in their opinion the
number of Registrable Securities and other securities to be included in the
registration exceeds the number that can be sold in such offering at a price
satisfactory to the holders of a majority of the Registrable Securities
requested to be included in such registration, Parent will give priority for
inclusion in such registration: (a) first, to the Registrable Securities
requested to be included in such registration (or to such lesser number of
Registrable Securities that is equal to the number that, in the opinion of the
managing underwriters, can be sold, pro rata among the holders thereof based on
the number of Registrable Securities owned), (b) second, to the securities, if
any, requested to be included in such registration pursuant to warrants or
options issued to the representatives of the underwriters with respect thereto;
(c) third, to the securities Parent proposes to include in such registration;
(d) fourth, to the securities that Parent is otherwise obligated to include in
such registration; and (e) fifth, to other securities that Parent may desire to
include in such registration.
2.3 Restrictions on Shelf Registration. Notwithstanding anything in
this Article II to the contrary, if Parent shall furnish to the holders of
Registrable Securities a certificate signed by the Chief Executive Officer or
President of Parent stating that, in the good faith reasonable judgment of the
Board of Directors of Parent, the filing or effectiveness of such Shelf
Registration would materially interfere with any financing, acquisition or
reorganization involving Parent or any of its wholly-owned subsidiaries or would
otherwise have a material adverse effect on Parent or the selling holders (other
than the holders of the Registrable Securities under this Agreement) if
undertaken at the time requested, Parent shall have the right to defer such
filing or effectiveness or suspend the sale by the holders of the Registrable
Securities under this Agreement for a period of not more than 90 days after the
date of such
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certificate. Parent will not provide any such certificate to the Shareholders
within 90 days of the end of any prior period during the Effectiveness Period
during which the holders of Registrable Securities are not permitted to sell any
Registrable Securities due to Parent's exercise of its rights under this Section
2.3 or Section 5.1.
2.4 Expenses. Except as otherwise provided in this Article II, Parent
will pay all Registration Expenses in connection with the Shelf Registration. If
the Shelf Registration is an underwritten offering, all underwriting discounts,
commissions spreads or fees of underwriters, selling brokers, dealer managers or
similar securities industry professionals relating to the Registrable Securities
being offered thereby will be paid by the holders thereof pro rata based on the
number of Registrable Securities that each such holder has requested be
registered.
ARTICLE III
PIGGYBACK REGISTRATION
3.1 Right to Piggyback. Whenever Parent proposes to register any of its
securities under the Securities Act (other than (a) in the Shelf Registration
pursuant to Section 2.1; (b) as a registration of securities in connection with
a merger, an acquisition, an exchange offer, other business combination or an
employee benefit plan maintained by Parent or its subsidiaries; or (c) as a
registration of securities on Form S-4 or S-8 or any successor or similar form)
and the registration form to be used may be used for the registration of
Registrable Securities (a "Piggyback Registration"), Parent will give prompt
written notice to all holders of Registrable Securities of its intention to
effect such a registration and will include in such registration, subject to
Section 3.3, all Registrable Securities with respect to which Parent has
received written requests for Piggyback Registration within fifteen (15) days
after Parent's notice is given to the holders of Registrable Securities;
provided that Parent shall not be required to include any Registrable Securities
in such registration unless at least 20% of the Registrable Securities then
outstanding are requested to be included in such registration.
3.2 Piggyback Expenses. Parent will pay all Registration Expenses in
connection with a Piggyback Registration. In a Piggyback Registration that is an
underwritten offering, all underwriting discounts, commissions spreads or fees
of underwriters, selling brokers, dealer managers or similar securities industry
professionals relating to the Registrable Securities being offered thereby will
be paid by the holders thereof pro rata based on the number of Registrable
Securities that each such holder has requested be registered.
3.3 Restrictions on Piggyback Registrations. Notwithstanding anything
to the contrary in this Article III: (a) if, at any time after receiving such
requests and prior to the effective date of the Registration Statement filed in
connection with the Piggyback Registration, Parent for any reason decides not to
register securities of Parent, Parent will give written notice of its decision
to the holders of Registrable Securities and thereupon be relieved of its
obligation to register any Registrable Securities in connection with such
registration; and (b) if Parent determines for any reason to delay a Piggyback
Registration, Parent may do so by giving written notice of its decision to the
holders of Registrable Securities.
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3.4 Priority on Underwritten Primary Registrations. If a Piggyback
Registration is an underwritten offering initiated on behalf of Parent and the
managing underwriters advise Parent in writing that in their opinion the number
of securities to be included in such registration exceeds the number that can be
sold in such offering at a price satisfactory to Parent, Parent will give
priority for inclusion in such registration: (a) first, to the securities Parent
proposes to include in such registration; (b) second, to the securities, if any,
requested to be included in such registration pursuant to warrants or options
issued to the representatives of the underwriters with respect thereto; (c)
third, securities that Parent has become, prior to the date hereof, otherwise
obligated to include in such registration; (d) fourth, to the Registrable
Securities requested to be included in such registration (or to such lesser
number of Registrable Securities, which is equal to the number that, in the
opinion of the managing underwriters, can be sold, pro rata among the holders
thereof based on the number of Registrable Securities owned); and (e) fifth, to
other securities that Parent may desire or be obligated to include in such
registration.
3.5 Priority on Underwritten Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
Parent's securities, and the managing underwriters advise Parent in writing that
in their opinion the number of securities requested to be included in the
registration exceeds the number that can be sold in the offering, Parent will
give priority for inclusion in such registration: (a) first, to the securities
requested to be included by the holders requesting such registration; (b)
second, to the securities sought to be included in such registration pursuant to
the warrants or options issued to the representatives of the underwriters with
respect thereto; (c) third, to the Registrable Securities requested to be
included in such registration (or to such lesser number of Registrable
Securities, which is equal to the number that, in the opinion of the managing
underwriters, can be sold, pro rata among the holders thereof based on the
number of Registrable Securities owned), and (d) fourth, to other securities
that Parent may desire or be obligated to include in such registration.
3.6 Third-Party Registration Rights. This Agreement is in all cases
subject to the contractual registration rights granted pursuant to (a) the
Registration Rights Agreement between Parent and certain of its shareholders
dated January 1994, (b) the Registration Rights Agreement between Parent and
certain former shareholders of Current Electronics, Inc. dated February 24,
1997, (c) the Registration Rights Agreement between Parent and certain former
shareholders of Circuit Test, Inc. dated September 30, 1997 and (d) the warrants
to purchase an aggregate of 80,000 shares of Parent Common Stock held by
Xxxxxxxx, Inc. and Xxxx Xxxxxxxx Incorporated. Parent will not grant to any
holder of Parent's securities any registration rights ranking senior to or on a
parity with the rights granted hereunder with respect to priority upon
underwritten registrations.
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ARTICLE IV
REGISTRATION PROCEDURES
4.1 Procedures Parent Will Follow. Except as otherwise provided herein,
whenever the holders of the Registrable Securities duly request that any
Registrable Securities be registered pursuant to this Agreement, Parent will use
its best efforts to effect the registration of the Registrable Securities on a
form available under the Securities Act for which Parent then qualifies and that
counsel for Parent deems appropriate and which form is available for the sale of
the Registrable Securities in accordance with the intended method of
disposition, and pursuant thereto Parent will do the following as expeditiously
as possible:
(a) Registration Statement. Except as otherwise provided
herein, Parent will prepare and file with the SEC, and use its best efforts to
cause to become effective, a Registration Statement with respect to the
Registrable Securities Parent has been so requested to register on a form
available under the Securities Act for which Parent then qualifies and that
counsel for Parent deems appropriate and which form is available for the sale of
the Registrable Securities in accordance with the intended method of
disposition.
(b) Maintenance of Effectiveness. Except with respect to the
Shelf Registration pursuant to Section 2.1, which will be maintained and kept
effective in accordance with Article II hereof, Parent will prepare and file
with the SEC such amendments and supplements to the Registration Statement and
prospectus used for the sale of the Registrable Securities as may be necessary
to keep the Registration Statement effective until the earlier of: (i) the date
on which the sale of the Registrable Securities is completed and (ii) the date
ninety (90) days after the Registration Statement with respect to the
Registrable Securities becomes effective, and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by the
Registration Statement during its effectiveness in accordance with the intended
methods of disposition of such securities.
(c) Copies of Prospectuses. Parent will furnish to the holders
the number of copies of the Registration Statement, each amendment and
supplement thereto, the prospectus included in the Registration Statement
(including each preliminary prospectus) and such other documents that the
holders may reasonably request to facilitate the disposition of the Registrable
Securities Parent has been so requested to register. At any time when a
prospectus with respect to the Registrable Securities is required to be
delivered under the Securities Act, Parent will notify the holders of the
occurrence of any material change in the information contained in the prospectus
included in the Registration Statement. Whenever in Parent's judgment it is
necessary, Parent will prepare a supplement or amendment to the prospectus so
that, as thereafter delivered to the proposed purchasers of the Registrable
Securities, the prospectus will not contain, to Parent's knowledge, any untrue
statement of material fact or omit to state any fact necessary to make the
statements in it not misleading, and the holders will discontinue disposition of
the Registrable Securities until the holders are advised in writing by Parent
that the use of the prospectus may be resumed and are furnished with a
supplement or amendment to the prospectus. If Parent shall give any notice to
suspend the disposition of Registrable Securities
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pursuant to a prospectus, Parent shall extend the period of time during which
Parent is required to maintain the Registration Statement effective pursuant to
this Agreement by the number of days during the period from and including the
date of the giving of such notice through and including the date the holders are
advised by Parent that the use of the prospectus may be resumed or have received
the copies of the supplement or amendment to the prospectus.
(d) Blue Sky Compliance. Parent will use its best efforts to
register or qualify the Registrable Securities Parent has been so requested to
register under the securities or blue sky laws of such jurisdictions within the
United States of America as any holder of Registrable Securities selling
Registrable Securities in connection with the registration reasonably requests,
and do any and all other acts and things reasonably necessary or advisable to
enable the holder to dispose of the holder's Registrable Securities in such
jurisdictions; except Parent will not be required to: (i) qualify generally to
do business in any jurisdiction where it is not then so qualified or (ii)
consent to, or take any action that would subject it to, general service of
process or taxation in any jurisdiction where it is not then so subject.
(e) Listing; Transfer Agent. Parent will use its best efforts
to cause all such Registrable Securities to be listed on all securities
exchanges or quoted on all automated quotation systems on which securities of
the same class issued by Parent are then listed or quoted and will provide a
transfer agent and registrar for all such Registrable Securities no later than
the effective date of the Registration Statement.
(f) Customary Agreements. In the case of an underwritten
offering, Parent will enter into customary agreements, including an underwriting
agreement in customary form, as the holders of a majority of the Registrable
Securities being registered or the underwriters, if any, reasonably request in
order to expedite or facilitate the disposition of the Registrable Securities
being so registered.
(g) Certain Information. Parent will make available for
inspection upon reasonable request by any holder of Registrable Securities being
registered, any underwriter participating in any disposition pursuant to the
Registration Statement, and any attorney, accountant or other agent retained by
the holder or underwriter, all financial and other records, pertinent corporate
documents and properties of Parent, and cause Parent's officers, directors and
employees to supply all information reasonably requested by the holder,
underwriter, attorney, accountant or agent in connection with the Registration
Statement, upon receipt by Parent of confidentiality agreements satisfactory to
Parent.
(h) Compliance with Law. Parent will comply with all rules and
regulations of the SEC and applicable state securities laws governing the manner
of sale of securities in connection with the disposition of any Registrable
Securities pursuant to any Registration Statement.
(i) Stop-Orders. Parent will promptly notify all holders of Registrable
Securities being registered of its receipt of: (i) any stop-order, injunction or
order suspending the effectiveness of any Registration Statement covering any
Registrable Securities or, to Parent's
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knowledge, the initiation of any proceeding for that purpose, or (ii) any
notification with respect to the limitation, restriction or suspension of the
offer or sale of any Registrable Securities in any jurisdiction in which the
Registrable Securities were qualified to be sold or, to Parent's knowledge any
proceeding for that purpose. If Parent notifies the holders of any such event,
the holders will immediately discontinue all sales or other dispositions of the
Registrable Securities pursuant to the Registration Statement until Parent
notifies the holders that such stop-order, injunction, order, limitation,
restriction or suspension has been lifted, except, unless Parent notifies the
holders otherwise, if a stop-order, injunction, order, limitation, restriction
or suspension issued by a state securities or blue sky administrator applies
only to offers and sales in such state, the holders will immediately discontinue
all sales and other disposition of the Registrable Securities in such state.
Parent, with cooperation of the holders, will use its reasonable efforts to
contest any such proceeding and to obtain the withdrawal of any such stop-
order, injunction, order, limitation, restriction or suspension.
4.2 Procedures Holders of Registrable Securities Will Follow. Whenever
the holders of the Registrable Securities duly request that any Registrable
Securities be registered pursuant to this Agreement, the holders will do the
following as expeditiously as possible:
(a) Certain Information. The holders will provide Parent with
such information and affidavits about the holders and the intended manner of
disposition of the Registrable Securities and otherwise use their best efforts
to cooperate with Parent and the underwriters, if any, Parent may require to
satisfy any obligation of Parent under this Agreement to register the
Registrable Securities under federal and state securities laws and otherwise
take actions related thereto. If any holder fails to provide the information
required under this Section 4.2(a), Parent may exclude such holder's Registrable
Securities from the registration. The holders will notify Parent of the
occurrence of any material change in the information provided by them that is
contained in the prospectus included in the Registration Statement, as then in
effect. Whenever in Parent's judgment it is necessary, Parent will prepare a
supplement or amendment to the prospectus so that, as thereafter delivered to
the proposed purchasers of the Registrable Securities, the prospectus will not
contain, to Parent's knowledge, any untrue statement of material fact or omit to
state any fact necessary to make the statements in it not misleading, and the
holders will discontinue disposition of the Registrable Securities until the
holders are advised in writing by Parent that the use of the prospectus may be
resumed and are furnished with a supplement or amendment to the prospectus. If
Parent shall give any notice to suspend the disposition of Registrable
Securities pursuant to a prospectus, Parent shall extend the period of time
during which Parent is required to maintain the Registration Statement effective
pursuant to this Agreement by the number of days during the period from and
including the date of the giving of such notice through and including the date
the holders are advised by Parent that the use of the prospectus may be resumed
or receive the copies of the supplement or amendment to the prospectus.
(b) Compliance with Law. The holders will comply with all
rules and regulations of the SEC and applicable state securities laws governing
the manner of sale of securities in connection with the disposition of any
Registrable Securities pursuant to any Registration Statement.
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(c) Participation in Underwritten Offerings. No holder of
Registrable Securities may participate in any underwritten offering hereunder
unless such holder: (i) agrees to sell such holder's securities on the basis
provided in any underwriting arrangements approved, subject to the terms and
conditions hereof, by the holders of a majority (by number of shares) of
Registrable Securities to be included in such underwritten offering and (ii)
completes and executes all questionnaires, indemnities, underwriting agreements
and other documents reasonably required under the terms of such underwriting
arrangements.
ARTICLE V
BLACK OUT PERIODS
5.1 Restrictions on Public Sale by Holders. Whenever Parent proposes to
register any of its securities under the Securities Act in an underwritten
offering (other than (a) the Shelf Registration; (b) a registration of
securities in connection with a merger, an acquisition, an exchange offer, other
business combination or an employee benefit plan maintained by Parent or its
subsidiaries; or (c) a registration of securities on Form S-4 or S-8 or any
successor or similar form) and if requested by the managing underwriters, each
holder of Registrable Securities will not effect any public sale or disposition
of securities of Parent the same as or similar to those being registered, or any
securities convertible into or exchangeable or exercisable for such securities,
including a sale pursuant to Rule 144 under the Securities Act, except as part
of such registration, during the 14-day period prior to, and during the 90-day
period (or, with respect to a Piggyback Registration, such longer period of up
to 120 days as may reasonably be requested by such managing underwriters)
beginning on the effective date of the related Registration Statement, to the
extent timely notified in writing by Parent or the managing underwriters;
provided that such restriction will not commence on any date that is earlier
than 90 days after the end of a prior period during the Effectiveness Period
during which the holders of Registrable Securities are not permitted to sell any
Registrable Securities due to Parent's exercise of its rights under Section 2.3
or this Section 5.1.
5.2 Restrictions on Public Sale by Parent and Others. If the Shelf
Registration is an underwritten offering and if requested by the managing
underwriters, Parent will not effect any public sale or disposition of any
securities the same as or similar to those being registered by Parent, except as
part of such registration, during the 14-day period prior to, and during the 90-
day period beginning on the effective date of the related Registration Statement
to the extent timely notified in writing by the managing underwriters.
Notwithstanding anything to the contrary in the foregoing, the restrictions
under this Section 5.2 shall not limit the issuance of securities of Parent, or
options or warrants to purchase such securities, that Parent is required to
issue pursuant to: (a) any employee stock option plan or non-employee director
stock option plan in effect at the time; (b) the exercise of any outstanding
options or warrants with respect to securities of Parent; or (c) the exercise of
any conversion or exchange right in accordance with the terms of any other
security convertible into or exchangeable for securities the same as or similar
to those being registered by Parent.
ARTICLE VI
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INDEMNIFICATION
6.1 Indemnification by Parent. Parent will indemnify and hold harmless,
to the extent permitted by law, each holder of Registrable Securities and, if
applicable, the officers and directors of the holder, and each Person who
controls the holder (within the meaning of the Securities Act or the Exchange
Act) from and against any action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, injunction, judgment, order, decree, ruling,
damage, dues, penalty, fines, costs, amounts paid in settlement, liabilities,
obligations, losses, expenses and fees, including court costs and attorneys'
fees and expenses (collectively, "Losses") that the holder and, if applicable,
the officers and directors of the holder, and each Person who controls the
holder may suffer through and after the date of the claim for indemnification
caused by or arising out of any untrue or alleged untrue statement of material
fact contained in any Registration Statement, prospectus, preliminary
prospectus, or other related filing with the SEC or any other federal or state
governmental agency, 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, except insofar as the same are caused by or contained in
any information furnished in writing to Parent by any holder of Registrable
Securities expressly for use therein or by any holder's failure to comply with
any legal requirement applicable to such holder and not contractually assumed by
Parent to deliver a copy of the Registration Statement or prospectus or any
amendments or supplements thereto after Parent has furnished the holder with a
sufficient number of copies of the same. In connection with an underwritten
offering, Parent shall indemnify the underwriters, their officers and directors,
and each Person who controls the underwriters (within the meaning of the
Securities Act or the Exchange Act) to the extent customary.
6.2 Indemnification by Holders. In connection with any registration in
which a holder of Registrable Securities is participating, each such holder will
indemnify and hold harmless, to the extent permitted by law, Parent, its
directors and officers and each Person who controls Parent (within the meaning
of the Securities Act or the Exchange Act) from and against the holder's Pro
Rata Share (as defined in this Section 6.2) of all Losses that Parent, its
directors and officers and each Person who controls Parent may suffer through
and after the date of the claim for indemnification caused by or arising out of
any untrue or alleged untrue statement of material fact contained in any
Registration Statement, prospectus, preliminary prospectus, or other related
filing with the SEC or any other federal or state governmental agency, 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, but
only to the extent that the same are caused by or contained in any information
furnished in writing to Parent by any holder of Registrable Securities expressly
for use therein or by any holder's failure to comply with any legal requirement
applicable to such holder and not contractually assumed by Parent to deliver a
copy of the Registration Statement or prospectus or any amendments or
supplements thereto after Parent has furnished the holder with a sufficient
number of copies of the same; provided that in no event shall any holder of
Registrable Securities be responsible for any amount in excess of the net
proceeds received by such holder in connection with the sale of Registrable
Securities under such Registration Statement. For purposes of the foregoing, a
holder's "Pro Rata Share" means that fraction equal to the amount of the
proceeds received or to be received by the holder in
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connection with the registration over the total proceeds received or to be
received by all holders in connection with the registration.
6.3 Indemnification Procedure. If any Person has a claim for Losses
hereunder (an "Indemnified Party"), the Indemnified Party will: (a) notify the
party or parties hereto from which it is entitled to make such claim
(individually, an "Indemnifying Party" and, together, the "Indemnifying
Parties") of such claim, specifying the nature of the Losses and the amount or
estimated amount thereof if feasible, and (b) unless in the Indemnified Party's
reasonable judgment (based on written advice of counsel) a conflict of interest
between the Indemnified Party and the Indemnifying Parties may exist with
respect to the matter giving rise to such claim, permit the Indemnifying Party
to assume and thereafter conduct the defense of the matter with counsel of the
Indemnifying Party's choice reasonably satisfactory to the Indemnified Party. If
the defense is so assumed, the Indemnifying Party will not be subject to any
liability for any settlement made with respect to such claim by the Indemnified
Party without its consent, which 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
counsel for all parties it indemnifies with respect to such claim, unless in the
reasonable judgment of any Indemnified Party (based on written advice of
counsel) a conflict of interest may exist between such Indemnified Party and any
other Indemnified Parties with respect to such claim.
ARTICLE VII
GENERAL PROVISIONS
7.1 Remedies. Any Person having rights under this Agreement will be
entitled to enforce them specifically, to recover damages caused by reason of
any breach of any provision of this Agreement, and to exercise all other rights
granted by law.
7.2 Successors and Assigns. This Agreement will bind and inure to the
benefit of the respective successors and assigns of the parties hereto, whether
so expressed. Any provision of this Agreement for the benefit of the holders of
Registrable Securities is also for the benefit of, and enforceable by, any
subsequent holder of Registrable Securities to which the subsequent holder has
been expressly assigned such rights at the time of the transfer of the
Registrable Securities to him, but not otherwise.
7.3 Term; Effect of Expiration or Termination. This Agreement shall be
effective as of the date hereof, and unless earlier terminated in accordance
with this Agreement, shall expire on the earliest of: (a) three years from the
date of this Agreement (subject to extension for up to 90 days after the end of
any period during the Effectiveness Period during which the holders of
Registrable Securities are not permitted to sell any Registrable Securities due
to Parent's exercise of its rights under Section 2.3 or Section 5.1 and that
ends less than 90 days before such third anniversary) or (b) such time as all
Registrable Securities have been sold pursuant to an effective Registration
Statement under the Securities Act. Moreover, this Agreement shall terminate as
to any Shareholder at such time as such Shareholder can then publicly sell all
of its Registrable
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Securities without registration under the Securities Act during a three-month
period pursuant to Rule 144 under the Securities Act or otherwise. In the event
of termination or expiration of this Agreement, this Agreement shall forthwith
become void and there shall be no liability or obligation on the part of the
parties hereto, except the provisions of Article VI (Indemnification) and this
Article VII (General Provisions) shall remain in full force and effect and
survive any termination of this Agreement.
7.4 Amendments; Modifications. This Agreement may be amended or modified in
writing by Parent and the holders of a majority of the Registrable Securities at
the time of such amendment or modification.
7.5 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail, return receipt
requested, or sent via facsimile, with confirmation of receipt, to the parties
at the following address or at such other address for a party as shall be
specified by notice hereunder:
(a) if to Parent, to:
EFTC Corporation
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Facsimile No.: (000) 000-0000
(b) if to the Shareholders, to:
Personal Electronics, Inc.
0 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
7.6 Entire Agreement. This Agreement and the documents and instruments
and other agreements specifically referred to herein or delivered pursuant
hereto constitute the entire agreement among the parties hereto with respect to
the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties hereto with respect to the subject
matter hereof.
7.7 Severability. In the event that any provision of this Agreement, or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties hereto further agree to
replace
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such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
7.8 Remedies Cumulative; No Waiver. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. No failure or delay
on the part of any party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty or agreement herein, nor shall any single
or partial exercise of any such right preclude other or further exercise thereof
or of any other right.
7.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado (without regard to the
principles of conflicts of law thereof).
7.10 Rules of Construction. The parties hereto agree that they have
been represented by counsel during the negotiation, preparation and execution of
this Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or
document.
7.11 Interpretation. When a reference is made in this Agreement to
Articles, Recitals or Sections, such reference shall be to an Article, Recital
or Section to this Agreement unless otherwise indicated. The words "include,"
"includes" and "including" when used herein shall be deemed in each case to be
followed by the words "without limitation." The phrase "made available" in this
Agreement shall mean that the information referred to has been made available if
requested by the party hereto to whom such information is to be made available.
The table of contents and Article and Section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. In this Agreement, any reference to
a party's "knowledge" means such party's actual knowledge after due and diligent
inquiry of officers, directors and other employees of such party reasonably
believed to have knowledge of such matters. Whenever the context may require,
any pronoun shall include the corresponding masculine, feminine and neuter
forms.
7.12 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties hereto and delivered to the other parties hereto, it being
understood that all parties hereto need not sign the same counterpart.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Registration Rights Agreement as of the date first written above.
Parent:
EFTC CORPORATION,
a Colorado corporation
By: /s/ Xxxx Xxxxxxxx
Shareholders:
/s/ Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
