REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is dated as of February 5, 1996 by and
among RCM Technologies, Inc., a Nevada corporation (the "Company") and Limeport
Investments, L.L.C., a Delaware limited liability company (the "Holder").
W I T N E S S E T H:
WHEREAS, the Company and Holder are parties to a Subscription Agreement
dated January 12, 1996 (the "Subscription Agreement") pursuant to which Holder
acquired 1,383,125 shares of the Company's Common Stock (the "Subscription
Shares");
WHEREAS, the parties hereto desire to set forth their agreement concerning
the registration of the Company's common stock under the Securities Act of 1933,
as amended.
NOW, THEREFORE, the parties hereto agree as follows:
AGREEMENT
1. Definitions.
(a) "Closing" shall mean that date upon which a closing of the Subscription
Agreement occurs.
(b) "Registration Statement" shall mean a registration statement for
secondary sales of the Restricted Stock on Form S-3 or other comparable form.
(c) "Restricted Stock" shall mean the Subscription Shares and all
additional shares of Common Stock of the Company issued to Holder by virtue of
its ownership of the Subscription Shares (by stock dividend, stock split or
similar transaction).
(d) "Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar or successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at any relevant time.
(e) "SEC" shall mean the United States Securities and Exchange Commission.
(f) "Trading Day" shall mean any day on which the New York Stock Exchange
is open for trading.
2. Shelf Registration.
(a) The Company shall prepare and file, not later than February 15, 1997, a
Registration Statement with the SEC under and in compliance with the Securities
Act covering all the Restricted Stock and use its best efforts to promptly have
such Registration Statement declared effective for the purpose of facilitating
the public resale of the Restricted Stock.
(b) The Company's obligation in Subparagraph 2(a) above extends only to the
use of the Company's best efforts to register such Restricted Stock pursuant to
a Registration Statement. The Company shall indemnify and hold harmless the
Holder, its members, its managers, and any underwriter or managing underwriter,
if any, designated by the Holder in accordance with Paragraph 7 hereof. The
Company shall cooperate with such underwriter, if any, pursuant to an
underwriting agreement containing usual and customary terms, but shall not be
obligated to obtain a commitment from an underwriter relative to the sale of
such Restricted Stock, whether in a public offering or private placement
transaction.
(c) The Company shall notify Holder that the SEC has declared the
Registration Statement effective, and the Restricted Stock subject thereto
effectively registered and eligible for public sale, as soon as practicable, but
in any event no later than two (2) days after receipt of confirmation thereof
from the SEC.
3. Registration Procedures. The Company will use its best efforts to:
(a) prepare and file with the SEC a Registration Statement with respect to
all the Restricted Stock and use its best efforts to cause such Registration
Statement to become and remain effective for the period of the distribution
contemplated thereby or as required under the Securities Act;
(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 effective for the period specified
in Subparagraph 3(a) above and as comply with the provisions of the Securities
Act with respect to the disposition of all Restricted Stock covered by such
Registration Statement in accordance with the sellers' intended method of
disposition set forth in such Registration Statement for such period;
(c) furnish to each seller and to each underwriter such number of copies of
the Registration Statement and the prospectus included therein (including each
preliminary prospectus), as such persons may reasonably request in order to
facilitate the public sale or other disposition of the Restricted Stock covered
by such Registration Statement;
(d) use its best efforts to register or qualify the Restricted Stock
covered by such Registration Statement under the securities or blue sky laws of
such jurisdictions as the sellers, or, in the case of an underwritten public
offering, the managing underwriter shall reasonably request; provided, however,
that the Company shall not for any such purpose be required to qualify generally
to transact business as a foreign corporation in any jurisdiction where it is
not so qualified or to consent to general service of process in any such
jurisdiction;
(e) immediately notify each seller under such Registration Statement and
each underwriter, 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 contained in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required or necessary to be stated therein in order to make the
statements contained there in not misleading in light of the circumstances then
existing;
(f) make available for inspection by each seller, any underwriter
participating in any disposition pursuant to such Registration Statement, and
any attorney, accountant or other agent retained by any such seller or
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such Registration
Statement;
(g) For purposes of Subparagraphs 3(a) and 3(b) above, the period of
distribution of Restricted Stock shall be deemed to extend until (A) in an
underwritten public offering, each underwriter has completed the distribution of
all securities purchased by it; and (B) in any other registration, all shares of
Restricted Stock covered thereby shall have been sold; and
(h) if the Common Stock of the Company is listed on any securities exchange
or automated quotation system, the Company shall use its best efforts to list
(with the listing application being made at the time of the filing of such
Registration Statement or as soon thereafter as is reasonably practicable) the
Restricted Stock covered by such Registration Statement on such exchange or
automated quotation system.
4. Expenses.
(a) For the purposes of this Paragraph (4), the term "Registration
Expenses" shall mean: all expenses incurred by the Company in complying with
paragraph (2) of this Agreement, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company (other than the expenses of any
special audit as described below), fees of the National Association of
Securities Dealers, Inc. ("NASD"), fees and expenses of listing shares of
Restricted Stock on any securities exchange or automated quotation system on
which the Company's shares are listed and fees of transfer agents and
registrars. The term "Selling Expenses" shall mean: all underwriting discounts
and selling commissions applicable to the sale of Restricted Stock, and all
accountable or non- accountable expenses paid to any underwriter in respect of
the sale of Restricted Stock.
(b) The Company will pay all Registration Expenses in connection with the
Registration Statement filed pursuant to paragraph (2) of this Agreement. All
Selling Expenses in connection with any Registration Statement filed pursuant to
paragraph (2) of this Agreement shall be borne by the participating sellers in
such Registration Statement in proportion to the number of shares sold by each,
or by such persons other than the Company (except to the extent the Company
shall be a seller) as they may agree.
5. Obligations of Holder.
(a) Holders shall notify the Company in writing at least three (3) Trading
Days prior to the resale of shares of Restricted Stock during the first thirty
(30) days following the date of the prospectus pursuant to which such resales
are to be effectuated and at least five (5) trading days prior to the resale of
shares of Restricted Stock when such resales occur more than thirty (30) Trading
Days after the date of the prospectus pursuant to which such resales are to be
effectuated.
(b) In connection with each registration hereunder, the Holder will furnish
to the Company in writing such information with respect to the Holder and the
securities held by the Holder, and the proposed distribution by it as shall be
reasonably requested by the Company in order to assure compliance with federal
and applicable state securities laws, as a condition precedent to including the
Holder's Restricted Stock in the Registration Statement. The Holder also shall
agree to promptly notify the Company of any changes in such information included
in the Registration Statement or prospectus as a result of which there is an
untrue statement of material fact or an omission to state any material fact
required or necessary to be stated therein in order to make the statements
contained there in not misleading in light of the circumstances then existing.
(c) In connection with each registration pursuant to paragraph (2) of this
Agreement, the Holder will not effect sales thereof until notified by the
Company of the effectiveness of the Registration Statement, and thereafter will
suspend such sales after receipt of telegraphic or written notice from the
Company to suspend sales to permit the Company to correct or update a
Registration Statement or prospectus. At the end of any period during which the
Company is obligated to keep a Registration Statement current, the Holder shall
discontinue sales of shares pursuant to such Registration Statement upon receipt
of notice from the Company of its intention to remove from registration the
shares covered by such Registration Statement which remain unsold, and the
Holder shall notify the Company of the number of shares registered which remain
unsold immediately upon receipt of such notice from the Company.
6. Sales Blackout Period.
(a) At any time when a Registration Statement effected pursuant to
Paragraph 2 relating to Restricted Stock is effective, upon written notice from
the Company to the Holder that the Company has determined in good faith that
sale of Restricted Stock pursuant to the registration statement would require
disclosure of non-public material information not otherwise required to be
disclosed under applicable law having material adverse effect on the Company (an
"Information Blackout"), the Holder shall suspend sales of Restricted Stock
pursuant to such Registration Statement until the earlier of:
(i) thirty (30) days after the Company notifies Holder of such good faith
determination, and
(ii) such time as the Company notifies the Holder that such material
information has been disclosed to the public or has ceased to be material or
that sales pursuant to such Registration Statement may otherwise be resumed (the
number of days from such suspension of sales by the Holders until the day when
such sale may be resumed hereunder is hereinafter called a "Sales Blackout
Period").
(b) Notwithstanding anything to the contrary contained herein, (i) the
Company shall not initiate two (2) consecutive Sales Blackout Periods based upon
substantially the same set of facts and circumstances, and (ii) the total number
of days in multiple Sales Blackout Periods shall not exceed sixty (60) days in
any twelve-month period.
7. Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless Holder, its members, managers and agents, and any broker-dealer or
underwriter selling Restricted Stock pursuant to any Registration Statement from
and against any and all losses, claims, damages, liabilities and expenses
(including reasonable attorneys' fees and reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement or prospectus or related
document, registration, notification or filing relating to the Restricted Stock
or in any amendment or supplement thereto or in any preliminary prospectus, or
arising out of or 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, except insofar as such losses, claims, damages,
liabilities or expenses arise out of, or are based upon, any such untrue
statement or omission (or allegation with respect thereto) based upon
information furnished to the Company by Holder or on Holder's behalf expressly
for use therein.
(b) Conduct of Indemnification Proceedings. If any action or proceeding
(including any governmental investigation) shall be brought or asserted against
Holder which is indemnified pursuant to subparagraph 7(a), the Company (with
counsel reasonably acceptable to Holder) shall assume the defense thereof, and
shall assume the payment of all expenses. Holder shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of Holder
unless the Company has agreed to pay such fees and expenses. Except as expressly
provided above, in the event that the Company shall not assume the defense of
any such action or proceeding within a reasonable period of time, Holder may
take such action in connection therewith as it deems necessary or desirable,
including retention of counsel, and the Company shall thereafter be liable to
Holder pursuant to this Agreement for any legal or other expenses subsequently
incurred by it in investigating, preparing for or defending against such action
or proceeding. The Company shall not be liable for any settlement of any such
action or proceeding effected without the Company's written consent (which
consent shall not be unreasonably withheld), but, if settled with its written
consent or if there be a final judgment for the plaintiff in any such action or
proceeding, the Company agrees to indemnify and hold harmless Holder from and
against any loss or liability (to the extent stated above) by reason of such
settlement or judgment. The Company will not consent to any settlement, or the
entry of judgment pursuant thereto, (i) which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to Holder of
a written release from all liability in respect of such claim or litigation in
form reasonably satisfactory to Holder, and (ii) which has not been consented to
in writing by Holder, which consent shall not be unreasonably withheld.
(c) Indemnification by Holder. Holder agrees to indemnify and hold harmless
the Company, its directors and officers and each person, if any, who controls
the Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to the same extent as the foregoing indemnity from the Company to Holder,
but only with respect to (i) information furnished by Holder or on Holder's
behalf expressly for use in any Registration Statement or prospectus relating to
the Restricted Stock, or any amendment or supplement thereto, or any preliminary
prospectus, and (ii) the actions or omissions of its broker- dealer(s). In case
any action or proceeding shall be brought against the Company or its directors
or officers, or any such controlling person, in respect to which indemnity may
be sought against Holder, Holder shall have the rights and duties given to the
Company, and the Company or its directors or officers, or such controlling
person, shall have the rights and duties given to Holder, by the preceding
subparagraph 7(b).
(d) Contribution. If the indemnification provided for in subparagraph 7(a)
is unavailable to the Company or Holder in respect of any losses, claims,
damages, liabilities or judgments referred to herein, then each such
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments as between the
Company, on the one hand, and Holder, on the other, in such proportion as is
appropriate to reflect the relative fault of the Company, on the one hand, and
Holder, on the other, in connection with the statements, actions or omissions
which resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative fault of the
Company, on the one hand, and Holder, on the other, shall be determined by
reference to among other things, (i) whether the untrue or alleged untrue
statement of a material fact relates to information supplied by the Company or
by Holder, or (ii) whether 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 was the responsibility of the Company or Holder, and
(iii) the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and Holder agree that it would not be just and equitable if
contribution pursuant to this subparagraph 7(d) were determined by any method of
allocation which does not take into account the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or judgments referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other fees
or expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action, suit, 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.
8. Miscellaneous Provisions.
(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.
(b) Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
(c) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
without the written consent of the Company and the Holder.
(d) Notices. All communications under this Agreement shall be sufficiently
given if delivered by hand or by overnight courier, sent by electronic facsimile
transmission with a copy by first class mail or mailed by registered or
certified mail, postage prepaid, addressed,
(i) if to the Company, to:
Xx. Xxxx Xxxxx
Chief Executive Officer
RCM Technologies, Inc.
0000 XxXxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Fax No.: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxx, Esquire
Clark, Ladner, Xxxxxxxxxxx & Young
One Commerce Square
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
(ii) if to Holder, to:
Limeport Investments, L.L.C.
c/o Xx. Xxxxx X. Xxxxxxxx
Acquest International, L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxx, Esquire
Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
or at such other address as any of the parties shall have furnished in writing
to the other parties hereto.
(e) Successors and Assigns; Holders as Beneficiaries. This Agreement shall
inure to the benefit of and be binding upon the parties and their respective
successors and assigns, and the agreements of the Company herein shall inure to
the benefit of all Holders and their respective successors and assigns.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Entire Agreement; Survival; Termination. This Agreement is intended by
the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
(h) SEC Filings. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder in a timely manner. Upon the
request of Holder, the Company will deliver to Holder a written statement as to
whether it has complied with such informational requirements.
(i) The Company's and Holder's Authority. The Company and Holder have full
right and authority to enter into and to make the agreements made by them
herein, and this Agreement has been duly authorized and delivered by the Company
and Holder and is enforceable against the Company and Holder in accordance with
its terms.
RCM TECHNOLOGIES, INC.
By:_/s/ Xxxx Xxxxx
Name:Xxxx Xxxxx
Title:
LIMEPORT INVESTMENTS, L.L.C.
By:/s/Xxxxx Xxxxxxxx
Xxxxx X. Xxxxxxxx, Manager
