Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of May 3,
2002, by and among Pemstar Inc., a Minnesota corporation, with headquarters
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Company"), and the undersigned buyers (each, a "Buyer" and collectively, the
"Buyers").
WHEREAS:
A. In connection with the Securities Purchase Agreement by and among
the parties hereto of even date herewith (the "Securities Purchase Agreement"),
the Company has agreed, upon the terms and subject to the conditions of the
Securities Purchase Agreement, to issue and sell to each Buyer (i) convertible
notes of the Company (the "Initial Notes"), which will be convertible into
shares of the Company's common stock, par value $0.01 per share (the "Common
Stock") (as converted, the "Initial Conversion Shares") in accordance with the
terms of the Initial Notes, and (ii) warrants (the "Initial Warrants") which
will be exercisable to purchase shares of Common Stock (the "Initial Warrant
Shares");
B. In connection with the Securities Purchase Agreement, the Buyer may
be required to purchase and the Company may be required to sell, upon the terms
and subject to the conditions of the Securities Purchase Agreement, (i)
additional convertible notes of the Company (the "Subsequent Notes"), which will
be convertible into shares of Common Stock (as converted, the "Subsequent
Conversion Shares") in accordance with the terms of the Subsequent Notes, and
(ii) additional warrants (the "Subsequent Warrants"), which will be exercisable
to purchase shares of Common Stock (the "Subsequent Warrant Shares");
C. In connection with the Securities Purchase Agreement, each Buyer has
the right, upon the terms and subject to the conditions of the Securities
Purchase Agreement, to require the Company to issue and sell to such Buyer (i)
additional convertible notes of the Company (the "Additional Notes" and,
collectively with the Initial Notes and the Subsequent Notes, the "Notes"),
which will be convertible into shares of Common Stock (as converted, the
"Additional Conversion Shares" and, collectively with the Initial Conversion
Shares and the Subsequent Conversions Shares, the "Conversion Shares") in
accordance with the terms of the Additional Notes, and (ii) additional warrants
(the "Additional Warrants" and, collectively with the Initial Warrants and the
Subsequent Warrants, the "Warrants"), which will be exercisable to purchase
shares of Common Stock (the "Additional Warrant Shares" and, collectively with
the Initial Warrant Shares and the Subsequent Warrant Shares, the "Warrant
Shares");
D. The Notes will bear interest which, subject to certain conditions,
the Company has the option to pay in shares of Common Stock (the "Interest
Shares"); and
E. To induce each Buyer to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933 Act"), and
applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
Buyer hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
(a) "Additional Effectiveness Deadline" means March 10, 2003.
(b) "Additional Registrable Securities" means (i) the Additional
Conversion Shares and the Additional Warrant Shares issued or issuable upon
conversion of the Additional Notes and exercise of the Additional Warrants,
respectively, (ii) the Interest Shares issued or issuable in relation to the
Additional Notes, (iii) any shares of capital stock issued or issuable with
respect to the Additional Conversion Shares, the Additional Warrant Shares, the
Additional Warrants, the Additional Notes or the Interest Shares issued in
relation to the Additional Notes as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, without regard to any
limitation on conversions of the Additional Notes or on exercises of the
Additional Warrants, and (iv) the General Registrable Securities relating to the
Initial Notes, the Subsequent Notes, the Initial Warrants and the Subsequent
Warrants issued on or after the date the Subsequent Registration Statement is
initially filed with the SEC (or, if the Subsequent Registration Statement is
not filed, on or after the date the Initial Registration Statement is initially
filed with the SEC).
(c) "Additional Registration Statement" means a registration statement
or registration statements of the Company filed under the 1933 Act covering the
Additional Registrable Securities.
(d) "Effectiveness Deadline" means the Initial Effectiveness Deadline,
the Subsequent Effectiveness Deadline and the Additional Effectiveness Deadline,
as applicable.
(e) "General Registrable Securities" means (i) the Initial Conversion
Shares and the Initial Warrant Shares issued or issuable upon conversion of the
Initial Notes and exercise of the Initial Warrants, respectively, (ii) the
Subsequent Conversion Shares and the Subsequent Warrant Shares issued or
issuable upon conversion of the Subsequent Notes and exercise of the Subsequent
Warrants, respectively, (iii) the Interest Shares issued or issuable in relation
to the Initial Notes and Subsequent Notes and (iv) any shares of capital stock
issued or issuable with respect to the Initial Conversion Shares, the Initial
Warrant Shares, the Initial Warrants, the Initial Notes, the Subsequent
Conversion Shares, the Subsequent Warrant Shares, the Subsequent Warrants, the
Subsequent Notes, the Interest Shares issued in relation to the Initial Notes or
the Interest shares issued in relation to the Subsequent Notes as a result of
any stock split, stock dividend, recapitalization, exchange or similar event or
otherwise, without regard to any limitation on conversions of the Initial Notes
or the Subsequent Notes or on exercises of the Initial Warrants or the
Subsequent Warrants.
(f) "Initial Effectiveness Deadline" means October 1, 2002.
(i) "Initial Registrable Securities" means General Registrable
Securities relating to the Initial Notes, the Initial Warrants, the Subsequent
Notes and the Subsequent Warrants issued on or prior to the trading day
immediately preceding the date the Initial Registration Statement is initially
filed with the SEC.
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(j) "Initial Registration Statement" means a registration statement or
registration statements of the Company filed under the 1933 Act covering the
Initial Registrable Securities.
(k) "Investor" means a Buyer, any transferee or assignee thereof to
whom a Buyer assigns its rights under this Agreement and who agrees to become
bound by the provisions of this Agreement in accordance with Section 9 and any
transferee or assignee thereof to whom a transferee or assignee assigns its
rights under this Agreement and who agrees to become bound by the provisions of
this Agreement in accordance with Section 9.
(l) "Mandatory Filing Date" means the Initial Mandatory Filing Date,
the Subsequent Mandatory Filing Date and the Additional Mandatory Filing Date
(each, as defined below), as applicable.
(m) "Person" means a corporation, a limited liability company, an
association, a partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.
(n) "Register," "registered," and "registration" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415, and the declaration or ordering of effectiveness of such Registration
Statement(s) by the SEC.
(o) "Registrable Securities" means the Initial Registrable Securities,
the Subsequent Registrable Securities and the Additional Registrable Securities,
as applicable.
(p) "Registration Statement" means the Initial Registration Statement,
the Subsequent Registration Statement and the Additional Registration Statement,
as applicable.
(q) "Rule 415" means Rule 415 promulgated under the 1933 Act or any
successor rule providing for offering securities on a continuous basis.
(r) "SEC" means the United States Securities and Exchange Commission.
(s) "Subsequent Effectiveness Deadline" means January 10, 2003.
(t) "Subsequent Registrable Securities" means General Registrable
Securities relating to the Initial Notes, the Initial Warrants, the Subsequent
Notes and the Subsequent Warrants issued during the period beginning on and
including the date the Initial Registration Statement is initially filed with
the SEC and ending on and including the trading day immediately preceding the
date the Subsequent Registration Statement is initially filed with the SEC.
(u) "Subsequent Registration Statement" means a registration statement
or registration statements of the Company filed under the 1933 Act covering the
Subsequent Registrable Securities.
Capitalized terms used herein and not otherwise defined herein shall have the
respective
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meanings set forth in the Securities Purchase Agreement.
2. REGISTRATION.
(a) Mandatory Registration.
(i) Initial Mandatory Registration. The Company shall
prepare, and, on a date during the period beginning on and
including July 20, 2002 and ending on and including August 1,
2002 (August 1, 2002 is referred to as the "Initial Mandatory
Filing Date"), file with the SEC an Initial Registration
Statement or Initial Registration Statements (as is necessary)
on Form S-3 covering the resale of all of the Initial
Registrable Securities. In the event that Form S-3 is
unavailable for such a registration, the Company shall use
such other form as is available for such a registration,
subject to the provisions of Section 2(d). The first Initial
Registration Statement prepared pursuant hereto shall register
for resale at least that number of shares of Common Stock
equal to the product of (x) 1.2 and (y) the number of Initial
Registrable Securities calculated as of the trading day
immediately preceding the date that the Initial Registration
Statement is initially filed with the SEC. The Company shall
use its best efforts to have the Initial Registration
Statement declared effective by the SEC as soon as
practicable, but in no event later than the earlier of (A)
December 1, 2002 and (B) the fifth (5th) Business Day
following the date on which the Company is notified by the SEC
that the Initial Registration Statement will not be reviewed
or is no longer subject to further review and comments.
(ii) Subsequent Mandatory Registration. The Company
shall prepare, and, on a date during the period beginning on
and including November 1, 2002 and ending on and including
November 10, 2002 (November 10, 2002 is referred to as the
"Subsequent Mandatory Filing Date"), file with the SEC a
Subsequent Registration Statement or Subsequent Registration
Statements (as is necessary) on Form S-3 covering the resale
of all of the Subsequent Registrable Securities. In the event
that Form S-3 is unavailable for such a registration, the
Company shall use such other form as is available for such a
registration, subject to the provisions of Section 2(d). The
Subsequent Registration Statement prepared pursuant hereto
shall register for resale at least that number of shares of
Common Stock equal to the product of (x) 1.2 and (y) the
number of Subsequent Registrable Securities as of the trading
day immediately preceding the date that the Subsequent
Registration Statement is initially filed with the SEC. The
Company shall use its best efforts to have such Subsequent
Registration Statement declared effective by the SEC as soon
as practicable, but in no event later than the earlier of (A)
March 10, 2003 and (B) the fifth (5th) Business Day following
the date on which the Company is notified by the SEC that the
Subsequent Registration Statement will not be reviewed or is
no longer subject to further review and comments.
(iii) Additional Mandatory Registration. The Company
shall prepare, and, on a date during the period beginning on
and including January 1, 2003 and ending on and including
January 10, 2003 (January 10, 2003 is referred to as the
"Additional Mandatory Filing Date"), file with the SEC an
Additional Registration Statement or Additional Registration
Statements (as is necessary) on Form S-3 covering the resale
of all of the Additional Registrable Securities. In the event
that Form S-3 is unavailable for such a registration, the
Company shall use such other form as is available for such a
registration, subject to the provisions of Section 2(d). The
Additional Registration Statement prepared pursuant hereto
shall register for resale at least that number of shares of
Common Stock equal to the product of (x) 1.2 and (y) the
number of Additional Registrable Securities, related to the
applicable Additional Closing Date, as of the
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trading day immediately preceding the date that the Additional
Registration Statement is initially filed with the SEC. The
Company shall use its best efforts to have such Additional
Registration Statement declared effective by the SEC as soon
as practicable, but in no event later than the earlier of (A)
May 10, 2003 and (B) the fifth (5th) Business Day following
the date on which the Company is notified by the SEC that the
Additional Registration Statement will not be reviewed or is
no longer subject to further review and comments.
(b) Allocation of Registrable Securities. The initial number
of Registrable Securities included in any Registration Statement and
each increase in the number of Registrable Securities included therein
shall be allocated pro rata among the Investors based on the number of
applicable Registrable Securities held by each Investor at the time the
Registration Statement covering such initial number of Registrable
Securities or increase thereof is last filed with the SEC. In the event
that an Investor sells or otherwise transfers any of such Person's
Registrable Securities included in any Registration Statement, each
transferee shall be allocated a pro rata portion of the then remaining
number of Registrable Securities included in such Registration
Statement for such transferor. Any shares of Common Stock included in a
Registration Statement and which remain allocated to any Person which
ceases to hold any applicable Registrable Securities shall be allocated
to the remaining Investors, pro rata based on the number of applicable
Registrable Securities then held by such Investors.
(c) Legal Counsel. Subject to Section 5 hereof, the Buyers
holding a majority of the Registrable Securities shall have the right to select
one legal counsel to review and oversee any offering pursuant to this Section 2
("Legal Counsel"), which shall be ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or such other
counsel as thereafter designated by the holders of a majority of Registrable
Securities. The Company shall reasonably cooperate with Legal Counsel in
performing the Company's obligations under this Agreement.
(d) Eligibility for Form S-3. The Company represents and
warrants that it currently meets the requirements for use of Form S-3 for
registration of the resale of the Registrable Securities, and has no actual
knowledge of any facts which would reasonably cause the Company to fail to meet
such requirements. In the event that Form S-3 is not available for the
registration of the resale of Registrable Securities hereunder, the Company
shall (i) register the resale of the Registrable Securities on another
appropriate form and (ii) undertake to register the Registrable Securities on
Form S-3 as soon as such form is available, provided that the Company shall
maintain the effectiveness of the Registration Statement then in effect until
such time as a Registration Statement on Form S-3 covering the Registrable
Securities has been declared effective by the SEC.
(e) Sufficient Number of Shares Registered. In the event that
the number of shares available under (i) a Registration Statement filed pursuant
to Section 2(a) together with (ii) any Registration Statements filed pursuant to
this Section 2(e) is insufficient to cover the resale of 110% of the Registrable
Securities required to be covered by such Registration Statement or an
Investor's allocated portion of the registered shares pursuant to Section 2(b),
the Company shall amend any such Registration Statement, or file a new
Registration Statement (on the short form available therefor, if applicable), or
both, so as to cover at least 120% of the Registrable Securities calculated as
of the trading day immediately preceding the date of the filing of such
amendment or new Registration Statement), in each case, as soon as practicable,
but in any event not later than 15 days after the necessity therefor arises. The
Company shall use its best efforts to cause such amendment and/or new
Registration Statement to become effective
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as soon as practicable following the filing thereof.
(f) Effect of Failure to File and Obtain and Maintain Effectiveness of
Registration Statement. If (i) a Registration Statement covering all the
applicable Registrable Securities and required to be filed by the Company
pursuant to this Agreement is not (A) filed with the SEC on or before the
applicable Mandatory Filing Date or (B) declared effective by the SEC on or
before the applicable Effectiveness Deadline or (ii) on any day after a
Registration Statement has been declared effective by the SEC sales of all the
applicable Registrable Securities required to be included on such Registration
Statement cannot be made (other than during an Allowable Grace Period (as
defined in Section 3(t))) pursuant to such Registration Statement (including,
without limitation, because of a failure to keep such Registration Statement
effective, to disclose such information as is necessary for sales to be made
pursuant to such Registration Statement or to register sufficient shares of
Common Stock), then, as partial relief for the damages to any holder by reason
of any such delay in or reduction of its ability to sell applicable Registrable
Securities (which remedy shall not be exclusive of any other remedies available
at law or in equity, but which shall be taken into account in determining such
other remedies), the Company shall pay to each holder of Notes an amount in cash
equal to the product of (i) the aggregate principal amount of the Notes
convertible into Conversion Shares included in such Registration Statement held
by such holder multiplied by (ii) the sum of (A) 0.02, if such Registration
Statement is not filed by the applicable Mandatory Filing Date, plus (B) 0.02,
if such Registration Statement is not declared effective by the applicable
Effectiveness Deadline, plus, (C) the product of (I) 0.0005 multiplied by (II)
the sum of (x) the number of days after the applicable Mandatory Filing Date
(but not including any days after the applicable Effectiveness Deadline) that
such Registration Statement is not filed with the SEC, plus (y) the number of
days after the applicable Effectiveness Deadline that such Registration
Statement is not declared effective by the SEC, plus (z) the number of days
after such Registration Statement has been declared effective by the SEC that
such Registration Statement is not available (other than during an Allowable
Grace Period) for the resale of all the applicable Registrable Securities
required to be included on such Registration Statement pursuant to Section 2(e).
The payments to which a holder shall be entitled pursuant to this Section 2(f)
are referred to herein as "Registration Delay Payments." Registration Delay
Payments shall be paid on the earlier of (I) the last day of the calendar month
during which such Registration Delay Payments are incurred and (II) the third
(3rd) Business Day after the event or failure giving rise to the Registration
Delay Payments is cured. In the event the Company fails to make Registration
Delay Payments in a timely manner, such Registration Delay Payments shall bear
interest at the rate of 1.5% per month (prorated for partial months) until paid
in full.
3. RELATED OBLIGATIONS.
In connection with the Company's obligation to file a Registration
Statement with the SEC pursuant to Section 2(a) or 2(e), the Company shall have
the following obligations:
(a) The Company shall submit to the SEC, within three (3)
Business Days after the Company learns that no review of a particular
Registration Statement will be made by the staff of the SEC or that the
staff has no further comments on a particular Registration Statement,
as the case may be, a request for acceleration of effectiveness of such
Registration Statement to a time and date not later than 48 hours after
the submission of such request. The Company shall keep a particular
Registration Statement effective pursuant to Rule 415 at all times
until the earlier of (i) the date as of which all the Investors may
sell all of the applicable
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Registrable Securities pursuant to Rule 144(k) under the 1933 Act (or
any successor thereto); provided, however, the Company may presume the
Investors are not affiliates of the Company under Rule 144(k) for the
purposes of calculating such date, or (ii) the date as of which none of
the Notes or Warrants convertible or exercisable into Conversion Shares
or Warrant Shares, respectively, included in such Registration
Statement is outstanding and the Investors shall have sold all the
applicable Registrable Securities (the "Registration Period"). The
Company shall ensure that each Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein)
shall not contain any 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 in which
they were made, not misleading.
(b) The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to
Rule 424 promulgated under the 1933 Act, as may be necessary to keep
such Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the
provisions of the 1933 Act with respect to the disposition of all
Registrable Securities of the Company covered by such Registration
Statement until such time as all of such Registrable Securities shall
have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such
Registration Statement. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this
Agreement (including pursuant to this Section 3(b)) by reason of the
Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any
analogous report under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), the Company shall have incorporated such report by
reference into the Registration Statement, if applicable, or shall file
such amendments or supplements with the SEC on the same day on which
the 1934 Act report is filed which created the requirement for the
Company to amend or supplement the Registration Statement.
(c) The Company shall permit Legal Counsel to review and
comment upon a Registration Statement and all amendments and
supplements thereto at least five (5) Business Days prior to their
filing with the SEC, and not file any document in a form to which Legal
Counsel reasonably objects. The Company shall not submit a request for
acceleration of the effectiveness of a Registration Statement or any
amendment or supplement thereto without the prior approval of Legal
Counsel, which consent shall not be unreasonably withheld. The Company
shall furnish to Legal Counsel, without charge, (i) any correspondence
from the SEC or the staff of the SEC to the Company or its
representatives relating to any Registration Statement, (ii) promptly
after the same is prepared and filed with the SEC, one copy of any
Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein
by reference and all exhibits and (iii) upon the effectiveness of any
Registration Statement, one copy of the prospectus included in such
Registration Statement and all amendments and supplements thereto.
(d) The Company shall furnish to each Investor whose
Registrable Securities are included in any Registration Statement,
without charge, (i) promptly after the same is prepared and filed with
the SEC, at least one copy of such Registration Statement and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference and all exhibits (ii) upon
the effectiveness of any Registration Statement, ten copies of the
prospectus included in such Registration Statement and all amendments
and
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supplements thereto (or such other number of copies as such Investor
may reasonably request) and (iii) such other documents, including
copies of any preliminary or final prospectus, as such Investor may
reasonably request from time to time in order to facilitate the
disposition of the Registrable Securities owned by such Investor.
(e) The Company shall use its best efforts to (i) register and
qualify, unless an exemption from registration or qualification
applies, all the Registrable Securities covered by a Registration
Statement under all securities or "blue sky" laws of such jurisdictions
in the United States, (ii) prepare and file in those jurisdictions,
such amendments (including post-effective amendments) and supplements
to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period,
(iii) take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale
in such jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (x)
qualify to do business in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3(e), (y) subject itself to
general taxation in any such jurisdiction, or (z) file a general
consent to service of process in any such jurisdiction. The Company
shall promptly notify Legal Counsel and each Investor who holds
Registrable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under the
securities or "blue sky" laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.
(f) The Company shall (i) notify Legal Counsel and each
Investor in writing (provided that in no event shall such notice
include any material, nonpublic information) as promptly as practicable
upon its discovery that the prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a
material fact or omission 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,
(ii) promptly prepare a supplement or amendment to such Registration
Statement to correct such untrue statement or omission, and (iii)
deliver ten copies of such supplement or amendment to Legal Counsel and
each Investor (or such other number of copies as Legal Counsel or such
Investor may reasonably request). The Company shall also promptly
notify Legal Counsel and each Investor in writing (provided that in no
event shall such notice include any material, nonpublic information)
(x) when a prospectus or any prospectus supplement or post-effective
amendment has been filed, and when a Registration Statement or any
post-effective amendment has become effective (notification of such
effectiveness shall be delivered to Legal Counsel and each Investor by
facsimile on the same day of such effectiveness and by overnight mail),
(y) of any request by the SEC for amendments or supplements to a
Registration Statement or related prospectus or related information,
and (z) of the Company's reasonable determination that a post-effective
amendment to a Registration Statement would be appropriate.
(g) The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any
of the Registrable Securities for sale in any jurisdiction and, if such
an order or suspension is issued, to obtain the withdrawal of such
order or suspension at the earliest possible moment and to notify
(provided that in no event shall such notification include any
material, nonpublic information) Legal Counsel and each Investor who
holds Registrable
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Securities being sold of the issuance of such order and the resolution
thereof or its receipt of actual notice of the initiation or threat of
any proceeding for such purpose.
(h) At the reasonable request of any Investor, the Company
shall furnish to such Investor, on the date of the effectiveness of the
Registration Statement and thereafter from time to time on such dates
as an Investor may reasonably request (i) a letter, dated such date,
from the Company's independent certified public accountants in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering,
addressed to the Investors, and (ii) an opinion, dated as of such date,
of counsel representing the Company for purposes of such Registration
Statement, in form, scope and substance as is customarily given in an
underwritten public offering, addressed to the Investors.
(i) The Company shall make available for inspection by (i) any
Investor, (ii) Legal Counsel and (iii) one firm of accountants or other
agents retained by the Investors (collectively, the "Inspectors") all
pertinent financial and other records, and pertinent corporate
documents and properties of the Company (collectively, the "Records"),
as shall be reasonably deemed necessary by each Inspector, and cause
the Company's officers, directors and employees to supply all
information which any Inspector may reasonably request; provided,
however, that each Inspector shall hold in strict confidence and shall
not make any disclosure (except to an Investor) or use of any Record or
other information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so
notified, unless (a) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the 1933 Act, (b) the release
of such Records is ordered pursuant to a final, non-appealable subpoena
or order from a court or government body of competent jurisdiction, or
(c) the information in such Records has been made generally available
to the public other than by disclosure in violation of this or any
other agreement of which the Inspector has knowledge. Each Investor
agrees that it shall, upon learning that disclosure of such Records is
sought in or by a court or governmental body of competent jurisdiction
or through other means, give prompt notice to the Company and allow the
Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential.
(j) The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the
Company unless (i) disclosure of such information is necessary to
comply with federal or state securities laws, (ii) the disclosure of
such information is necessary to avoid or correct a misstatement or
omission in any Registration Statement, (iii) the release of such
information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of this
Agreement or any other agreement. The Company agrees that it shall,
upon learning that disclosure of such information concerning an
Investor is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt written notice to such
Investor and allow such Investor, at the Investor's expense, to
undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, such information.
(k) The Company shall use its best efforts either to (i) cause
all the Registrable Securities covered by a Registration Statement to
be listed on each securities exchange on which securities of the same
class or series issued by the Company are then listed, if any, if the
listing of such Registrable Securities is then permitted under the
rules of such
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exchange, or (ii) secure designation and quotation of all the
Registrable Securities covered by the Registration Statement on the
Nasdaq National Market or, if, despite the Company's best efforts to
satisfy the preceding clause (i) or (ii), the Company is unsuccessful
in satisfying the preceding clause (i) or (ii), to secure the inclusion
for quotation on The Nasdaq SmallCap Market for such Registrable
Securities and, without limiting the generality of the foregoing, to
arrange for at least two market makers to register with the National
Association of Securities Dealers, Inc. as such with respect to such
Registrable Securities. The Company shall pay all fees and expenses in
connection with satisfying its obligation under this Section 3(k).
(l) The Company shall cooperate with the Investors who hold
Registrable Securities being offered to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive
legend) representing the Registrable Securities to be offered pursuant
to a Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the Investors may
reasonably request and registered in such names as the Investors may
request.
(m) The Company shall provide a transfer agent and registrar
of all such Registrable Securities not later than the effective date of
such Registration Statement.
(n) If requested by an Investor, the Company as promptly as
practicable shall: (i) incorporate in a prospectus supplement or
post-effective amendment such information as an Investor requests to be
included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to
the number of Registrable Securities being offered or sold, the
purchase price being paid therefor, the persons selling the Registrable
Securities and any other terms of the offering of the Registrable
Securities; (ii) make all required filings of such prospectus
supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such prospectus supplement or
post-effective amendment; and (iii) supplement or make amendments to
any Registration Statement if requested by a holder of such Registrable
Securities.
(o) The Company shall use its best efforts to cause the
Registrable Securities covered by the applicable Registration Statement
to be registered with or approved by such other United States
governmental agencies or authorities as may be necessary to consummate
the disposition of such Registrable Securities.
(p) The Company shall make generally available to its security
holders as soon as practical, but not later than 90 days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the ▇▇▇▇ ▇▇▇) covering
a twelve-month period beginning not later than the first day of the
Company's fiscal quarter next following the effective date of the
Registration Statement.
(q) The Company shall otherwise use its best efforts to comply
with all applicable rules and regulations of the SEC in connection with
any registration hereunder.
(r) Within two (2) Business Days after any Registration
Statement which includes the applicable Registrable Securities is
ordered effective by the SEC, the Company shall deliver, and shall
cause legal counsel for the Company to deliver, to the transfer agent
for such Registrable Securities (with copies to the Investors whose
Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared
10
effective by the SEC in the form attached hereto as Exhibit A.
(s) The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by the Investors of
Registrable Securities pursuant to a Registration Statement.
(t) Notwithstanding anything to the contrary in Section 3(f),
at any time after the applicable Registration Statement has been
declared effective by the SEC, the Company may delay the disclosure of
material, nonpublic information concerning the Company, the disclosure
of which at the time is not, in the good faith opinion of the Board of
Directors of the Company and after receiving advice of counsel to the
Company, in the best interest of the Company and, after receiving
advice of counsel to the Company, otherwise required (a "Grace
Period"); provided, that the Company shall promptly (i) notify each
Investor in writing of the existence of material, nonpublic information
giving rise to a Grace Period (provided that in no event shall such
notice include any material, nonpublic information) and the date on
which the Grace Period will begin, and (ii) notify each Investor in
writing of the date on which the Grace Period ends; and, provided
further, that no Grace Period shall exceed 15 consecutive days and
during any consecutive 365-day period such Grace Periods shall not to
exceed 45 days and the first day of any Grace Period must be at least
three (3) Trading Days (as defined in the Notes) after the last day of
any prior Grace Period (each, an "Allowable Grace Period"). For
purposes of determining the length of a Grace Period above, the Grace
Period shall begin on and include the date that each Investor receives
the notice referred to in clause (i) above and shall end on the date
for which the Company provides the notice referred to in clause (ii)
above (not to exceed 15 days). The provisions of Sections 2(f) and 3(g)
and the first sentence of Section 3(f) hereof shall not be applicable
during the period of any Allowable Grace Period. Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to
deliver unlegended shares of Common Stock to a transferee of an
Investor in accordance with the terms of the Securities Purchase
Agreement in connection with any sale of Registrable Securities with
respect to which an Investor has entered into a contract for sale, and
delivered a copy of the prospectus included as part of the applicable
Registration Statement, prior to the Investor's receipt of the notice
of a Grace Period and for which the Investor has not yet settled. Each
Investor agrees not to publicly disclose the fact that such Investor
has received a notice of a Grace Period, provided such notice is in
accordance with the terms of this Section 3(t).
4. OBLIGATIONS OF THE INVESTORS.
(a) At least five (5) Business Days prior to the first
anticipated filing date of a Registration Statement, the Company shall
notify each Investor in writing of the information the Company requires
from each such Investor if such Investor elects to have any of such
Investor's Registrable Securities included in such Registration
Statement. It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with
respect to the Registrable Securities of a particular Investor and for
such Investor to receive any Registration Delay Payments that such
Investor shall furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method
of disposition of the Registrable Securities held by it as shall be
reasonably required to effect the registration of such Registrable
Securities and shall execute such documents in connection with such
registration as the Company may reasonably request.
(b) Each Investor, by such Investor's acceptance of the
Registrable Securities,
11
agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any
Registration Statement hereunder, unless such Investor has notified the
Company in writing of such Investor's election to exclude all of such
Investor's Registrable Securities from such Registration Statement.
(c) Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in
Section 3(g) or the first sentence of 3(f), such Investor will
immediately discontinue disposition of Registrable Securities pursuant
to any Registration Statement(s) covering such Registrable Securities
until such Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(g) or the first sentence
of 3(f) or receipt of notice that no supplement or amendment is
required. Notwithstanding anything to the contrary, the Company shall
cause its transfer agent to deliver unlegended shares of Common Stock
to a transferee of an Investor in accordance with the terms of the
Securities Purchase Agreement in connection with any sale of
Registrable Securities with respect to which an Investor has entered
into a contract for sale, and delivered a copy of the prospectus
included as part of the applicable Registration Statement, prior to the
Investor's receipt of a notice from the Company of the happening of any
event of the kind described in Section 3(g) or the first sentence of
3(f) and for which the Investor has not yet settled.
5. EXPENSES OF REGISTRATION.
All reasonable expenses, other than underwriting discounts and
brokerage commissions, incurred in connection with registrations,
filings or qualifications pursuant to Sections 2 and 3, including,
without limitation, all registration, listing and qualifications fees,
printers and accounting fees, and fees and disbursements of counsel for
the Company shall be paid by the Company. The Company also shall
reimburse the Investors for fees and disbursements of Legal Counsel in
connection with registration filing or qualification pursuant to
Sections 2 and 3 of this Agreement, provided that the Company shall
only be required to reimburse the Investors for an amount up to or
equal to $5,000.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a
Registration Statement under this Agreement:
(a) To the fullest extent permitted by law, the Company will,
and hereby does, indemnify, hold harmless and defend each Investor, the
directors, officers, partners, employees, agents, representatives of,
and each Person, if any, who controls any Investor within the meaning
of the 1933 Act or the 1934 Act (each, an "Indemnified Person"),
against any losses, claims, damages, liabilities, judgments, fines,
penalties, charges, costs, reasonable attorneys' fees, amounts paid in
settlement or expenses, joint or several, (collectively, "Claims")
incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or
other regulatory agency, body or the SEC, whether pending or
threatened, whether or not an indemnified party is or may be a party
thereto ("Indemnified Damages"), to which any of them may become
subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the
qualification of the offering under the
12
securities or other "blue sky" laws of any jurisdiction in which
Registrable Securities are offered ("Blue Sky Filing"), or the omission
or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
(ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the
final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission
or alleged omission to state therein any material fact necessary to
make the statements made therein, in the light of the circumstances
under which the statements therein were made, not misleading, (iii) any
violation or alleged violation by the Company of the 1933 Act, the 1934
Act, any other law, including, without limitation, any state securities
law, or any rule or regulation thereunder relating to the offer or sale
of the Registrable Securities pursuant to a Registration Statement or
(iv) any material violation of this Agreement (the matters in the
foregoing clauses (i) through (iv) being, collectively, "Violations").
The Company shall reimburse the Indemnified Persons, promptly as such
expenses are incurred and are due and payable, for any reasonable
attorneys' fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (i) shall not
apply to a Claim by an Indemnified Person arising out of or based upon
a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Indemnified
Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement
thereto; (ii) shall not be available to the extent such Claim is based
on a failure of the Investor to deliver or to cause to be delivered the
prospectus made available by the Company, if such prospectus was timely
made available by the Company pursuant to Section 3(d); (iii) shall not
apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed; and (iv) the
indemnification agreement contained in this Section 6(a) with respect
to any prospectus shall not inure to the benefit of any Indemnified
Person if the untrue statement or omission of material fact contained
in such prospectus was corrected on a timely basis in such prospectus,
as then amended and supplemented, and such corrected prospectus was
delivered to such Indemnified Person in a timely manner in accordance
with this Agreement prior to the sale giving rise to such
indemnification claim and such Investor failed to deliver such
corrected prospectus prior to such sale. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
(b) In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to severally and
not jointly indemnify, hold harmless and defend, to the same extent and
in the same manner as is set forth in Section 6(a), the Company, each
of its directors, each of its officers who signs the Registration
Statement, each Person, if any, who controls the Company within the
meaning of the 1933 Act or the 1934 Act (each an "Indemnified Party")
against any Claim or Indemnified Damages to which any of them may
become subject, insofar as such Claim or Indemnified Damages arise out
of or are based upon any Violation, in each case to the extent, and
only to the extent, that such Violation occurs in reliance upon and in
conformity with written information furnished to the Company by such
Investor expressly for use in connection with such Registration
Statement; and, subject to Section 6(d), such Investor will reimburse
any reasonable attorneys' fees or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this
Section 6(b) and the
13
agreement with respect to contribution contained in Section 7 shall not
apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of such Investor, which
consent shall not be unreasonably withheld or delayed; provided,
further, however, that the Investor shall be liable under this Section
6(b) for only that amount of a Claim or Indemnified Damages as does not
exceed the net proceeds to such Investor as a result of the sale of
Registrable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9. Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this
Section 6(b) with respect to any prospectus shall not inure to the
benefit of any Indemnified Party if the untrue statement or omission of
material fact contained in the prospectus was corrected on a timely
basis in the prospectus, as then amended or supplemented.
(c) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of
any action or proceeding (including any governmental action or
proceeding) involving a Claim, such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying
party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense
thereof with counsel mutually satisfactory to the indemnifying party
and the Indemnified Person or the Indemnified Party, as the case may
be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the fees and
expenses to be paid by the indemnifying party, if, in the reasonable
opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified
Party and the indemnifying party would be inappropriate due to actual
or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in
such proceeding. The Company shall pay reasonable fees for only one
separate legal counsel for the Investors, and such legal counsel shall
be selected by the Investors holding a majority in interest of the
Registrable Securities included in the Registration Statement to which
the Claim relates. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or Claim by the indemnifying
party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person
which relates to such action or Claim. The indemnifying party shall
keep the Indemnified Party or Indemnified Person fully apprised at all
times as to the status of the defense or any settlement negotiations
with respect thereto. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its
prior written consent, provided, however, that the indemnifying party
shall not unreasonably withhold, delay or condition its consent. No
indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any
judgment or enter into any settlement or other compromise which does
not include as an unconditional term thereof the giving by the claimant
or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such Claim or litigation.
Following indemnification as provided for hereunder, the indemnifying
party shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been
made. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall
not relieve such
14
indemnifying party of any liability to the Indemnified Person or
Indemnified Party under this Section 6, except to the extent that the
indemnifying party is prejudiced in its ability to defend such action.
(d) The indemnification required by this Section 6 shall be
made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or
Indemnified Damages are incurred.
(e) The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified
Party or Indemnified Person against the indemnifying party or others,
and (ii) any liabilities the indemnifying party may be subject to
pursuant to the law.
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would
otherwise be liable under Section 6 to the fullest extent permitted by
law; provided, however, that: (i) no person involved in the sale of
Registrable Securities which person is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇)
shall be entitled to contribution from any person involved in such sale
of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities
pursuant to such Registration Statement.
8. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Investors the benefits
of Rule 144 promulgated under the 1933 Act or any other similar rule or
regulation of the SEC that may at any time permit the Investors to sell
securities of the Company to the public without registration ("Rule
144"), the Company agrees to:
(a) cause to be available adequate current public information
with respect to the Company, as those terms are understood and defined
in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act
so long as the Company remains subject to such requirements (it being
understood that nothing herein shall limit the Company's obligations
under Section 4(c) of the Securities Purchase Agreement) and the filing
of such reports and other documents is required for the applicable
provisions of Rule 144; and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement
by the Company that it has complied with the reporting requirements of
Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as
may be reasonably requested to permit the investors to sell such
securities pursuant to Rule 144 without registration.
15
9. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights under this Agreement shall be automatically
assignable by the Investors to any transferee of all or any portion of
Registrable Securities if: (i) the Investor agrees in writing with the
transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Company within a reasonable time after
such assignment; (ii) the Company is, within a reasonable time after
such transfer or assignment, furnished with written notice of (a) the
name and address of such transferee or assignee, and (b) the securities
with respect to which such registration rights are being transferred or
assigned; (iii) immediately following such transfer or assignment the
further disposition of such securities by the transferee or assignee is
restricted under the 1933 Act and applicable state securities laws;
(iv) at or before the time the Company receives the written notice
contemplated by clause (ii) of this sentence the transferee or assignee
provides the Company with a writing agreeing to be bound by all of the
provisions contained herein; and (v) such transfer shall have been made
in accordance with the applicable requirements of the Securities
Purchase Agreement.
10. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and
either retroactively or prospectively), only with the written consent
of the Company and Investors who then hold a majority of the
Registrable Securities. Any amendment or waiver effected in accordance
with this Section 10 shall be binding upon each Investor and the
Company. No such amendment shall be effective to the extent that it
applies to less than all of the holders of the Registrable Securities.
No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of this Agreement
unless the same consideration also is offered to all of the parties to
this Agreement.
11. MISCELLANEOUS.
(a) A Person is deemed to be a holder of Registrable
Securities whenever such Person owns or is deemed to own of record such
Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company shall act upon
the basis of instructions, notice or election received from the
registered owner of such Registrable Securities.
16
(b) Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement
must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or
(iii) one (1) Business Day after deposit with an overnight courier
service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall
be:
If to the Company:
Pemstar, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice
President and Chief Financial Officer
With a copy to:
▇▇▇▇▇▇ & Whitney LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to Legal Counsel:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 312-902-1061
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to a Buyer, to its address and facsimile number set forth on the
Schedule of Buyers attached hereto, with copies to such Buyer's
representatives as set forth on the Schedule of Buyers to the
Securities Purchase Agreement, or to such other address and/or
facsimile number and/or to the attention of such other person as the
recipient party has specified by written notice given to each other
party five days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing
the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by an overnight courier
service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from an overnight courier service in accordance
with clause (i), (ii) or (iii) above, respectively.
(c) Failure of any party to exercise any right or remedy under
this Agreement
17
or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(d) All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of
New York. Each party hereby irrevocably submits to the non-exclusive
jurisdiction of the state and federal courts sitting The City of New
York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives,
and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding
is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address
for such notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law. If
any provision of this Agreement shall be invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall not affect
the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of
this Agreement in any other jurisdiction. Each party hereby irrevocably
waives any right it may have, and agrees not to request, a jury trial
for the adjudication of any dispute hereunder or in connection herewith
or arising out of this Agreement or any transaction contemplated
hereby.
(e) This Agreement, the Securities Purchase Agreement and the
other Transaction Documents (as defined in the Securities Purchase
Agreement) constitute the entire agreement among the parties hereto
with respect to the subject matter hereof and thereof. There are no
restrictions, promises, warranties or undertakings, other than those
set forth or referred to herein and therein. This Agreement, the
Securities Purchase Agreement and the other Transaction Documents
supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
(f) Subject to the requirements of Section 9, this Agreement
shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto.
(g) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
(h) This Agreement may be executed in identical counterparts,
each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by
a party, may be delivered to the other party hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the
party so delivering this Agreement.
(i) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry
out the
18
intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
(j) All consents and other determinations to be made by the
Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by Investors holding a majority of the
Registrable Securities.
(k) The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent and
no rules of strict construction will be applied against any party.
(l) Except for Sections 6 and 7, this Agreement is intended
for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.
[Signature Page Follows]
19
IN WITNESS WHEREOF, each Buyer and the Company have caused this
Registration Rights Agreement to be duly executed as of day and year first above
written.
COMPANY: BUYERS:
PEMSTAR INC. SMITHFIELD FIDUCIARY LLC
By: /s/ ▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. Chill
---------------------------------- --------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. Chill
Title: Chairman, Chief Executive Title: Authorized Signatory
Officer and President
CITADEL EQUITY FUND LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. Simpler
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Simpler
Title: Vice President
SCHEDULE OF BUYERS
Buyer Address and Facsimile Number
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Smithfield Fiduciary LLC c/o Highbridge Capital Management, LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. Chill
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Capital Ltd. c/o Citadel Investment Group, L.L.C.
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Simpler
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to (if not the Legal
Counsel)
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▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ Capital Ltd. c/o Citadel Investment Group, L.L.C.
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Simpler
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to (if not the Legal
Counsel)
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
Attn: ___________________________
Re: Pemstar Inc.
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Ladies and Gentlemen:
We are counsel to Pemstar Inc., a Minnesota corporation (the
"Company"), and have represented the Company in connection with that certain
Securities Purchase Agreement (the "Purchase Agreement") entered into by and
among the Company and the buyers named therein (collectively, the "Holders")
pursuant to which on ______ __, 200_ the Company issued to the Holders
convertible notes of the Company (the "Notes") convertible into shares of the
Company's common stock, par value $0.01 per share (the "Common Stock"), and
warrants to purchase shares of Common Stock (the "Warrants"). The Notes bear
interest which the Company, subject to certain conditions, may pay in shares of
Common Stock (the "Interest Shares"). Pursuant to the Purchase Agreement, the
Company also has entered into a Registration Rights Agreement with the Holders
(the "Registration Rights Agreement") pursuant to which the Company agreed,
among other things, to register the Registrable Securities (as defined in the
Registration Rights Agreement), including the shares of Common Stock issuable
upon conversion of the Notes and exercise of the Warrants and the Interest
Shares, under the Securities Act of 1933, as amended (the "1933 Act"). In
connection with the Company's obligations under the Registration Rights
Agreement, on ____________ ___, 200_, the Company filed a Registration Statement
on Form S-3 (File No. 333-_____________) (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC") relating to the Registrable
Securities which names each of the Holders as a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[ISSUER'S COUNSEL]
By:
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cc: [LIST HOLDERS]