Exhibit 4.3
REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT, dated as of July 13, 1999 (this
"AGREEMENT") among Pacific Circuits, Inc. (the "COMPANY") and certain purchasers
of Company Common Stock listed on Schedule I attached hereto (each a "HOLDER"
and collectively the "HOLDERS").
WHEREAS, pursuant to that certain Subscription Agreement (the
"SUBSCRIPTION AGREEMENT"), of even date herewith, the Company has agreed to sell
and the Holders have agreed to purchase certain Company Common Stock for the
consideration and on terms and conditions more particularly set forth therein;
and
WHEREAS, it is a condition to the consummation of the transactions
set forth in the Subscription Agreement that the parties hereto enter into this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. As used in this Agreement, the following terms
shall have the following respective meanings:
"ADDITIONAL HOLDER" shall mean any Company shareholder
(other than the Holders) or any transferee or assignee thereof to whom
the Company has contractually granted incidental registration rights.
"BUSINESS DAY" means any day that is not a Saturday, a
Sunday or other day on which banks are required or authorized by law to
be closed in Seattle, Washington or the District of Columbia.
"COMMISSION" shall mean the United States Securities and
Exchange Commission, or any other United States federal agency at the
time administering the Securities Act or the Exchange Act, as applicable,
whichever is the relevant statute.
"COMPANY COMMON STOCK" shall mean the common stock, no par
value per share, of the Company.
"EXCHANGE ACT" shall mean the United States Securities
Exchange Act of 1934, or any similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be
amended from time to time.
"PERSON" shall mean an individual, corporation,
association, partnership, limited liability company, trust, organization,
group (as such term is used in Rule 13d-5
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under the Exchange Act), business, government or political subdivision
thereof, governmental agency or other entity.
"PROSPECTUS" shall mean the prospectus included in any
Registration Statement, as amended or supplemented by any prospectus
supplement with respect of the terms of the offering of any security of
the Company covered by such Registration Statement and all other
amendments or supplements to the prospectus, including post-effective
amendments, and all material incorporated, or deemed to be incorporated,
by reference in such prospectus.
"PUBLIC OFFERING" shall mean a sale pursuant to a
Registration Statement filed pursuant to the Securities Act where the
issuance of stock pursuant to such sale has a market value of at least
$20 million and a capitalization on a fully diluted basis of at least $75
million (based on the per share price of shares sold in such offering).
"REGISTRABLE SECURITIES" shall mean any Company Common
Stock issued or retained pursuant to the Subscription Agreement or
securities which may be issued or distributed in respect thereof by way
of stock dividend or stock split or other distribution, exchange,
recapitalization, or reclassification. For purposes of this Agreement,
any Registrable 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 in accordance with such Registration
Statement, (ii) such Registrable Securities are sold by a person in a
transaction in which the rights under the provisions of this Agreement
are not assigned, or (iii) such Registrable Securities shall have ceased
to be outstanding.
"REGISTRATION STATEMENT" shall mean any registration
statement under the Securities Act filed by the Company, including the
Prospectus contained therein, any amendments and supplements to such
registration statement, including post-effective amendments, and all
exhibits and all material incorporated, or deemed to be incorporated, by
reference in such registration statement.
"SECURITIES ACT" shall mean the United States Securities
Act of 1933, or any similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be
amended from time to time.
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ARTICLE II
AGREEMENTS IN RESPECT OF THE REGISTRABLE SECURITIES
SECTION 2.01. DEMAND REGISTRATIONS. (a) Subject to the
limitations set forth below, Xxxxx Xxxxxxxxx ("XXXXXXXXX") and Xxxx Xxxxxxxx
("XXXXXXXX") shall each have the right (a "SHORT FORM DEMAND RIGHT") to require
the Company to file a Registration Statement under the Securities Act in respect
of Registrable Securities held by him so long as the Company is eligible to use
Form S-3. Subject to the limitations set forth below, Xxxxxxxxx and Xxxxxxxx
shall each have one Short Form Demand Right. (For purposes of this Section
2.01, the party exercising a Short Form Demand Right is, where applicable,
referred to as the "SELLING SHAREHOLDER").
(b) Each Short-Form Demand Right must be exercised in respect
of at least 2,000 Registrable Securities (subject to equitable adjustment in
the event of stock splits, stock dividends and similar events). No Short Form
Demand Right may be exercised within 6 months after the date of effectiveness of
a Company registration statement pursuant to which Xxxxxxxxx or Xxxxxxxx were
provided the opportunity to register Registrable Securities.
(c) As promptly as practicable, but in no event later than 45
days after the Company receives a written request from a Selling Shareholder
demanding that the Company so register the number of Registrable Securities
specified in such request, the Company shall file with the Commission and
thereafter use its reasonable best efforts to cause to be declared effective
promptly a Registration Statement (a "DEMAND REGISTRATION") providing for the
registration of all Registrable Securities as the Selling Shareholder shall have
demanded be registered.
(d) Anything in this Agreement to the contrary notwithstanding,
the Company shall be entitled to postpone and delay, for a reasonable period of
time (the "Blackout Period"), not to exceed 60 days after the exercise of a
Demand Right in the case of subsections (i) and (iii) below, the filing of any
Demand Registration if:
(i) the Company will be filing, within 30 days after the
exercise of a Demand Right, a Registration Statement pertaining to a
public offering of Company Common Stock in which the Holders are entitled
to join pursuant to Section 2.02 hereof;
(ii) the Company is subject to an existing contractual
obligation to its underwriters not to engage in a public offering;
(iii) the Company shall determine that any such filing or
the offering of any Registrable Securities would
(A) in the good faith judgment of the Board of
Directors of the Company, impede, delay or otherwise interfere
with any pending or contemplated financing, acquisition, corporate
reorganization or other similar transaction involving the Company
or its wholly owned subsidiaries;
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(B) based upon advice from the Company's
investment banker or financial advisor, adversely affect any
pending or contemplated offering or sale of any class of
securities by the Company; or
(C) in the good faith judgment of the Board of
Directors of the Company, require disclosure of material nonpublic
information which, if disclosed at such time, would be materially
harmful to the interests of the Company and its shareholders;
PROVIDED, HOWEVER, that the Blackout Period shall terminate upon the completion
or abandonment of the relevant securities offering or sale, the termination or
expiration of the existing contractual obligation not to engage in a public
offering, the completion or abandonment of the relevant financing, acquisition,
corporate reorganization or other similar transaction, such time as such Demand
Registration shall no longer affect the relevant pending or contemplated
offering or sale of securities by the Company, the public disclosure by the
Company or public admission by the Company of such material nonpublic
information or such time as such material nonpublic information shall be
publicly disclosed not in breach of confidentiality obligations, as the case may
be. After the expiration of any Blackout Period and without any further request
from the Selling Shareholder the Company shall effect the filing of the relevant
Demand Registration and shall use its reasonable best efforts to cause any such
Demand Registration to be declared effective as promptly as practicable unless
the Selling Shareholder shall have, prior to the effective date of such Demand
Registration, withdrawn in writing the initial request, in which case such
withdrawn request shall not constitute a Demand Registration for purposes of
determining the number of Demand Registrations to which the Selling Shareholder
is entitled hereunder. The Company may not exercise its right to postpone or
delay the filing of any Demand Registration pursuant to this subsection (c) more
than twice during any 12 month period.
(e) Any request by a Selling Shareholder for a Demand
Registration which is subsequently withdrawn prior to such Demand Registration
becoming effective shall not constitute a Demand Registration for purposes of
determining the number of Demand Registrations to which the Selling Shareholder
is entitled if such withdrawal (i) is due to a material adverse change affecting
the Company, (ii) is due to a notification by the Company of an intention to
file a Registration Statement with respect to Company Common Stock or (iii) is
made in accordance with the penultimate sentence of Section 2.01(c).
(f) The Company shall be entitled to include authorized but
unissued shares of Company Common Stock in any Demand Registration, subject to
Section 2.02. Notwithstanding anything contained herein, if the lead
underwriter of an offering involving a Demand Registration delivers a written
opinion to the Selling Shareholder (a copy of which shall be provided to the
Company) that the number of shares of Company Common Stock included in such
Demand Registration would (i) materially and adversely affect the price of the
Company Common Stock to be offered or (ii) result in a greater amount of Company
Common Stock being offered than the market could reasonably absorb, then the
number of Registrable Securities to be registered by the Company and the number
of shares of Company Common Stock to be included in such Demand Registration by
other holders of shares of Company Common Stock pursuant to contractual
incidental registration rights, shall be reduced in proportion to the number of
securities originally requested to be registered by each of them to the extent
that, in the lead underwriter's opinion,
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neither of the effects in the foregoing clauses (i) and (ii) would result
from the number of shares of Company Common Stock included in such Demand
Registration.
SECTION 2.02. INCIDENTAL REGISTRATION. (a) If the Company
proposes to file a Registration Statement under the Securities Act with
respect to a Public Offering or, after a Public Offering with respect to any
offering of Company Common Stock (i) for its own account or (ii) for the
account of any Holder or each Additional Holder of Company Common Stock, the
Company shall give written notice of such proposed filing to each Holder and
any Additional Holder as soon as practicable (but in any event not less than
30 days before the anticipated filing date), and such notice shall offer each
Holder and each Additional Holder the opportunity to register such number of
Registrable Securities as each Holder or Additional Holder shall request.
Upon the written direction of a Holder or an Additional Holder, given within
20 days following the receipt by the Holder or Additional Holder of any such
written notice (which direction shall specify the number of Registrable
Securities intended to be disposed of by the Holder or Additional Holder), the
Company shall include in such Registration Statement (an "INCIDENTAL
REGISTRATION") such number of Registrable Securities as shall be set forth in
such written direction. Notwithstanding anything contained herein, if the
lead underwriter of an offering involving an Incidental Registration delivers
a written opinion to the Company (a copy of which shall be provided to each
Holder and each Additional Holder requesting Incidental Registration rights
hereunder) that the number of shares of Company Common Stock included in such
Incidental Registration would (i) materially and adversely affect the price
of the Company Common Stock to be offered or (ii) result in a greater amount
of Company Common Stock being offered than the market could reasonably
absorb, then the number of Registrable Securities to be registered by any
Holder or Additional Holder requesting Incidental Registration rights
hereunder, shall be reduced in proportion to such Holder's respective pro
rata ownership interest in the Company at the time immediately preceding such
request for Incidental Registration to the extent that, in the lead
underwriter's opinion, neither of the effects in the foregoing clauses (i)
and (ii) would result from the number of shares of Company Common Stock
included in such Incidental Registration.
SECTION 2.03. REGISTRATION PROCEDURES. (a) In connection with
each Registration, and in accordance with the intended method or methods of
distribution of the Company Common Stock as described in such Registration, the
Company shall, as soon as reasonably practicable (and, in any event, subject to
the terms of this Agreement, at or before the time required by applicable laws
and regulations):
(i) prepare and file with the Commission a Registration
Statement with respect to such Registrable Securities, which, if the
method of distribution is by means of an underwriting, shall be in form
and substance reasonably acceptable to the underwriters for such
underwriting, and use its reasonable best efforts to cause such
Registration Statement to become and remain effective for the period of
the distribution contemplated thereby; PROVIDED, HOWEVER, that the
Company shall use its reasonable best efforts to cause a Registration
Statement on Form S-3 to remain effective until the earlier of (i) the
disposition of all the Registrable Securities registered thereunder, and
(ii) the expiration of the 90-day period commencing on the first day of
the effectiveness of such Registration;
(ii) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in
connection therewith as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all Registrable
Securities covered by such Registration Statement;
(iii) furnish to each Holder and Additional Holder such numbers
of copies of the Registration Statement and the Prospectus included
therein (including each preliminary prospectus and any amendments or
supplements thereto), in conformity with the requirements of the
Securities Act and such other documents and information as it may
reasonably request;
(iv) (A) make available for inspection by each Holder or
Additional Holder and its counsel and financial advisors such financial
and other information as shall be reasonably requested by them, and
provide such Holder or Additional Holder and its counsel and financial
advisors the opportunity to discuss the business affairs of the Company
with its principal executives and accountants, for the purposes of
enabling each
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Holder or Additional Holder to exercise its due diligence
responsibilities under the Securities Act and (B) before the Registration
Statement (and any amendments or supplements thereto) is filed, provide
copies thereof to each Holder and Additional Holder and its counsel and
provide them with adequate time to review and comment thereon;
(v) use its reasonable best efforts to register or qualify the
Registrable Securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdiction within the United States and
Puerto Rico as shall be reasonably appropriate for the distribution of the
Registrable Securities covered by the Registration Statement; PROVIDED, HOWEVER,
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business in or to file a general consent to service of
process in any jurisdiction wherein it would not but for the requirements of
this paragraph (v) be obligated to do so; and PROVIDED, FURTHER, that the
Company shall not be required to qualify such Registrable Securities in any
jurisdiction in which the securities regulatory authority requires that a Holder
or Additional Holder submit any of its Registrable Securities to the terms,
provisions and restrictions of any escrow, lockup or similar agreement(s) for
consent to sell Registrable Securities in such jurisdiction unless such Holder
or Additional Holder agrees to do so;
(vi) promptly notify each Holder and Additional Holder, at any
time when a Prospectus relating to the Registrable Securities is required
to be delivered under the Securities Act, of the happening of any event
as a result of which the Prospectus included in such Registration
Statement, as then in effect, includes an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, and at the request of a Holder
or Additional Holder, promptly prepare and furnish to such Holder or
Additional Holder a reasonable number of copies of a supplement to or an
amendment of such Prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such Prospectus shall not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under
which they were made;
(vii) enter into customary agreements (including if the method of
distribution is by means of an underwriting, an underwriting agreement in
customary form) and take such other actions as are reasonably required in
order to expedite or facilitate the disposition of the Registrable
Securities to be so included in the Registration Statement;
(viii) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable, but
not later than 18 months after the effective date of the Registration
Statement, an earnings statement covering the period of at least 12
months beginning with the first full month after the effective date of
such Registration Statement, which earnings statements shall satisfy the
provisions of Section 11(a) of the Securities Act;
(ix) file with any securities exchange where the Registrable
Securities are to be listed, the required number of Prospectuses pursuant
to the rules and regulations of such exchange as are from time to time in
effect, and
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(x) use its reasonable best efforts to list the Company Common
Stock covered by such Registration Statement with any securities exchange
or recognized trading market on which the Company Common Stock are then
listed.
(b) Each Holder or Additional Holder requesting Incidental
Registration and each Selling Shareholder requesting Demand Registration
shall furnish to the Company in writing such information regarding such
Holder, Additional Holder or Selling Shareholder and its intended method of
distribution of the Registrable Securities as the Company may from time to
time reasonably request in writing, but only to the extent that such
information is required in order for the Company to comply with its
obligations under all applicable securities and other laws and to ensure that
the Prospectus relating to such Registrable Securities conforms to the
applicable requirements of the Securities Act and the rules and regulations
thereunder. Each Holder, Additional Holder or Selling Shareholder shall
notify the Company as promptly as practicable of any inaccuracy or change in
information previously furnished by such Holder, Additional Holder or Selling
Shareholder to the Company or of the occurrence of any event, in either case
as a result of which any Prospectus relating to the Registrable Securities
contains or would contain an untrue statement of a material fact regarding
such Holder or its intended method of distribution of such Registrable
Securities or omits to state any material fact regarding such Holder,
Additional Holder or Selling Shareholder or its intended method of
distribution of such Registrable Securities required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and promptly furnish to the
Company any additional information required to correct and update any
previously furnished information, or required so that such prospectus shall
not contain, with respect to such Holder, Additional Holder or Selling
Shareholder or the intended method of distribution of the Registrable
Securities, an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
SECTION 2.04. REGISTRATION EXPENSES. All expenses incurred in
connection with (i) each Registration pursuant to Section 2.01 of this
Agreement, excluding underwriters' discounts and commissions and any stamp or
transfer tax or duty and (ii) each Registration pursuant to Section 2.02 of this
Agreement, excluding any stamp or transfer tax or duty, but including in both
cases all registration, filing and qualification fees, printers' and accounting
fees, reasonable fees and disbursements of one counsel for the Selling
Shareholder, or in the case of an Incidental Registration, one counsel for all
Holders (selected by the Holders) and fees and disbursements of counsel for the
Company incurred in connection with each registration shall be paid by the
Company. Each Holder or Additional Holder requesting Incidental Registration
shall bear and pay its pro-rata share of the underwriting commissions and
discounts and any stamp or transfer tax or duty and the fees and disbursements
of counsel for such parties other than the one counsel referred to above
incurred in connection with each Registration applicable to securities offered
for its account in connection with any Registrations, filings and qualifications
made pursuant to this Agreement.
SECTION 2.05. UNDERWRITING REQUIREMENTS. In connection with
any underwritten offering, the Company shall not be required under either
Section 2.01 or Section 2.02 of this Agreement to include shares of
Registrable Securities in such underwritten offering unless the
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Selling Shareholder, or in the case of an Incidental Registration under
Section 2.02, a Holder or Additional Holder, accepts the terms of the
underwriting of such offering that have been reasonably agreed upon between
the Company and the underwriters selected by the Company.
SECTION 2.06. Indemnification; Contribution.
(a) INDEMNIFICATION BY THE COMPANY. The Company shall, and it
hereby agrees to, indemnify and hold harmless each Holder or Additional Holder
and each Person who participates as a placement or sales agent or as an
underwriter (within the meaning of the Securities Act) in any offering or sale
of the Registered Securities, against any losses, claims, damages or liabilities
("LOSSES") to which such Holder or Additional Holder or their respective agents
or underwriters, may become subject, insofar as such Losses (or actions,
proceedings or investigations in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement or Prospectus contained therein or arise out of or
are based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and the Company shall, and it hereby agrees to, reimburse each
Holder or Additional Holder or their respective agents or underwriters for any
legal or other out-of-pocket expenses reasonably incurred by them (but not in
excess of expenses incurred in respect of one counsel for all of them unless
there is an actual conflict of interest between any indemnified parties, which
indemnified parties may be represented by separate counsel) in connection with
investigating or defending any such action, proceeding or investigation;
PROVIDED, HOWEVER, that the indemnity agreement contained in this Section
2.06(a) shall not apply to amounts paid in settlement of any such Loss, action,
proceeding or investigation if such settlement is effected without the consent
of the Company which consent shall not be unreasonably withheld; PROVIDED,
FURTHER, that the Company shall not be liable to any such Person in any such
case to the extent that any such Loss or expense arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement or Prospectus contained therein, in reliance
upon and in conformity with written information furnished to the Company by such
Holder or Additional Holder or any agent, underwriter or representative of such
Holder or Additional Holder expressly for use therein, or by the failure of such
Holder or Additional Holder to furnish the Company, upon request, with the
information required by Section 2.03(b) hereof with respect to such Holder or
Additional Holder (or agent, underwriter or representative of such Holder or
Additional Holder) or the intended method of distribution by such Holder or
Additional Holder, that is the subject of the untrue statement or omission or,
in the case of such agent or underwriter, if the Company shall sustain the
burden of proving that such agent or underwriter sold securities to the person
alleging such Loss without sending or giving, at or prior to the written
confirmation of such sale, a copy of the applicable Prospectus (excluding any
documents incorporated by reference therein) or of the applicable Prospectus, as
then amended or supplemented (excluding any documents incorporated by reference
therein) if the Company had previously furnished copies thereof to such agent or
underwriter, and such Prospectus corrected such untrue statement or alleged
untrue statement or omission or alleged omission made in such Registration.
(b) INDEMNIFICATION BY THE HOLDERS AND ANY AGENT OR
UNDERWRITERS. Each Holder or Additional Holder requesting or joining in a
Registration shall severally and not jointly indemnify and hold harmless the
Company, each of its directors and officers, each Person, if any, who controls
the Company within the meaning of the Securities Act, and each agent and any
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underwriter for the Company (within the meaning of the Securities Act) against
any Losses, joint or several, to which the Company or any such director,
officer, controlling Person, agent or underwriter may become subject, under the
Securities Act or otherwise, and shall reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, agent or underwriter (but not in excess of expenses incurred in respect
of one counsel for all of them unless there is an actual conflict of interest
between any indemnified parties, which indemnified parties may be represented by
separate counsel) in connection with investigating or defending any such Loss or
action, proceeding or investigation insofar as such Losses (or actions,
proceedings or investigations in respect thereof) or expenses arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in such Registration Statement on the effective date thereof
(including any Prospectus filed under Rule 424 under the Securities Act or any
amendments or supplements thereto) or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission (i) was made in such
Registration Statement or Prospectus, or amendments or supplements thereto, in
reliance upon and in conformity with written information furnished by or on
behalf of such Holder or additional Holder expressly for use in connection with
such Registration Statement or Prospectus, or (ii) resulted from the failure of
such Holder or Additional Holders to furnish the Company, upon request, with the
information required by Section 2.03(b) hereof, with respect to such Holder or
Additional Holder or agent, underwriter or representative of such Holder or
Additional Holder, or the intended method of distribution by such Holder or
Additional Holder, that is the subject of the untrue statement or omission;
PROVIDED, HOWEVER, that the indemnity agreement contained in this
Section 2.06(b) shall not apply to amounts paid in settlement of any such Loss,
action, proceeding or investigation if such settlement is effected without the
consent of such Holder or Additional Holder which consent shall not be
unreasonably withheld and in no event shall any Holder or Additional Holder be
liable under this Section 2.05(b) for an amount in excess of the gross proceeds
received by such Holder or Additional Holder from the sale of securities
pursuant to such Registration.
(c) NOTICE OF CLAIMS, ETC. Promptly after receipt by an
indemnified party under subsection (a) or (b) above of written notice of the
commencement of any action or proceeding for which indemnification under
subsection (a) or (b) may be requested, such indemnified party shall, without
regard to whether a claim in respect thereof is to be made against an
indemnifying party pursuant to the indemnification provisions of, or as
contemplated by, this Section 2.06, notify such indemnifying party in writing
of the commencement of such action or proceeding; but the omission so to
notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party in respect of such action or proceeding
on account of the indemnification provisions of or contemplated by Section
2.06(a) or 2.06(b) hereof, except to the extent the indemnifying party was
prejudiced by such failure of the indemnified party to give such notice, and
in no event shall such omission relieve the indemnifying party from any other
liability it may have to such indemnified party. In case any such action or
proceeding shall be brought against any indemnified party and it shall notify
an indemnifying party of the commencement thereof, such indemnifying party
shall be entitled to participate therein and, to the extent that it shall
determine, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying
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party shall not be liable to such indemnified party for any legal or any
other expenses subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation (unless
such indemnified party reasonably objects to such assumption on the grounds
that there are likely defenses available to it which are different from and
potentially inconsistent with the defenses available to such indemnifying
party, in which event the indemnified party shall have the right to control
its defense and shall be reimbursed by the indemnifying party for the
expenses incurred in connection with retaining separate counsel). If the
indemnifying party is not entitled to, or elects not to, assume the defense
of a claim, it will not be obligated to pay the fees and expenses of more
than one counsel (in addition to local counsel) for all indemnified parties
with respect to such claim, unless counsel retained by the indemnified party
reasonably concludes that it is not able to represent any other indemnified
party as a result of an actual or likely potential conflict of interest, in
which event each such indemnified party shall have the right to retain
separate counsel. The indemnifying party will not be subject to any
liability for any settlement made without its consent, which consent shall
not be unreasonably withheld or delayed. No indemnifying party will consent
to entry of any judgment or enter into any settlement agreement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in
respect of such claim or litigation.
(d) CONTRIBUTION. Each Holder and Additional Holder and the
Company agrees that if, for any reason, the indemnification provisions
contemplated by Section 2.06(a) or Section 2.06(b) hereof are unavailable to or
are insufficient to hold harmless an indemnified party in respect of any Losses
(or actions or proceedings in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses (or actions or proceedings in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of, and benefits derived by, the indemnifying party and the indemnified
party, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
relates to information supplied by such indemnifying party or by such
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 2.06(d) were determined (i) by pro rata allocation
(even if the Holders or any agents for, or underwriters of, the Registrable
Securities, or all of them, were treated as one entity for such purpose); or
(ii) by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 2.06(d). The amount paid
or payable by an indemnified party as a result of the Losses (or actions or
proceedings in respect thereof) referred to above shall be deemed to include
(subject to the limitations set forth in Section 2.06(c) hereof) any legal or
other fees or expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action, proceeding or claim.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) BENEFICIARIES OF INDEMNIFICATION. The obligations of
the Company under this Section 2.06 shall be in addition to any liability
that it may otherwise have and shall apply, upon the same terms and
conditions, to each Holder or Additional Holder and each agent and
underwriter of the Registrable Securities and each person, if any, who
controls any Holder or Additional Holder
10
or any such agent or underwriter within the meaning of the Securities Act;
and the obligations of each Holder or Additional Holder and any agents or
underwriters contemplated by this Section 2.06 shall be in addition to any
liability that each Holder or Additional Holder or its respective agent or
underwriter may otherwise have and shall apply, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his consent, is named in any Registration Statement as about to
become a director of the Company) and to each person, if any, who controls
the Company within the meaning of the Securities Act.
SECTION 2.07. TERMINATION OF REGISTRATION RIGHTS.
Notwithstanding any other provisions of this Agreement to the contrary, the
registration rights granted pursuant to this Agreement shall terminate with
respect to each Holder or Additional Holder on the earlier of: (i) the date that
all Registrable Securities held by such Holder or Additional Holder are legally
permitted to be sold within a three month period under Rule 144 under the
Securities Act (or other similar rule), regardless of whether at the time of
such sales any Holder or Additional Holder is entitled to rely upon paragraph
(k) of Rule 144, provided that each Holder or Additional Holder is then entitled
to rely on Rule 144 with respect to all such Registrable Securities; or (ii) on
the sixth anniversary of the date of this Agreement, regardless of the
tradeability of any Registrable Securities held by any Holder or Additional
Holder.
SECTION 2.08. UNDERWRITERS. If any of the Registrable Securities
are to be sold pursuant to an underwritten offering, the investment banker or
bankers and the managing underwriter or underwriters thereof shall be selected
by the Company after consultation with each Holder or Additional Holder
participating in such Registration, PROVIDED, that such managing underwriter or
underwriters must be of recognized national standing.
SECTION 2.09. LOCKUP. Each Holder or Additional Holder shall, in
connection with any Registration of the Company's securities, upon the request
of the underwriters managing any underwritten offering of the Company's
securities, agree in writing not to effect any sale, disposition or distribution
of any Registrable Securities (other than that included in the Registration or,
if the effectiveness of such Registration is after one year after the date of
this Agreement, sales in accordance with Rule 144 under the Securities Act and
within the volume limitation of Rule 144(e) under the Securities Act, regardless
of whether at the time of such sales each Holder or Additional Holder is
entitled to rely upon paragraph (k) of Rule 144) without the prior written
consent of the Company or such underwriters, as the case may be, for such period
of time not to exceed 180 days from the effective date of such Registration as
the underwriters may specify; PROVIDED, HOWEVER, that all executive officers and
directors of the Company shall also have agreed not to effect any sale,
disposition or distribution of any Registrable Securities for a like period of
time pursuant to the terms set forth in this Section 2.09.
SECTION 2.10. LEGENDS. (a) Stop transfer restrictions will be
given to the Company's transfer agent(s) with respect to the Registrable
Securities and there will be placed on the certificate or instruments
representing the Registrable Securities, and on any certificate or instrument
delivered in substitution or exchange therefor, a legend stating in substance:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO
REGISTRATION OF TRANSFER OF SUCH SECURITIES
11
WILL BE MADE ON THE BOOKS OF THE ISSUER UNLESS SUCH TRANSFER IS
MADE IN CONNECTION WITH AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF SUCH ACT OR SUCH ACT DOES NOT APPLY.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN AN AMENDED AND RESTATED
SHAREHOLDERS' AGREEMENT, DATED AS OF JULY 13, 1999, AS IT MAY BE AMENDED
FROM TIME TO TIME, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
EXECUTIVE OFFICES OF THE ISSUER. NO REGISTRATION OF TRANSFER OF
SUCH SECURITIES WILL BE MADE ON THE BOOKS OF THE ISSUER UNLESS AND
UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH."
(b) The Company hereby agrees that it will cause stop transfer
restrictions to be released with respect to any Registrable Securities that are
(i) transferred pursuant to an effective Registration Statement under the
Securities Act, (ii) transferred pursuant to Rule 144 under the Securities Act,
(iii) transferred pursuant to another exemption from the registration
requirements of the Securities Act, or (iv) freely transferable pursuant to Rule
144(k); PROVIDED, HOWEVER, that in the case of any transfer pursuant to clause
(ii) or (iii) above, the request for transfer is accompanied by a written
statement signed by each Holder or Additional Holder confirming compliance with
the requirements of the relevant exemption from registration; and PROVIDED,
FURTHER, that in the case of any transfer pursuant to clause (iii) above, the
Company shall have received a written opinion of counsel reasonably satisfactory
to the Company that such registration is not required. The Company further
agrees that it will cause the legend described in subsection (a) of this Section
2.10 to be removed in the event of any transfer as provided in clause (i) or
(ii) above.
SECTION 2.11. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to
cause the Company to register Registrable Securities pursuant to this Section 2
may be assigned by a Holder or Additional Holder to a transferee or assignee,
provided that, the Company is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the Registrable Securities with respect to which such registration
rights are being assigned; and, provided further, that such assignment shall be
effective only if immediately following such transfer the further disposition of
such Registrable Securities by the transferee or assignee is restricted under
the Securities Act.
SECTION 2.12. PUBLIC INFORMATION. The Company covenants to make
available "adequate current public information" concerning the Company within
the meaning of Rule 144(c) under the Securities Act.
ARTICLE III
MISCELLANEOUS
SECTION 3.01. EXPENSES. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
12
connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such costs and expenses.
SECTION 3.02. NOTICES. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given and made upon receipt) by
delivery in person, by courier service, by cable, by facsimile, by telegram, by
telex, or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 3.02):
(a) if to the Company:
Pacific Circuits, Inc.
c/x Xxxxxx Equity Investors III, L.P.
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
with a copy to:
Shearman & Sterling
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxx, Esq.
(b) if to a Holder, at the address set forth on the signature
page of such Holder attached hereto.
SECTION 3.03. PRESS RELEASES. No party to this Agreement
shall make, or cause to be made, any press release or public announcement in
respect of this Agreement or the transactions contemplated hereby or
otherwise communicate with any news media without the prior written consent
of the other party (except to the extent that such disclosure is required by
law or under any relevant listing agreement with a stock exchange or the
NASDAQ National Market), and, to the extent practicable, the parties shall
cooperate as to the timing and contents of any such press release or public
announcement.
SECTION 3.04. HEADINGS. The descriptive headings contained in
this Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
SECTION 3.05. SEVERABILITY. If any term or other provision of
this Agreement is invalid, illegal, or incapable of being enforced by any
rule of law or public policy, all other terms and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is
13
invalid, illegal, or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
SECTION 3.06. ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and undertakings, both written and oral,
among any of the parties hereto with respect to the subject matter hereof,
except as otherwise expressly provided herein including the Original
Registration Rights Agreement.
SECTION 3.07. NO THIRD PARTY BENEFICIARY. This Agreement shall
be binding upon and inure solely to the benefit of the parties hereto and their
respective successors and nothing herein, express or implied, is intended to or
shall confer upon any other Person (including any Additional Holder) any legal
or equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
SECTION 3.08. AMENDMENT. This Agreement may not be amended or
modified except (a) by an instrument in writing signed by, or on behalf of, the
Company and each Holder or (b) by a waiver in accordance with Section 3.09 of
this Agreement.
SECTION 3.09. WAIVER. Any party to this Agreement may (a) extend
the time for the performance of any obligations or other acts of any other party
hereto or (b) waive compliance with any agreements or conditions contained
herein. Any such extension or waiver shall be valid against the Company only if
set forth in an instrument in writing signed by the Company and shall be valid
against each Holder or Additional Holder only if set forth in an instrument in
writing signed by such Holder or Additional Holder. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or as a waiver of any other
term or condition, of this Agreement. The failure of any party to assert any of
its rights hereunder shall not constitute a waiver of any of such rights.
SECTION 3.10. GOVERNING LAW; DISPUTE RESOLUTION. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
Washington applicable to contracts executed in and to be performed entirely
within that State. All actions and proceedings arising out of or relating to
this Agreement shall be heard and determined in any state or federal court
sitting in the State of Washington.
SECTION 3.11. COUNTERPARTS. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
SECTION 3.12. SURVIVAL. The several indemnities, agreements,
representations, warranties and each other provision set forth in this
Agreement and made pursuant hereto shall remain in full force and effect
regardless of any investigation (or statement as to the results thereof) made
by or on behalf of any party, any director or officer of such party, or any
controlling person of any of the foregoing, and shall survive the transfer of
any Registrable Securities by each Holder
14
or Additional Holder, and the indemnification and contribution provisions set
forth in Section 2.06 hereof shall survive termination of this Agreement.
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized or in their individual capacities, as applicable.
PACIFIC CIRCUITS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title:
XXXXX XXXXXXXXX
/s/ Xxxxx Xxxxxxxxx
----------------------------------
Address: 0000 Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
XXXX XXXXXXXX
/s/ Xxxx Xxxxxxxx
----------------------------------
Address: 0000 Xxxxxx Xxx
Xxxxxxx Xxxxx, XX 00000
F.G. XXXXXXX XXXXXX
/s/ F.G. Xxxxxxx Xxxxxx
----------------------------------
Address: 0000 X. Xxxxxx Xxxxx Xxxxx
X. Xxxxx, XX 00000
XXXX XXXXX
/s/ Xxxx Xxxxx
----------------------------------
Address: 00000 X.X. 00xx Xxxxx
Xxxxxxx, XX 00000
16
XXXXXXX XXXXXXXXX
/s/ Xxxxxxx Xxxxxxxxx
----------------------------------
Address: 0000 Xxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
XX. XXXXXX XXXXX
/s/ Xx. Xxxxxx Xxxxx
----------------------------------
Address: 0 Xxxxxx Xxxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
TCW/CRESCENT MEZZANINE PARTNERS II, L.P.
TCW/CRESCENT MEZZANINE TRUST II
By: TCW/Crescent Mezzanine II, L.P.,
as general partner or managing owner
By: TCW/Crescent Mezzanine, L.L.C.,
as general partner
By: /s/ Xxxx-Xxxx Xxxxxx
--------------------------------------
Name: Xxxx-Xxxx Xxxxxx
Title: President
Address for Notices
x/x XXX/Xxxxxxxx Xxxxxxxxx, X.X.X.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx, 00000
Attention: Xxxxxxx X. Xxxxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Advisors (Bermuda), Limited,
as general partner
By: /s/ Xxxx-Xxxx Xxxxxx
-------------------------------
Name: Xxxx-Xxxx Xxxxxx
Title: Managing Director
17
By: TCW Investment Management Company,
as Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
Address for Notices
x/x XXX/Xxxxxxxx Xxxxxxxxx, X.X.X.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx, 00000
Attention: Xxxxxxx X. Xxxxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
TCW LEVERAGED INCOME TRUST II, L.P.
By: TCW (XXXX XX), L.P.,
as general partner
By: TCW Advisors (Bermuda), Limited,
as general partner
By: /s/ Xxxx-March Chapus
-------------------------------------
Name: Xxxx-March Chapus
Title: Managing Director
By: TCW Investment Management Company,
as Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
Address for Notices
x/x XXX/Xxxxxxxx Xxxxxxxxx, X.X.X.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx, 00000
Attention: Xxxxxxx X. Xxxxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
18
SCHEDULE I
HOLDER
------
Xxxxx Xxxxxxxxx
Xxxx Xxxxxxxx
TCW/Crescent Mezzanine Partners II, L.P.
TCW/Crescent Mezzanine Trust II
TCW Leveraged Income Trust, L.P.
TCW Leveraged Income Trust II, L.P.
F.G. Xxxxxxx Xxxxxx
Xxxx Xxxxx
Xxxxxxx Xxxxxxxxx
Xx. Xxxxxx Xxxxx
19
