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EXHIBIT 10.29
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is entered into
as of the 15th day of May, 2000, between Saturn Electronics & Engineering,
Inc., a Michigan corporation (the "Company"), MascoTech, Inc., a Delaware
corporation ("MascoTech") and Xx. Xxxxxxx X. Xxxxx, Xx., the Xxxxxxx X. Xxxxx
Grantor Retained Annuity Trust U/A/D 5/18/98, the Xxxxxxx X. Xxxxx Trust dated
10/14/91, the Xxxxxxx X. Xxxxx Grantor Retained Annuity Trust U/A/D 9/23/93, the
Xxxxxxx X. Xxxxx Grantor Retained Annuity Trust U/A/D 11/7/94, and the Xxxxx
Family Dynasty Trust U/A/D 12/31/91 (collectively, the "Xxxxx Shareholders").
RECITALS:
WHEREAS, on March 21, 1995 the shareholders of the Company entered
into a Stockholders Agreement; and
WHEREAS, pursuant to Article IV of the Stockholders Agreement, the
Company granted specified registration rights to MascoTech and the other
shareholders of the Company; and
WHEREAS, Section 5.3 of the Stockholders Agreement provides that the
agreement, other than Article IV, terminates upon the public offering by the
Company of equity securities; and
WHEREAS, the Company anticipates making a public offering of equity
securities, and the parties desire to enter into this Agreement to restate the
registration rights granted pursuant to Article IV of the Stockholders
Agreement, as well as to provide the same registration rights to MascoTech and
to the Xxxxx Shareholders as provided to a warrant holder of the Company once
MascoTech's or the Xxxxx Shareholders' stock holdings in the Company fall below
15% but are greater than 5%.
NOW, THEREFORE, in consideration of the mutual agreements and promises
herein contained, and other consideration, the sufficiency of which is hereby
acknowledged, the Company, MascoTech and the Xxxxx Shareholders agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. As used in this Agreement, the following terms
shall have the meanings indicated:
Common Stock: The Common Stock of the Company.
Effective Date: The date the SEC declares effective an S-1
registration statement of
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the Company registering the Common Stock of the Company.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Registrable Securities: Any of the (ii) Common Stock, or (ii) other
securities issued or issuable with respect to any Registrable
Securities by way of stock dividend or stock split or in connection
with a combination of shares, recapitalization, reclassification,
merger, consolidation or other reorganization, or otherwise. As to any
particular Registrable Securities, once issued to MascoTech or to any
of the Xxxxx Shareholders, such securities shall cease to be
Registrable Securities when (i) a registration statement with respect
to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of by
MascoTech or a Xxxxx Shareholder in accordance with such registration
statement, (ii) such securities shall have been distributed by
MascoTech or a Xxxxx Shareholder pursuant to Rule 144 under the
Securities Act, or (iii) such securities shall have ceased to be
outstanding.
SEC: The Securities and Exchange Commission or any successor agency
thereto.
Securities Act: The Securities Act of 1933, as amended.
Transfer: Any sale, assignment, gift, transfer, exchange, pledge,
devise, bequeath, or other disposition of any shares of Common Stock,
or any interest therein.
ARTICLE II
REGISTRATION RIGHTS
(FOR 15% OR MORE COMMON STOCK OWNERSHIP)
MascoTech shall have the following registration rights so long as
MascoTech owns 15% or more of the then outstanding shares of Common Stock of the
Company; the Xxxxx Shareholders shall have the following registration rights so
long as the Xxxxx Shareholders collectively own 15% or more of the then
outstanding shares of Common Stock of the Company:
2.1 REQUESTED REGISTRATION
1.1.1 REQUEST FOR REGISTRATION. In case the Company shall receive from
MascoTech or from a holder or holders of the majority of shares of Common Stock
owned by the Xxxxx Shareholders a written request that the Company effect any
registration, qualification or compliance with respect to all or a part of the
Registrable Securities, the Company will use its diligent good faith efforts to
effect, as soon as practicable, all such registrations, qualifications and
compliances (including, without limitation, the execution of an undertaking to
file post-effective amendments, appropriate qualification under the applicable
blue sky or other state securities laws and appropriate compliance with
exemptive regulations issued under the Securities Act and any other governmental
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of MascoTech's or
the Xxxxx
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Shareholders' (as the case may be) Registrable Securities as is
specified in such request; provided, that the Company shall not be
obligated to take any action to effect any such registration,
qualification or compliance pursuant to Section 2.1; (i) in any
particular jurisdiction in which the Company would be required to
register as a dealer or to cause any officer or employee of the
Company to register as a salesman in effecting such registration,
qualification or compliance, or (ii) after the Company has effected
three such registrations requested by such shareholder or group of
shareholders pursuant to this Section 2.1.1 and such registrations
have been declared or ordered effective; provided, that the
shareholder or group of shareholders in question shall have been
permitted to include and sell its Registrable Securities in at least
two of such registrations, or (iii) for any such shareholder if that
shareholder own less than 15% of the then outstanding Common Stock of
the Company.
Subject to the foregoing, the Company shall prepare and file a registration
statement under the Securities Act covering the Registrable Securities so
requested to be registered as soon as practicable and within 90 days after such
request is received.
Notwithstanding the foregoing, the Company shall not be obligated to effect a
registration, qualification or compliance under this Section 2.1.1 during any
period (i) during which the Company is in the process of negotiating or
preparing, and ending on a date 180 days following the effective date of, a
registration statement pertaining to an underwritten public offering of
securities for the account of the Company, provided that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective, and provided further that if the requesting
shareholder or shareholders have attempted to sell Registrable Securities in
such registration and because of marketing factors have been limited by the
underwriters to an amount less than 75% of the shares of Registrable Securities
it or they desired to sell, then the ending date of the period shall be reduced
to 90 days, (ii) during which the Company is in possession of material
information concerning it or its business and affairs and which it is not
otherwise required by law to disclose publicly, the public disclosure of which
would have a material adverse effect on the Company, or (iii) during which the
Company is engaged in any material acquisition or disposition transaction which
would be significantly disrupted by such registration, qualification and/or
compliance.
2.1.2 UNDERWRITING. MascoTech or the Xxxxx Shareholders, as the case may be,
shall include in its or their request made pursuant to Section 2.1.1 the name of
the managing underwriter or underwriters, if any, that MascoTech or the Xxxxx
Shareholders, as the case may be, would propose to employ in connection with the
public offering proposed to be made pursuant to the registration requested;
provided, that, if the Company reasonably objects to any managing underwriter or
underwriters proposed by MascoTech or the Xxxxx Shareholders, as the case may
be, MascoTech or the Xxxxx Shareholders, as the case may be, shall propose
another managing underwriter or underwriters. If the sale proposed by MascoTech
or the Xxxxx Shareholders, as the case may be, is to be effected pursuant to an
underwritten public offering, the right of MascoTech or the Xxxxx Shareholders,
as the case may be, to registration pursuant to Section 2.1 shall be conditioned
upon MascoTech's or the Xxxxx Shareholders', as the case may be,
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participation in such underwriting and the inclusion of MascoTech's or the Xxxxx
Shareholders', as the case may be, Registrable Securities in the underwriting to
the extent requested as otherwise provided herein. The Company shall enter into
an underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting in the manner set forth above and on such
customary terms of such underwriter as the Company and MascoTech or the Xxxxx
Shareholders, as the case may be, shall agree. In order to facilitate the
process of registering and selling such securities, the terms thereof are set
forth in this Article II. Notwithstanding any other provisions of Section 2.1,
if the managing underwriter advises MascoTech or the Xxxxx Shareholders, as the
case may be, in writing that marketing factors require a limitation of the
number of shares to be underwritten, then the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
limited as advised by the managing underwriter and no Registrable Securities
excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in such registration. If MascoTech or the Xxxxx
Shareholders, as the case may be, disapprove of the terms of the underwriting,
it or they may elect to withdraw therefrom by written notice to the Company and
the managing underwriter. The Registrable Securities so withdrawn shall also be
withdrawn from registration.
2.2 COMPANY REGISTRATION
2.2.1 RIGHT TO INCLUSION. If at any time or from time to time, the Company
shall determine to register any of its equity securities in an underwritten
offering, either for its own account or the account of any shareholder, other
than (a) a registration relating solely to employee benefit plans, (b) a
registered offering primarily to employees of the Company and its subsidiaries,
(c) a registration relating solely to a transaction described in Rule 145 under
the Securities Act, (d) a transaction relating solely to an exchange pursuant to
Section 3(a)(9) under the Securities Act, (e) a transaction relating solely to
an acquisition of assets or property for securities, or (f) a registration on
any form which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of
Registrable Securities by MascoTech or the Xxxxx Shareholders of Registrable
Securities, then the Company will:
(i) promptly give to MascoTech and to the Xxxxx Shareholders written
notice thereof; and
(ii) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting
involved therein, all (or such portion thereof as the Company and
the managing underwriter of the registered offering shall, in
their discretion, determine) of the Registrable Securities
specified in any written request by MascoTech or the Xxxxx
Shareholders received by the Company within 30 days after such
written notice is given on such of the customary terms of such
inclusion as the Company and MascoTech or the Xxxxx Shareholders,
as the case may be, shall agree.
2.2.2 UNDERWRITING, The rights of MascoTech and of the Xxxxx Shareholders to
registration pursuant to section 2.2 shall be conditioned upon MascoTech's or
the Xxxxx Shareholders', as the case may be, participation in the underwriting
and the inclusion of such of MascoTech's or the Xxxxx Shareholders', as the case
may be, Registrable Securities in the underwriting on such
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customary terms of the underwriter as the Company and MascoTech or the Xxxxx
Shareholders, as the case may be, shall agree. In order to facilitate the
process of registering and selling equity shares of the Company the terms
thereof are set forth in this Article II., MascoTech and the Xxxxx Shareholders,
as the case may be, shall enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by the
Company.
Notwithstanding any other provisions of Section 2.2, if the managing underwriter
determines that marketing factors require a limitation of the number of shares
to be underwritten, the underwriter and the Company may limit or exclude
entirely the Registrable Securities to be included in any registration and
underwriting. In such event, the Company shall so advise MascoTech and the Xxxxx
Shareholders.
No Registrable Securities excluded from the underwriting by reason of the
managing underwriter's marketing limitation shall be included in such
registration. If MascoTech or the Xxxxx Shareholders disapprove of the terms of
the underwriting, it or they may elect to withdraw therefrom by written notice
to the Company and the managing underwriter. The Registrable Securities so
withdrawn shall also be withdrawn from registration.
2.3 EXPENSE OF REGISTRATION. All expenses incurred in connection with any
registration, qualification or compliance pursuant to Article II, including
without limitation, all Securities and Exchange Commission, National Association
of Securities Dealers, Inc. and state registration, filing and qualification
fees, printing expenses, escrow fees, fees and disbursements of counsel for the
Company and fees and expenses of accountants incidental to or required by such
registration, shall be borne by the Company; provided, however, that:
(a) The Company shall not be required to pay for expenses of any
registration proceeding begun pursuant to Section 2.1, the
request for which has been subsequently withdrawn by MascoTech or
the Xxxxx Shareholders, as the case may be, and in such case,
such expenses shall be borne by MascoTech or the Xxxxx
Shareholders, as the case may be; and
(b) The Company shall not be required to pay stock transfer taxes,
underwriters' fees, discounts or commissions relating to
Registrable Securities sold, or the fees and disbursements of
counsel for MascoTech or the Xxxxx Shareholders.
2.4 REGISTRATION PROCEDURES. In the case of such registration,
qualification or compliance effected by the Company pursuant to Article II, the
Company will keep MascoTech and the Xxxxx Shareholders 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:
(a) keep such registration, qualification or compliance pursuant to
Sections 4.1 or 4.2 effective for a period of 90 days or until
MascoTech and the Xxxxx Shareholders have completed the
distribution described in the registration statement relating
thereto, whichever occurs first; and
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(b) furnish such number of prospectuses and other documents incident
thereto as MascoTech or the Xxxxx Shareholders from time to time
may reasonably request.
2.5 RELATED REGISTRATION MATTERS. The Company shall enter into an
underwriting agreement in connection with any registration subject to the
provisions of Section 2.1 and 2.2 hereof, which agreement shall contain such
terms, provisions and agreements as are customary and appropriate for such
registration. In connection with the registration, to the extent not provided in
the underwriting agreement related to such registration, the Company also shall:
(a) engage a bank or other company to act as transfer agent and
registrar for the Common Stock;
(b) cause customary opinions of counsel, comfort letters of
accountants and other appropriate documents to be delivered by
representatives of the Company; and
(c) as soon as practicable after the effective date of the
registration statement, and, in any event, within 16 months
thereafter, make generally available to its security holders
(within the meaning of Rule 158 under the Securities Act) an
earnings statement (which need not be audited) complying with
Section 11 (a) of the Securities Act and covering a period of at
least 12 consecutive months beginning after the effective date of
the registration statement.
2.6 INDEMNIFICATION AND CONTRIBUTION. In connection with any registration
of Registrable Securities pursuant to Article II the Company and MascoTech or
the Xxxxx Shareholders, as the case may be (and the underwriters, if any), will
enter into an agreement (which shall be the underwriting agreement in the case
of an underwritten offering) containing mutual indemnification and contribution
rights and procedures in form and substance (i) satisfactory to the Company and
to MascoTech and/or the Xxxxx Shareholders and (ii) customary for underwritten
secondary public securities offerings; provided, however, that the liability of
each seller of Registrable Securities pursuant to such indemnification and
contribution provisions shall be limited to the net proceeds (after all expenses
are paid by such seller) from the disposition of the Registrable Securities
disposed of by such seller pursuant to such registration.
2.7 INFORMATION BY SHAREHOLDERS. MascoTech and/or the Xxxxx Shareholders
shall furnish to the Company such information regarding it and the distribution
proposed by it as the Company may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
Article II.
2.8 SALES WITHOUT REGISTRATION. If at the time of any Transfer of any
Common Stock, such Common Stock shall not be registered under the Securities
Act, the Company may require, as a condition of allowing such Transfer, that
MascoTech, the Xxxxx Shareholders or the transferee furnish to the Company (a)
such information as is necessary in order to establish that such Transfer may be
made without registration under the Securities Act, and (b) (if the Transfer is
not made in compliance with Rule 144 thereunder) at the expense of the
transferee, an opinion
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satisfactory in form and substance to the Company to the effect that such
Transfer may be made without registration under the Securities Act; provided,
that nothing contained in this Section 2.8 shall relieve the Company from
complying with any request for registration, qualification or compliance made
pursuant to the other provisions of Article II.
2.9 RULE 144 REPORTING. With a view to making available to MascoTech and
the Xxxxx Shareholders 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 to:
(a) SEC REPORTS. File with the SEC in a timely manner all reports and
other documents thereafter required of the Company if the Company becomes
subject to the reporting requirements of Section 13 or 15 (d) of the Exchange
Act; and
(b) OTHER INFORMATION. Furnish to MascoTech and to any Xxxxx
Shareholder forthwith upon its request (i) a written statement by the Company as
to the Company's compliance with the public information requirements of Rule 144
under the Securities Act (at any time following 90 days after the Company
becomes subject to the reporting requirements of Xxxxxxx 00 xx 00 (x) xx xxx
Xxxxxxxx Xxx), (xx) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents as may be reasonably
requested in availing MascoTech or the Xxxxx Shareholder of any rule or
regulation of the SEC permitting the sale of any such securities without
registration.
2.10 TRANSFER OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities granted by the Company under Section 2.1 and the
right to participate in Company registrations under Section 2.2 may be assigned
by MascoTech or the Xxxxx Shareholders, as the case may be, to a transferee or
assignee of all (but not less than all) of MascoTech's or such Xxxxx
Shareholders' Registrable Securities, unless such transferee or assignee
acquires such Registrable Securities through a transaction, or chain of
transactions involving a public offering or a sale effected pursuant to Rule 144
under the Securities Act; provided that the Company is given written notice by
the transferor at the time of or within 10 days after said Transfer, setting
forth the name and address of said transferee or assignee and identifying the
Registrable Securities with respect to which such registration rights are being
assigned.
ARTICLE III
REGISTRATION RIGHTS
(FOR 5% TO 15% COMMON STOCK OWNERSHIP)
For the time period when MascoTech owns at least 5% but less than 15%
of the then outstanding shares of Common Stock of the Company, MascoTech shall
have the registration rights specified on Exhibit A attached hereto and
incorporated herein by this reference, except that the word "MascoTech" shall be
deemed inserted in place of the word "Holder" throughout
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Exhibit A. For the time period when the Xxxxx Shareholders collectively own at
least 5% but less than 15% of the then outstanding shares of Common Stock of the
Company, the Xxxxx Shareholders shall have the registration rights specified on
Exhibit A attached hereto and incorporated herein by this reference, except that
the phrase "the Xxxxx Shareholders" shall be deemed inserted in place of the
word "Holder" throughout Exhibit A.
ARTICLE IV
MISCELLANEOUS
4.1 EFFECTIVENESS OF AGREEMENT. This Agreement shall become effective on
the Effective Date. In the event the Effective Date does not occur by December
31, 2000, this Agreement shall automatically become null and void.
4.2 REMEDIES. Each party hereto acknowledges that a remedy at law for any
breach or attempted breach of this Agreement will be inadequate, agrees that
each party hereto shall be entitled to specific performance and injunctive and
other equitable relief in case of any such breach or attempted breach, and
further agrees to waive any requirement for the securing or posting of any bond
in connection with the obtaining of any such injunctive or any other equitable
relief.
4.3 TERMINATION. This Agreement shall terminate on the first to occur of
(A) March 20, 2010, or (B) for (i) MascoTech, the date MascoTech no longer owns
at least 5% of the then outstanding Common Stock of the Company, and (ii) the
Xxxxx Shareholders, the date the Xxxxx Shareholders no longer own at least 5% of
the then outstanding Common Stock of the Company.
4.4 AMENDMENT. This Agreement may be amended from time to time by an
instrument in writing signed by all of those who are parties to this Agreement.
4.5 NOTICES. Any notice, request, reply instruction or other communication
(herein severally and collectively called "Notice") in this Agreement provided
or permitted to be given to the Company or to any shareholder must be given in
writing and may be given or served by depositing the same in the United States
mail, in certified or registered form, postage fully prepaid, addressed to the
party or parties to be notified, with return receipt requested, or by delivering
the same in person to such party or parties. Notice deposited in the United
States mail, mailed in the manner hereinabove described, shall be effective upon
deposit. Notice given in any other manner shall be effective only if and when
received by the party to be notified. Notices shall be addressed as follows (or
to such other address as may be designated by notice given pursuant hereto):
(a) If to the
Company to: Saturn Electronics & Engineering, Inc.
000 Xxx Xxxxxxxxx
Xxxxxx Xxxxx, XX 00000
Attention: President
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(b) If to MascoTech to: MascoTech, Inc.
00000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: President
(c) If to the Xxxxx
Shareholders to: c/o Xx. Xxxxxxx X. Xxxxx, Xx.
Saturn Electronics & Engineering, Inc.
000 Xxx Xxxxxxxxx
Xxxxxx Xxxxx, XX 00000
4.6 GOVERNING LAW. This Agreement shall be subject to and governed by the
laws of the State of Michigan.
4.7 CONSENT TO JURISDICTION. MascoTech and the Xxxxx Shareholders
irrevocably submit to the jurisdiction of any federal or Michigan court sitting
in the vicinity of Detroit, Michigan over any suit, action or proceeding arising
out of or relating to this Agreement. MascoTech and the Xxxxx Shareholders each
irrevocably waive, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding brought in such court and any claim that any suit, action or
proceeding brought in such a court has been brought in an inconvenient forum.
MascoTech and the Xxxxx Shareholders agree that a final judgment in any such
suit, action or proceeding brought in such a court shall be conclusive and
binding upon it and may be enforced in the courts of the State of Michigan and
the United States of America (or any other courts to the jurisdiction of which
it is or may be subject) by a suit upon such judgment, provided that lawful
service of process is effected upon it at the address for which notices are to
be given or served to it pursuant to Section 3.4 of this Agreement. Nothing in
this Section 3.6 shall affect the right of the Company to serve process in any
manner permitted by law or limit the right of the Company to bring proceedings
against any shareholder in the courts of any jurisdiction or jurisdictions.
4.8 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the inure
to the parties to this Agreement and their respective heirs, executors,
successors and permitted assigns.
4.9 INVALID PROVISIONS. Should any portion of this Agreement be adjudged
or held to be invalid, unenforceable or void, such holding shall not have the
effect of invalidating or voiding the remainder of this Agreement and the
parties hereby agree that the portion so held invalid, unenforceable or void
shall, if possible, be deemed amended or reduced in scope, or to otherwise be
stricken from this Agreement to the extent required for the purposes of validity
and enforcement thereof.
4.10 SECTION HEADINGS. The section and paragraph headings contained herein
are for reference purposes only and shall not in any way effect the meaning and
interpretation of this Agreement.
4.11 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of
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counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute only one instrument.
4.12 ADJUSTMENTS. In the event the Company shall declare a stock split,
stock dividend or other distribution of capital stock in respect of, or issue
capital stock in replacement of or exchange for, shares of Common Stock (a) such
shares shall be subject to this Agreement and the provisions of this Agreement
providing for calculations based on the number of shares of Common Stock shall
include the shares issued in respect of the Common Stock, and (b) the numbers
for shares shall be equitably adjusted as appropriate to give effect to such
event.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by themselves or by their respective representatives thereunto duly authorized
as of the date first above set forth.
SATURN ELECTRONICS & ENGINEERING, INC.
By: /s/ X. Xxxxx
------------------------------------------------
Title: President
---------------------------------------------
MASCOTECH, INC.
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------------------
Title: Vice President-Controller
---------------------------------------------
/s/ X. Xxxxx
---------------------------------------------------
Xxxxxxx X. Xxxxx, Xx., individually and as
Trustee of the Xxxxxxx X. Xxxxx Grantor
Retained Annuity Trust U/A/D 5/18/98 and
the Xxxxxxx X. Xxxxx Trust dated 10/14/91
/s/ Xxxxxxxx Xxxxxxx
---------------------------------------------------
Xxxxxxxx Xxxxx Pelling, as trustee of the
Xxxxxxx X. Xxxxx Grantor Retained Annuity
Trust U/A/D 9/23/93, the Xxxxxxx X. Xxxxx
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Grantor Retained Annuity Trust U/A/D 11/7/94
/s/ Xxxxxxx Xxxx
----------------------------------------------------
Xxxxxxx X. Xxxx, as trustee of the Xxxxx
Family Dynasty Trust U/A/D 12/31/91
/s/ Xxx X. Xxxxxxx
-----------------------------------------------------
Bank One Trust N.A., as trustee of the Xxxxx
Family Dynasty Trust U/A/D 12/31/91
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EXHIBIT A
REGISTRATION RIGHTS
1. Definitions. For purposes of this Exhibit A, the following terms shall
have the following meanings:
"Common Stock" means the Company's common stock, no par value per share.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
"Holder" means collectively, the Holder of the Warrant as set forth in the
Warrant Certificate(s) and any transferee of the Warrant (or any part thereof)
permitted pursuant to the terms of the Warrant.
"Person" means an individual, partnership, corporation, limited liability
company, trust or other entity, or a government or agency or political
subdivision thereof.
"Prospectus" means the prospectus included in any Registration Statement at the
time the same becomes effective, as amended or supplemented by any prospectus
supplement, including post-effective amendments and all material incorporated by
reference in the prospectus.
"Registrable Securities" means the Shares; provided, however, that a Share shall
be a Registrable Security only for so long as the Share continues to be a
Restricted Security. For purposes of this Exhibit A, each Share shall be a
Restricted Security at the date of this Exhibit A. A Share shall cease to be a
Restricted Security on the earliest of the following dates: (i) the date the
Company has effectively registered the Share under the Securities Act and the
Holder has disposed of the Share in accordance with the Registration Statement
covering the Share, or (ii) the date the Holder shall be eligible to sell (in
one transaction) all of the Registrable Securities held by the Holder to the
public pursuant to Rule 144 (or any similar provisions then in force) under the
Securities Act, or (iii) the date the Holder has otherwise transferred the
Share.
"Registration Statement" means any registration statement of the Company which
covers any of the Registrable Securities pursuant to the provisions of this
Exhibit A, including all pre-effective amendments and post-effective amendments
thereto, the Prospectus and supplements thereto, all exhibits and all material
incorporated by reference in the registration statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
2A. Shelf Registration. Within 60 days after the Holder requests the Company to
file a Registration Statement with respect to the Registrable Securities
(provided that the Holder shall
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not be entitled to make such a request prior to the date the Company becomes
eligible to file a Registration Statement (with respect to the sale of the
Shares by the Holder) on Form S-3 under the Securities Act), the Company shall
prepare and file a Registration Statement providing for the sale of the
Registrable Securities by the Holder pursuant to Rule 415 of the Securities Act
and/or any similar rule that may be adopted by the SEC; provided, however, that
the Holder shall not sell, transfer, pledge or otherwise dispose of any
Registrable Securities while such Registration Statement remains effective,
except during the ten (10) business days immediately following the second
business day following the release by the Company to the public of quarterly or
annual earnings. Notwithstanding the foregoing, if the Company shall furnish to
the Holder a certificate signed by the President of the Company stating that, in
the good faith judgment of the President of the Company, the Company is in
receipt of material, undisclosed information, the disclosure of which would be
detrimental to the Company, then the Holder shall not sell, transfer, pledge or
otherwise dispose of any Registrable Securities for the period or periods
specified in such certificate; provided, however, that the Holder shall not be
so restricted with respect to such sales, transfers, pledges or other
dispositions pursuant to this sentence or the next succeeding sentence for more
than an aggregate of ninety (90) days in any fiscal year of the Company. If at
any time after the Company files a Registration Statement hereunder the Company
decides to make a public offering of securities through one or more
underwriters, and an underwriter selected by the Company to manage such proposed
underwriting advises the Company that it believes that such underwritten
offering could be adversely affected by the concurrent registered offering of
Registrable Securities pursuant hereto, then the Holder shall not sell,
transfer, pledge or otherwise dispose of any Registrable Securities at the
request of the Company during such public offering of securities; provided
further, that the aggregate period of any such restriction, when taken together
with the restriction imposed by the Company pursuant to a certificate signed by
the President of the Company pursuant to the previous sentence, shall not exceed
ninety (90) days in any fiscal year of the Company.
2B. Incidental Registration. If the Company at any time (other than pursuant to
Section 2A hereof) proposes to register its Capital Stock under the Securities
Act for sale to the public, whether for its own account or for the account of
other security holders or both (except with respect to registration statements
on Forms S-4 or S-8 or another form not available for registering Common Stock
for sale to the public) each such time it will give at least 20 days' prior
written notice to the Holder of its intention to do so ("Notice of Incidental
Registration"). If at the time of such notice there does not exist an effective
registration statement pursuant to Section 2A with respect to Registrable
Securities held by Holder (or if pursuant to Section 2A the Company is not
permitted to sell its Registrable Securities for any reason pursuant to the
Shelf Registration), upon the written request of the Holder given within 10 days
after receipt of any Notice of Incidental Registration (which request shall
state the intended method of disposition thereof), the Company will use its best
efforts to cause the Registrable Securities as to which registration shall have
been so requested to be included in the securities to be covered by the
registration statement proposed to be filed by the Company, all to the extent
requisite to permit the sale or other disposition by the Holder (in accordance
with its written request) of such Registrable Securities so registered. The
amount of Registrable Securities to be included in such an underwriting may be
reduced if and only to the extent that the managing underwriter shall be of the
opinion that such inclusion would adversely affect the price of the Registrable
Securities to be
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sold therein; provided, further, however, that, in an initial public offering,
the Company shall have the first priority to sell shares of Common Stock in such
offering and the number of shares requested to be included in such public
offering by the Holder shall be reduced pro rata based on the number of shares
owned by the Holder on the date notice is given by the Company pursuant to this
Section 2B.
3. Registration Procedures. In connection with the Company's registration
obligations pursuant to Sections 2A and 2B of this Exhibit A, the Company shall
use its best efforts to effect the registration of the Registrable Securities in
accordance with the method of distribution described on the attached Schedule 1
and, pursuant thereto, the Company shall as reasonably expeditiously as
possible:
(a) prepare and file with the SEC a Registration Statement within 60 days after
the initial request from the Holder to register such Registrable Securities and
use its best efforts to cause such Registration Statement to become effective
within 90 days after the initial request from the Holder to register such
Registrable Securities;
(b) prepare and file with the SEC such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith as may be
necessary to keep such Registration Statement continuously effective for a
period expiring on the earlier of (i) the date on which all of the Registrable
Securities covered by the Registration Statement have been sold pursuant thereto
or (ii) the date on which all Registrable Securities are eligible for sale
pursuant to Rule 144 under the Securities Act;
(c) furnish to the Holder, without charge, at least one signed copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated by reference
therein and all exhibits (including those incorporated by reference);
(d) deliver to the Holder, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as it may reasonably request, but only while the Company is required to cause
the Registration Statement to remain effective;
(e) use its best efforts to register or qualify such Registrable Securities for
offer and sale under the securities or blue sky laws of such U. S. States or
possessions as the Holder may reasonably request (the "Blue Sky Laws") and do
any and all other acts or things necessary or advisable to enable the Holder to
consummate the disposition in such jurisdictions of Registrable Securities owned
by the Holder; provided, however, that in no event shall the Company be
obligated to qualify generally to do business in any jurisdiction where it is
not now qualified or to take any action which would subject it to the service of
process in suits other than those arising out of the offer or sale of the
securities covered by such Registration Statement in any jurisdictions where it
is not now so subject or subject itself to taxation in any jurisdiction where it
would not otherwise be subject;
(f) cooperate with the Holder to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold, free of any and
all restrictive legends, which
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certificates shall be in such denominations and registered in such names as
the Holder may request;
(g) use its best efforts to cause all Registrable Securities covered by the
Registration Statement to be listed on the Nasdaq Stock Market ("Nasdaq") (or
any other market on which the Common Stock is then listed);
(h) promptly notify the Holder 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 contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and, at the request of
the Holder, except as provided in Section 2(a), the Company shall prepare a
supplement or amendment to such Prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such Prospectus shall not contain
any untrue statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading.
(i) advise the Holder, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the SEC suspending the
effectiveness of such Registration Statement or the initiation of any proceeding
for such purpose and promptly use all reasonable efforts to prevent the issuance
of any stop order or to obtain its withdrawal if such stop order should be
issued;
(j) furnish to the Holder at the time of the disposition of such Registrable
Securities by the Holder a signed copy of an opinion of counsel for the Company
as to such matters as such Holder may reasonably request and substantially to
the effect that, a registration statement covering such Registrable Securities
has been filed with the Commission under the Securities Act and has been made
effective by order of the Commission; said registration statement and the
prospectus contained therein comply as to form in all material respects with the
requirements of the Securities Act and, based upon such investigation and
inquiry as said counsel deems necessary or appropriate, nothing has come to said
counsel's attention that would cause it to believe that either said registration
statement or said prospectus contains 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 (in the case of said prospectus, in the light of the
circumstances under which they were made) not misleading; said counsel knows of
no legal or governmental proceedings required to be described in said prospectus
that are not described as required, or of any contract or documents of a
character required to be described in said registration statement or said
prospectus or to be filed as an exhibit to said registration statement or to be
incorporated by reference therein that is not described and filed as required;
no stop order has been issued by the Commission suspending the effectiveness of
such registration statement and that, to the best of such counsel's knowledge,
no proceedings for the issuance of such a stop order are threatened or
contemplated; and the applicable provisions of the securities or blue sky laws
of each state in which the Company shall be required, pursuant to clause (e) of
this Section 3, to register or qualify such Registrable Securities, have been
complied with, assuming the accuracy and completeness of the information
furnished to such counsel with respect to each filing relating to such laws; it
being understood that said counsel may rely, as to all factual matters and
financial data treated therein, on certificates of
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the Company (copies of which shall be delivered to such Holders), and as to
all questions of the laws of each state in which the Company shall be so
required to register or qualify such Registrable Securities, on the opinion
of counsel from such state reasonably acceptable to such Holder, copies of
which shall be delivered to such Holder; and
(k) upon reasonable notice to and consultation with the Company, make available
for inspection by the Holder and any attorney or accountant retained by the
Holder all financial and other records, pertinent corporate documents and
properties of the Company reasonably necessary in order for the Holder to sell
its Shares pursuant to the Registration Statement; provided that such Persons
shall agree in a writing satisfactory in form and substance to the Company to
keep confidential any records, information or documents of the Company unless a
court or administrative agency requires the disclosure of the records,
information or documents or such records, information or documents (A) become
generally available to the public other than as result of a disclosure by any
such Persons, (B) were available to such Persons on a non-confidential basis
prior to the disclosure of such records, information or documents pursuant to
this Exhibit C, or (C) become available to such Persons on a non-confidential
basis from a source other than the Company or its agents, advisors or
representatives.
The Company may require the Holder to furnish to the Company information
regarding the Holder and the distribution of the Registrable Securities as the
Company may from time to time reasonably request in writing and as necessary for
the registration of the Shares.
Upon receipt of any notice from the Company of the happening of any of the
following: (i) the SEC's issuance of any stop order denying or suspending the
effectiveness of the Registration Statement or the initiation of any proceeding
for that purpose, (ii) the Company's receipt of any stop order denying
registration or suspending the qualification of the Registrable Securities for
sale or the initiation of any proceeding for such purpose, (iii) the happening
of any event which makes any statement made in the Registration Statement, the
Prospectus or any document incorporated by reference therein untrue or which
requires any change in the Registration Statement, the Prospectus or any
document incorporated by reference therein to make the statements not include an
untrue statement of material fact or not omit any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, the Holder shall discontinue the
disposition of Registrable Securities until the Holder receives a supplemented
or amended Prospectus from the Company or until the Company advises the Holder
in writing that the Holder may resume the use of the Prospectus, and have
received copies of any additional or supplemental filings which are incorporated
by reference in the Prospectus. If the Company so directs, the Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in the Holder's possession, of the Prospectus
covering the Registrable Securities at the time the Holder received the notice.
4. Registration Expenses. Regardless of when the Registration Statement
becomes effective, the Company shall bear all costs and expenses incident to the
Company's performance of, or compliance with, this Exhibit C, including without
limitation all registration and filing fees, fees and expenses of compliance
with the Blue Sky Laws, printing expenses, messenger, telephone and
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delivery expenses, Nasdaq qualification and listing fees, and fees and
disbursements of counsel for the Company, all independent certified public
accountants of the Company and fees and expenses of other Persons retained
by the Company relating to the distribution of the Registrable Securities
(all such expenses being herein called "Registration Expenses"). The Holder
shall pay all discounts and commissions attributable to the Registrable
Securities, all transfer taxes relating to the sale or disposition of the
Registrable Securities and any fees of any attorney or accountant retained
by the Holder.
5. Disclosure. With a view to making available registration on Form S-3 and
the benefits of Rule 144 under the Securities Act, the Company agrees, for a
period two years following the earlier of (x) five (5) years after the date of
this Exhibit A and (y) the date upon which the Holder has purchased from the
Company all of the Shares available under the Warrant, to:
(a) make and keep current public information available within the meaning of
Rule 144(c) of the Securities Act;
(b) file with the SEC in a timely manner all reports and other documents and
information required of the Company under the Exchange Act, and take such
other actions as may be necessary to assure the availability of Form S-3
for use in connection with the registration rights provided in this Exhibit
A; and
(c) furnish to the Holder forthwith upon request a written statement as to the
Company's compliance with the reporting requirements of Rule 144 and the
Exchange Act, a copy of the Company's most recent annual and quarterly
reports, and such other reports, documents and other information in the
possession of or reasonably obtainable by the Company as the Holder may
reasonably request in availing itself of Rule 144.
6. Indemnification.
(a) Indemnification by the Company. The Company agrees to indemnify and hold
harmless, to the full extent permitted by law, the Holder against all losses,
claims, damages, liabilities and expenses (including, without limitation,
reasonable attorneys' fees and expenses) to which the Holder may become subject
under federal or state securities laws or otherwise which arise out of, or are
caused by, the Company's violation of any federal or state securities laws,
including, but not limited to, any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, Prospectus or preliminary
prospectus or in any application or other request that the Company files in
connection with the registration contemplated by such Registration Statement,
including any application or request filed under the Blue Sky Laws 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 written information
furnished to the Company by the Holder expressly for use therein; provided,
however, the Company will not be liable in any such case to the extent that any
such loss, claim, damage, liability or expense results from the fact that the
Holder sold Registrable Securities to a Person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a copy of the final
prospectus or of the final prospectus as then amended or supplemented, whichever
is most recent, if the Company had previously made available to the Holder a
sufficient number of copies thereof and such final prospectus, as then amended
or
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supplemented, corrected such misstatement or omission.
(b) Indemnification by the Holder. In connection with any Registration
Statement in which the Holder's Registrable Securities are registered and sold,
the Holder shall furnish to the Company such information and affidavits as the
Company reasonably requests for use in connection with any Registration
Statement or Prospectus and agrees to indemnify and hold harmless, to the full
extent permitted by law, the Company, its officers, directors and each Person
who controls the Company (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expenses (including, without
limitation, reasonable attorneys' fees and expenses) resulting from any untrue
or alleged untrue statement of a material fact or any omission or alleged
omission of a material fact required to be stated in the Registration Statement,
Prospectus, preliminary Prospectus or any application filed under the Blue Sky
Laws or necessary to make the statements therein not misleading, but only to the
extent that the untrue statement or omission is contained in any written
information or affidavit so furnished by the Holder to the Company expressly for
inclusion in the Registration Statement, Prospectus or application filed under
the Blue Sky Laws or results from the fact that the Holder sold Registrable
Securities to a Person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the final prospectus or of the
final prospectus as then amended or supplemented, whichever is most recent, if
the Company had previously made available a sufficient number of copies thereof
to the Holder and such final prospectus, as then amended or supplemented,
corrected such misstatements or omission.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder shall (i) promptly notify the indemnifying party of
any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. Any Person entitled to indemnification
hereunder shall have the right to employ separate counsel and to participate in
the defense of the claim, but the fees and expenses of the counsel shall be at
the expense of the Person unless (A) the indemnifying party has agreed to pay
the fees or expenses, (B) the indemnifying party shall have failed to assume the
defense of the claim and employ counsel reasonably satisfactory to the Person,
or (C) in the reasonable judgment of the Person, based upon advice of its
counsel, a conflict of interest may exist between the Person and the
indemnifying party with respect to the claims (in which case, if the Person
notifies the indemnifying party in writing that the Person elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of the claim on behalf of
the Person), and in no event (except as set forth in the last sentence of this
Section 6(c)), shall the Holder have the right to employ more than one separate
counsel at the Company's expense for all of them for any matter. If the
indemnifying party assumes the defense, the indemnifying party will not be
subject to any liability for any settlement made without its consent. The
indemnifying party, however, may not unreasonably withhold its consent. No
indemnifying party will be required to consent to the entry of any judgment or
to enter into any settlement which does not include as an unconditional term the
claimant's or plaintiff's release of the indemnified party from all liability in
respect to the claim or litigation. An indemnifying party who is not entitled
to, or elects not to, assume the defense of a claim shall not be obligated to
pay the fees and expenses of more than one counsel in any jurisdiction for all
parties indemnified by the indemnifying party with
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respect to the claim, unless in the reasonable judgment of any indemnified party
a conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to the claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels.
(d) Survival. The indemnities provided in this Section 6 shall survive the
Holder's transfer of any Registrable Securities.
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Schedule 1 to
Exhibit A: Registration Rights
The shares offered hereby may be sold from time to time by the Selling
Shareholder, or by pledgees, donees, transferees or other successors in interest
of the Selling Shareholder. Such sales may be made on the Nasdaq Stock Market,
or otherwise, at prices and on terms then prevailing or at prices related to the
then-current market prices, or in negotiated transactions at negotiated prices.
The shares may be sold by one or in a combination of the following: (a) a block
trade in which the broker or dealer so engaged will attempt to sell the shares
as agent, but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal and
resale by such broker or dealer for its account pursuant to this Prospectus; and
(c) ordinary brokerage transaction and transactions in which the broker solicits
purchasers. In effecting sales, brokers or dealers engaged by the Selling
Shareholder may arrange for other brokers or dealers to participate.
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