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REGISTRATION RIGHTS AGREEMENT
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THIS AGREEMENT is entered into as of December 1, 1995, by and
between PCT HOLDINGS, INC., a Nevada corporation ("PCTH"), and the persons
whose names are listed on the signature page of this Agreement, both of whom
are shareholders of XXXXX INDUSTRIES, INC., a Washington corporation ("Xxxxx")
as of the date of this Agreement (the "Shareholders").
RECITALS
A. PCTH, Xxxxx Acquisition Corporation, a wholly-owned subsidiary of
PCTH ("Acquisition"), Xxxxx, and the Shareholders have entered into a
Agreement and Plan of Merger dated as of November 30, 1995 (the "Merger
Agreement"), pursuant to which Acquisition is merging with Xxxxx, with Xxxxx
to be the surviving corporation and a wholly-owned subsidiary of PCTH (the
"Merger");
B. All of the consideration for the Merger is common stock, $.001 par
value, of PCTH (the "PCTH Common Stock"); and
C. The Merger Agreement provides for the execution of a registration
rights agreement on the terms set forth herein, providing certain rights to
the Shareholders with respect to up to one-half of the shares of PCTH Common
Stock acquired by each of them as a result of the merger (the "Registrable
Shares").
AGREEMENT
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agree as
follows:
1. Notice of Registration. If, at any time within two years
after the Closing (as defined in the Merger Agreement), PCTH proposes to
register any PCTH Common Stock under the Securities Act of 1933, as amended
(the "1933 Act"), but only if other PCTH shareholders may offer to sell PCTH
Common Stock to the general public under such registration (a "Registered
Offering"), PCTH will:
(a) promptly give written notice of the proposed
Registered Offering to each of the Shareholders who, at the time such notice
is sent, holds of record any of the Registrable Shares (which notice shall
include a list of the jurisdictions in which PCTH intends to attempt to
qualify such securities under the applicable state laws regulating the offer
and sale of securities (the "State Acts")); and
(b) at the written request of any Shareholder who holds
Registrable Shares, which notice must be provided to PCTH within 15 days after
receipt of the notice referred to in Section 1(a), include in the Registered
Offering (and any related qualification under applicable State Acts) and in
any related underwriting, the Registrable Shares of any such Shareholder on
an equal basis with other shareholders of PCTH, with expenses of such
registration to be paid as provided in Section 4 below.
2. Registration. In the event that PCTH receives a timely
request for registration pursuant to Section 1(b), PCTH will use its best
efforts to include in the
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Registered Offering the portion of the Registrable Shares that any Shareholder
requests to have included therein and to file post-effective amendments, apply
for appropriate qualification under applicable State Acts and undertake
appropriate compliance with applicable regulations issued under the 1933 Act.
Notwithstanding the foregoing, PCTH shall not be obligated to effect, or to
take any action to effect, any such Registered Offering.
3. Underwriting. If the Registered Offering of which PCTH
gives notice involves an underwriting, PCTH shall so advise the Shareholders
as part of the written notice given pursuant to Section 1(a). In such event,
the Shareholders' rights to registration pursuant to Section 2 shall be
conditioned upon their participation in such underwriting. The Shareholders
and PCTH (and any other shareholders proposing to distribute their shares of
PCTH Common Stock through such underwriting) shall enter into an underwriting
agreement in customary form with the representatives of the underwriter or
underwriters selected for such underwriting by PCTH. Notwithstanding any
other provisions of this Agreement, if the representatives of the underwriter
or underwriters determine that marketing factors make it advisable to impose
a limitation on the number of shares to be underwritten, the number of shares
that may be included in the Registered Offering on behalf of the Shareholders,
or any other shareholders proposing to distribute their shares of PCTH Common
Stock through such underwriting shall be allocated in proportion, as nearly
as practicable, to the respective amounts of securities that they had
requested to be included. If any Shareholder disapproves of the terms of any
such underwriting, such Shareholder may elect to withdraw therefrom by written
notice to PCTH and the representatives of the underwriter or underwriters.
4. Expenses of Registration. PCTH shall bear all reasonable
registration expenses incurred in connection with any registration,
qualification and compliance by PCTH pursuant to Section 2. All underwriting
discounts or commissions shall be borne by the holders of the securities so
registered, pro rata on the basis of the number of their shares so registered.
5. Registration Procedures. In the case of a registration
effected by PCTH pursuant to Section 2, PCTH will keep the Shareholders
advised in writing as to the initiation of the registration and as to the
completion thereof. In connection therewith, PCTH will:
(a) to the extent allowed by the 1933 Act and the rules
and regulations of the Securities and Exchange Commission, keep such
registration effective for a period of 60 days or until the Shareholders have
completed their distribution as described in the registration statement,
whichever first occurs;
(b) furnish at its expense such number of prospectuses and
other documents incident thereto as the participating Shareholders from time
to time may reasonably request; and
(c) use its best efforts to register or qualify the
Registrable Shares under the State Acts of such jurisdictions as the
participating Shareholders may reasonably request; provided however, that PCTH
shall not be obligated to register or qualify Registrable Shares in any
jurisdiction in which PCTH would be required to execute a general consent to
service of process in order to effect such registration, qualification or
compliance, unless PCTH is already subject to service in such jurisdiction and
except as may be required by the 1933 Act or applicable rules or regulations
thereunder.
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6. Indemnification.
(a) Indemnification by PCTH. PCTH, with respect to each
registration or qualification effected pursuant to Section 2, will defend,
indemnify and hold harmless the Shareholders and each underwriter, if any, and
each party controlling any such underwriter, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or
based on (i) any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus, offering circular
or other material document incident to any such registration, qualification
or compliance, (ii) any omission (or alleged omission) of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (iii) any violation by PCTH of the 1933 Act or any State Act
or any rule or regulation thereunder applicable to PCTH and relating to an
action or inaction required of PCTH in connection with any such registration,
qualification or compliance. PCTH will reimburse the Shareholders,
underwriters or control persons for any legal and other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action; provided, however, that PCTH will not be liable
in any case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based upon information furnished to PCTH by the
Shareholders or such underwriter or control person, as the case may be.
(b) Indemnification by Shareholders. If Shares held by
a Shareholder are included in the securities as to which a registration,
qualification or compliance is being effected, such Shareholder will defend,
indemnify and hold harmless PCTH, each of PCTH's officers and directors, each
party controlling PCTH, each legal counsel and independent accountant of PCTH,
each underwriter, if any, and each party controlling any such underwriter,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on (i) any untrue statement (or alleged
untrue statement) of a material fact made by such Shareholder and contained
in any registration statement, prospectus, offering circular or other material
document incident to any such registration, qualification or compliance, (ii)
any omission (or alleged omission) of a material fact by such Shareholder
required to be stated therein or necessary to make the statements therein not
misleading, and (iii) any violation by such Shareholder of the 1933 Act or any
State Act or any rule or regulation thereunder applicable to him, her or it
and relating to an action or inaction required in connection with any such
registration, qualification or compliance. Any such Shareholder will
reimburse PCTH, such officers, directors, underwriters, control persons or
others for any legal and other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action,
in each case only to the extent that any such claim, loss, damage, liability
or expense arises out of or is based upon information furnished to PCTH or its
representatives by or on behalf of such Shareholder.
(c) Notice of Claims. Each party entitled to
indemnification under this Section 6 (the "Indemnified Party") shall give
notice to the party that allegedly is obligated hereunder to indemnify the
Indemnified Party (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claims as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom; provided, however, that counsel
for the Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefore, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such party's expense (unless the
Indemnified Party shall have been advised by counsel that actual or potential
differing
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interests or defenses exist or may exist between the Indemnifying Party
and the Indemnified Party, in which case such expense shall by paid by
the Indemnifying Party); and provided further that the failure of any
Indemnified Party to give notice as provided in this Agreement shall not
relieve the Indemnifying Party of its obligations under this Section 6. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim
or litigation.
7. Information from and Obligations of the Shareholders. Each
Shareholder whose Registrable Shares are included in himself Registered
Offering will furnish in writing to PCTH all information regarding himself and
the distribution proposed to be made by him as PCTH may request in writing and
as may be required in connection with the registration, qualification or
compliance contemplated in this Agreement. Each of the Shareholders shall
have the burden of proving that Shares of PCTH Common Stock held by him are
Registrable Shares. For purposes of this Agreement, any shares of PCTH Common
Stock held in escrow pursuant to the terms of the Merger Agreement on the date
that notice is provided under Section 1(a), above, shall not be deemed to be
Registrable Shares.
8. Stand-Off Agreement. No person who participates in a
Registered Offering in accordance with this Agreement, if so requested by PCTH
or an underwriter of securities of PCTH, will sell or otherwise transfer or
dispose of any other securities of PCTH held by such person during the 180-
day period following the effective date of a registration statement for such
Registered Offering. PCTH may impose stop transfer instructions with respect
to the securities subject to the restriction in this section until the end
of the 180-day period.
9. Miscellaneous.
(a) Waiver or Modification of Agreement. No modification
or waiver of any provision of this Agreement, nor any consent to any departure
by either party herefrom, shall in any event be effective unless the same
shall be in writing and signed by the party against which enforcement of such
modification or waiver is sought, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) Amendment of Agreement. This Agreement may be amended
with respect to any provision contained herein by a written instrument duly
executed on behalf of each party hereto.
(c) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
personally delivered, or three days after deposited in the United States mail,
first-class, postage prepaid, or upon confirmed facsimile transmission,
addressed to the respective parties hereto as follows:
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If to PCTH:
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PCT Holdings, Inc.
000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Stoel Rives
00xx Xxxxx, Xxx Xxxxx Xxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to any of the Shareholders, to the address or number shown next to their
name on the signature pages of this Agreement; or to such other address as any
party hereto may designate by like notice to the other parties hereto, with
a copy to;
Xxxxxx Xxxxxxxxx, Esq.
Inslee, Best, Doezie & Ryder
000 000xx Xxxxxx, XX, Xxxxx 0000,
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(d) No Assignment. No Shareholder may transfer any rights
granted pursuant to this Agreement to any third party.
(e) Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed an original but all of
which counterparts collectively shall constitute one instrument, and in making
proof of this Agreement, it shall never be necessary to produce or account for
more than one such counterpart.
(f) Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of PCTH, the Shareholders, and their
representatives, successors, and permitted assigns, in accordance with the
terms hereof.
(g) Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto with respect to registration
rights and supersedes all prior agreements, representations, warranties,
statements, promises, information, arrangements and understandings, whether
oral or written, express or implied, with respect to the subject matter
hereof.
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(h) Governing Law. This Agreement and its validity,
construction, enforcement, and interpretation shall be governed by the
substantive laws of the State of Washington.
(i) Waiver. No failure or delay on the part of any party
in exercising any right, power, or privilege hereunder or under any of the
documents delivered in connection with this Agreement shall operate as a
waiver of such right, power, or privilege, nor shall any single or partial
exercise of any such right, power, or privilege preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege.
(j) Headings. The descriptive section headings are for
convenience of reference only and shall not control or affect the meaning or
construction of any provision of this Agreement.
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed as of the date and year first above written.
PCTH:
PCT HOLDINGS, INC., a Nevada corporation
By /s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
Its: President
SHAREHOLDERS:
/s/ XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx
Address: 000 Xxxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
/s/ XXXX XXXXX
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Xxxx Xxxxx
Address: 0000 Xxxxxxxx X.
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
