EXHIBIT 99.14
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EQUITY REGISTRATION RIGHTS AGREEMENT
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THIS EQUITY REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
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March 1, 2001, by and among Pacific Aerospace & Electronics, Inc., a Washington
corporation (the ("Company") and the entities listed on the signature pages and
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Schedule A hereto as Holders (the "Holders").
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This Agreement is made in connection with the Term Loans made pursuant to
Loan Agreement, dated as of the date hereof, by and among the Company, each of
the Company's Subsidiaries, the Holders and DDJ Capital Management, LLC, as
agent (the "Loan Agreement"). In order to induce the Holders to enter into the
Loan Agreement, the Company has agreed to provide the registration rights set
forth in this Agreement. The execution of this Agreement is a condition to the
closing of the transactions contemplated by the Loan Agreement.
In consideration of the foregoing, the parties hereby agree as follows:
Section 1. Definitions.
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As used in this Agreement, the following terms shall have the following
meanings:
"Advice" has the meaning set forth in Section 5.
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"Affiliate" means, with respect to any specified Person, any other Person
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who, directly or indirectly, controls, is controlled by, or is under common
control with such specified Person.
"Business Day" means any day other than a day on which banks are authorized
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or required to be closed in the Commonwealth of Massachusetts or Washington
State.
"Commission" means the United States Securities and Exchange Commission.
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"Common Stock" means the common stock, par value $.001 per share, of the
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Company.
"Company" has the meaning set forth in the preamble and shall include the
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Company's successors by merger, acquisition, reorganization or otherwise.
"Controlling Persons" has the meaning set forth in Section 7(a).
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"Damages" has the meaning set forth in Section 5(a).
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"Exchange Act" means the Securities Exchange Act of 1934, as amended from
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time to time, or any successor statute, and the rules and regulations of the
Commission promulgated thereunder.
"Holder" means each holder of Registrable Securities.
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"Holders' Counsel" means ▇▇▇▇▇▇▇ Procter LLP, special counsel to the
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Holders, or any successor counsel selected by Holders of a majority in interest
of the Registrable Securities.
"Inspectors" has the meaning set forth in Section 5(m).
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"NASD" has the meaning set forth in Section 5(q).
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"Nasdaq" has the meaning set forth in Section 5(o).
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"Objection Notice" has the meaning set forth in Section 5(a).
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"Objecting Party" has the meaning set forth in Section 5(a).
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"Person" means any individual, corporation, partnership, joint venture,
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association, joint-stock company, trust, limited liability company,
unincorporated organization or government or other agency or political
subdivision thereof.
"Piggy-Back Registration" has the meaning set forth in Section 4(a).
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"Prospectus" means the prospectus included in any Registration Statement
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(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective Registration
Statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
"Public Offering" means a public offering of Securities registered on Form
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S-1 or Form S-3 (or any successor or equivalent forms) under the Securities Act
for the Company's own or others' account.
"Loan Agreement" has the meaning set forth in the preamble to this
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Agreement.
"Records" has the meaning set forth in Section 5(m).
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"Registrable Securities" means the Securities; provided, however, that any
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Securities shall cease to be Registrable Securities when (i) a Registration
Statement covering such Registrable Securities has been declared effective and
such Registrable Securities have been disposed of by the holder thereof pursuant
to such effective Registration Statement, (ii) such Registrable Securities are
transferred by the holder thereof to any Person, other than a Holder, pursuant
to Rule 144 (or any successor rule or similar provision then in effect, but not
Rule 144A) under the Securities Act, including a sale pursuant to the provisions
of Rule 144(k), or (iii) such Securities shall have ceased to be outstanding.
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"Registration Expenses" has the meaning set forth in Section 6.
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"Registration Statement" means any registration statement of the Company
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that covers any of the Registrable Securities pursuant to the provisions of this
Agreement (including any Demand Registration Statement and any Shelf
Registration Statement), and all amendments and supplements to any such
registration statement, including post-effective amendments, in each case
including the Prospectus, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
"Required Filing Date" has the meaning set forth in Section 2(a).
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"Securities" means (i) all shares of Common Stock issued or issuable to any
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Holder upon exercise of the Warrants and (ii) all shares of Common Stock
directly or indirectly issued or issuable in respect of the securities referred
to in clause (i) above by way of stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization.
"Securities Act" means the Securities Act of 1933, as amended from time to
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time, or any successor statute, and the rules and regulations of the Commission
promulgated thereunder.
"Share or Shares" means a share or shares of Common Stock which are
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Registrable Securities.
"Shelf Registration Statement" has the meaning set forth in Section 2(a).
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"Suspension Notice" has the meaning set forth in Section 5.
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"Suspension Period" has the meaning set forth in Section 5.
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"Target Effective Date" means the date 120 days after the earlier of (i)
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the Required Filing Date or (ii) the date on which the Shelf Registration
Statement is filed with the Commission.
"Target Effective Period" means the period of time between the date on
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which a Shelf Registration Statement is actually declared effective and the
later of (i) the date which is 24 months following the date hereof, and (ii) the
date which is three months after the date on which a Holder ceases to be an
Affiliate of the Company.
"Warrant Agreement" means the Warrant Agreement, dated as of the date
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hereof, between the Company and the Holders from time to time.
"Warrants" means the warrants to acquire Common Stock issued pursuant to
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the Warrant Agreement.
Section 2. Shelf Registration.
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(a) Filing; Effectiveness. Subject to Section 2(c) below, as soon as
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practicable but not later than 30 days after the date hereof (the "Required
Filing Date"), the Company shall prepare and file with the Commission a "shelf"
registration statement (the "Shelf Registration Statement") on the appropriate
form for an offering to be made on a continuous basis pursuant to Rule 415 under
the Securities Act (or any successor rule or similar provision then in effect)
covering all of the Registrable Securities. The Company shall use its best
efforts to have the Shelf Registration Statement declared effective on or before
the Target Effective Date and to keep such Shelf Registration Statement
continuously effective for the Target Effective Period. Any Holder of
Registrable Securities shall be permitted to withdraw all or any part of the
Registrable Securities from a Shelf Registration Statement at any time prior to
the effective date of such Shelf Registration Statement.
(b) Supplements; Amendments. The Company agrees to supplement or
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amend the Shelf Registration Statement, as required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the Securities Act or as reasonably requested
(which request shall result in the filing of a supplement or amendment) by any
Holder of Registrable Securities to which such Shelf Registration Statement
relates, and the Company agrees to furnish to the Holders, Holders' Counsel and
any managing underwriter copies of any such supplement or amendment prior to its
being used and/or filed with the Commission.
(c) Liquidated Damages. If the Shelf Registration Statement is not
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filed on or before the Required Filing Date, the Company shall pay liquidated
damages to each Holder in an amount equal to $.01 per Share per month beginning
on the Required Filing Date. If the Shelf Registration Statement is filed, but
has not become effective on or before the Target Effective Date, the Company
shall pay liquidated damages to each Holder in an amount equal to $.01 per Share
per month beginning on the Target Effective Date. The monthly liquidated
damages payable by the Company to the Holders as a result of a late filing or a
late declaration of effectiveness shall increase by an amount equal to $.01 per
Share per month 90 days after the Required Filing Date or the Target Effective
Date, as the case may be, and shall thereafter increase by an amount equal to
$.01 per Share per month at the end of each subsequent 90 day period for so long
as the Shelf Registration Statement is not filed or is not declared effective,
as the case may be. If a stop order is imposed or if for any other reason the
effectiveness of the Shelf Registration Statement is suspended during the Target
Effective Period, then the Company shall pay liquidated damages to each Holder
of the Registrable Securities in an amount equal to $.01 per Share per month
beginning on the date of such stop order or other suspension of effectiveness.
The monthly liquidated damages payable by the Company to the Holders as a result
of the imposition of a stop order or such other suspension of the effectiveness
of the Shelf Registration Statement during the Target Effective Period shall
increase by an amount equal to $.01 per Share per month 90 days after the stop
order was imposed or the effectiveness of the Shelf Registration Statement was
otherwise suspended, and shall thereafter increase by an amount equal to $.01
per Share per month at the end of each subsequent 90 day period for so long as
the effectiveness of the Shelf Registration Statement remains suspended, up to a
maximum amount of liquidated damages equal to $.05 per Share per month. For
purposes of the two preceding sentences, the Holders will not be entitled to
receive liquidated damages under this Agreement during a Suspension Period (as
hereinafter defined) except to the extent
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permitted by Section 5 of this Agreement. The Registrable Securities with
respect to which liquidated damages shall accrue and be payable in accordance
with this Section 2(c) shall be only those Registrable Securities held by the
Holders which are included or proposed to be included in the Shelf Registration
Statement. In the event payment of such Liquidated Damages is prohibited by the
Indenture governing the Company's 11 1/4% Senior Subordinated Notes due 2005,
such Liquidated Damages together with interest thereon at the rate of 15% per
quarter, shall accrue until such payment is no longer prohibited.
The liquidated damages payable by the Company to the Holders pursuant to
this Section 2(c) shall be deemed to commence accruing on the day on which the
event triggering such liquidated damages occurs. Such liquidated damages shall
cease to accrue (i) with respect to the liquidated damages payable as a result
of the Company's failure to file the Shelf Registration Statement on or prior to
the Required Filing Date, on the day after the Shelf Registration Statement is
filed, (ii) with respect to the liquidated damages payable as a result of the
Company's failure to have the Shelf Registration Statement declared effective on
or prior to the Target Effective Date, on the day after the Shelf Registration
Statement is declared effective, or (iii) with respect to the liquidated damages
payable as a result of the imposition of a stop order or the suspension for any
other reason of the effectiveness of the Shelf Registration Statement, on the
day after the stop order is withdrawn or the effectiveness of the Shelf
Registration Statement is otherwise reinstated.
Notwithstanding the foregoing, if the sole reason why (i) the Company has
not filed the Shelf Registration Statement on or before the Required Filing Date
and/or (ii) the Shelf Registration Statement has not become effective on or
before the Target Effective Date, is because the Holders did not provide the
Company with information which is required to be disclosed in the Shelf
Registration Statement and which the Company requested the Holders to so provide
in writing at least 7 Business Days prior to the Required Filing Date and/or the
Target Effective Date, as the case may be, the Company's obligation to pay
liquidated damages with respect to such late filing or such late declaration of
effectiveness will not begin to accrue until 5 Business Days after the Holders
have provided such information to the Company.
The Company shall pay the liquidated damages due with respect to any
Registrable Securities at the end of each month during which such liquidated
damages accrue. Liquidated damages shall be paid to the Holders of Registrable
Securities entitled to receive such liquidated damages by wire transfer of
immediately available funds to the accounts designated by such Holders.
The parties hereto agree that the liquidated damages provided for in this
Section 2 constitute a reasonable estimate as of the date hereof of the damages
that will be suffered by Holders of Registrable Securities by reason of the
failure of the Shelf Registration Statement to be filed, to be declared
effective and/or to remain effective, as the case may be, in accordance with
this Agreement. However, the right of the Holders to be paid the liquidated
damages provided for in this Section 2(c) is not intended to be and shall not be
construed or deemed to be an exclusive remedy, it being understood that the
Holders shall have the full right to pursue all available remedies at law or in
equity for any breach by the Company of any of its obligations under this
Agreement.
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(d) Effective Registration. A registration will not be deemed to
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have been effected as a Shelf Registration Statement unless the Shelf
Registration Statement with respect thereto has been declared effective by the
Commission and the Company has complied in all material respects with its
obligations under this Agreement with respect thereto; provided, however, that
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if after the Shelf Registration Statement has been declared effective, the
offering of Registrable Securities pursuant to such Shelf Registration Statement
is interfered with by any stop order, injunction or other order or requirement
of the Commission or any other governmental agency or court, such Shelf
Registration Statement will be deemed not to have become effective during the
period of such interference (and liquidated damages shall accrue and be payable
under Section 2(c)) until the offering of Registrable Securities pursuant to
such Shelf Registration Statement may legally resume. If a registration
requested pursuant to this Section 2 is deemed not to have been effected, then
the Company shall continue to be obligated to effect a registration pursuant to
this Section 2.
(e) Selection of Underwriter. If the Holders so elect, the
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offering of Registrable Securities pursuant to a Shelf Registration Statement
shall be in the form of an underwritten offering. If they so elect, such Holders
shall select one or more nationally recognized firms of investment bankers to
act as the book-running managing underwriter or underwriters in connection with
such offering and shall select any additional investment bankers and managers to
be used in connection with the offering; provided, however, that such selections
shall be subject to the consent of the Company, which consent shall not be
unreasonably withheld.
Section 3. Intentionally Omitted.
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Section 4. Piggy-Back Registration.
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(a) Request for Registration. After 30 days following the date
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hereof, each time the Company proposes to file a registration statement under
the Securities Act with respect to an offering by the Company for its own
account or for the account of any of its securityholders of any class of equity
security (other than (i) a registration statement on Form S-4 or S-8 (or any
substitute form that is adopted by the Commission) or (ii) a registration
statement filed in connection with an exchange offer or the offering of
securities solely to the Company's existing securityholders), then the Company
shall give written notice of such proposed filing to each Holder of Registrable
Securities as soon as practicable (but in no event less than 10 days before the
anticipated filing date), and such notice shall offer such Holder the
opportunity to register such number of shares of Registrable Securities as each
such Holder may request (which request must be made in writing and shall specify
the Registrable Securities intended to be disposed of by such Holder and the
intended method of distribution thereof) (a "Piggy-Back Registration"). The
Company shall permit, or, if the offering relating to a Piggy-Back Registration
is an underwritten offering, shall use its best efforts to cause the managing
underwriter or underwriters of such proposed underwritten offering to permit,
the Registrable Securities requested to be included in such Piggy-Back
Registration to be included on the same terms and conditions as any
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similar securities of the Company or any other securityholder included therein
and shall permit, or use its best efforts to cause such managing underwriter or
underwriters to permit, the sale or other disposition of such Registrable
Securities in accordance with such Holder's intended method of distribution
thereof. Any Holder shall have the right to withdraw its request for inclusion
of its Registrable Securities in any registration statement pursuant to this
Section 4 by giving written notice to the Company of such withdrawal. The
Company may withdraw a Piggy-Back Registration at any time prior to the time it
becomes effective, provided that the Company shall give immediate notice of such
withdrawal to the Holders who requested Registrable Securities to be included in
such Piggy-Back Registration and shall reimburse such Holders for all reasonable
out-of-pocket expenses (including counsel fees and expenses) incurred prior to
such withdrawal.
(b) Reduction of Offering. In connection with an underwritten
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offering where Holders have requested a Piggy-Back Registration pursuant to
Section 4(a), the Company shall use its best efforts to cause all Registrable
Securities requested to be included in such Piggy-Back Registration to be
included as provided in Section 4(a). If the managing underwriter or
underwriters of any such Piggy-Back Registration which is an underwritten
offering have informed, in writing, the Holders requesting inclusion of
Registrable Securities in such offering that it is their opinion that the total
number of shares which the Company, Holders of Registrable Securities and any
other Persons participating in such registration intend to include in such
offering is such as to materially and adversely affect the success of such
offering, then the number of shares to be offered for the account of all such
other Persons (other than the Company and the Holders) participating in such
Piggy-Back Registration shall be reduced or limited (to zero if necessary) pro
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rata in proportion to the respective number of shares requested to be included
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in such offering by such Persons to the extent necessary to reduce the total
number of shares requested to be included in such offering to the number of
shares, if any, recommended by such managing underwriter or underwriters.
Although the specific shares of Common Stock disposed of pursuant to a
Piggy-Back Registration will cease to be Registrable Securities, the mere
registration of Registrable Securities under this Section 4 shall not relieve
the Company of its obligation to effect or maintain a Shelf Registration
Statement pursuant to Section 2. No failure by the Holders to elect a Piggy-
Back Registration under this Section 4 or to complete the sale of Registrable
Securities pursuant to the registration statement effected in connection
therewith, and no withdrawal of Registrable Securities from a Piggy-Back
Registration, shall relieve the Company of any other obligation under this
Agreement.
Section 5. Registration Procedures.
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(I) In connection with the obligations of the Company to effect or cause
the registration of any Registrable Securities pursuant to the terms and
conditions of this Agreement, the Company shall effect the registration of such
Registrable Securities in accordance with the intended method of distribution
thereof as quickly as practicable, and in connection therewith:
(a) The Company shall prepare and file with the Commission a
Registration Statement on the appropriate form under the Securities Act,
which Registration Statement
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shall comply as to form in all material respects with the requirements of
the applicable form and include all financial statements required by the
Commission to be filed therewith, and use its best efforts to cause such
Registration Statement to become effective and remain effective in
accordance with the provisions of this Agreement; provided, however, that,
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at least 10 Business Days prior to filing a Registration Statement or
Prospectus or any amendments or supplements thereto, including documents
incorporated by reference after the initial filing of the Registration
Statement, the Company shall furnish to the Holders of the Registrable
Securities covered by such Registration Statement, Holders' Counsel and the
underwriters, if any, draft copies of all such documents proposed to be
filed, which documents will be subject to the review of Holders' Counsel
and the underwriters, if any, and the Company will not, unless required by
law or this Agreement, file any Registration Statement or amendment thereto
or any Prospectus or any supplement thereto to which Holders holding a
majority in interest of the Registrable Securities covered by such
Registration Statement or the underwriters with respect to such Securities,
if any, shall object; provided, however, that any such objection to the
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filing of any Registration Statement or amendment thereto or any Prospectus
or supplement thereto shall be made by written notice (the "Objection
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Notice") delivered to the Company no later than 5 Business Days after the
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party or parties asserting such objection (the "Objecting Party") receives
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draft copies of the documents that the Company proposes to file. The
Objection Notice shall set forth the objections and the specific areas in
the draft documents where such objections arise. The Company shall have
five Business Days after receipt of the Objection Notice to correct such
deficiencies to the reasonable satisfaction of the Objecting Party, and
will notify each Holder of any stop order issued or threatened by the
Commission in connection therewith and shall use its best efforts to
prevent the entry of such stop order or, if entered, to have such stop
order withdrawn at the earliest possible moment, provided, however, that
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nothing contained herein shall prevent the Company from filing documents
within the time periods specified under the Securities Act or the terms of
this Agreement.
(b) The Company shall promptly prepare and file with the Commission
such amendments and post-effective amendments to the Registration Statement
as may be necessary to keep such Registration Statement effective for as
long as the Company is required to keep such Registration Statement
effective pursuant to the terms hereof; shall cause the Prospectus to be
supplemented by any required Prospectus supplement, and, as so
supplemented, to be filed pursuant to Rule 424 under the Securities Act;
and shall comply with the provisions of the Securities Act applicable to it
with respect to the disposition of all Registrable Securities covered by
such Registration Statement during the applicable period in accordance with
the intended methods of disposition by the Holders set forth in such
Registration Statement or amendment thereto or such Prospectus or
supplement thereto;
(c) The Company shall promptly furnish to any Holder and the
underwriters, if any, without charge, such number of conformed copies of
such Registration Statement and any post-effective amendment thereto and
such number of copies of the Prospectus (including each preliminary
Prospectus) and any amendments or supplements thereto, any documents
incorporated by reference therein and such other documents as any such
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Holder or underwriter may request in order to facilitate the public sale or
other disposition of the Registrable Securities being sold by such Holder.
(d) The Company shall, on or prior to the date on which a
Registration Statement is declared effective, (i) use its best efforts to
register or qualify the Registrable Securities covered by such Registration
Statement under the securities or "blue sky" laws of such jurisdictions as
the Holders, Holders' counsel or underwriter may reasonably request) or
obtain appropriate exemptions therefrom; (ii) do any and all other acts and
things which may be necessary or advisable to enable the Holders of
Registrable Securities included in such Registration Statement to
consummate the disposition of such Registrable Securities in accordance
with their intended method of distribution thereof; (iii) use its best
efforts to keep each such state securities or "blue sky" registration or
qualification (or exemption therefrom) effective during the period in which
the Company is required to keep the Registration Statement effective; and
(iv) do any and all other acts or things which may be necessary or
advisable to enable the Holders of Registrable Securities included in such
Registration Statement to complete the disposition in such jurisdictions of
such Registrable Securities in accordance with their intended method of
distribution thereof; provided, however, that the Company shall not be
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required (A) to qualify to do business in any jurisdiction where it would
not otherwise be required to so qualify but for this Section 5(d) or (B) to
file any general consent to service of process.
(e) The Company shall use its best efforts to cause the Registrable
Securities covered by a Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company to enable
the Holders to consummate the disposition of such Registrable Securities in
accordance with their intended method of distribution thereof.
(f) The Company shall promptly notify each Holder, Holders' Counsel
and any underwriter and (if requested by any such Person) confirm such
notice in writing, (i) when a Registration Statement or a Prospectus or any
post-effective amendment or any Prospectus supplement has been filed and,
with respect to a Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the Commission
or any state securities authority for amendments and supplements to a
Registration Statement and Prospectus or for additional information after
the Registration Statement has become effective, (iii) of the issuance by
the Commission of any stop order suspending the effectiveness of a
Registration Statement or the initiation or threatening of any proceedings
for that purpose, (iv) of the issuance by any state securities commission
or other regulatory authority of any order suspending the registration or
qualification or exemption from registration or qualification of any of the
Registrable Securities under state securities or "blue sky" laws or the
initiation of any proceedings for that purpose, (v) if, between the
effective date of a Registration Statement and the closing of any sale of
Registrable Securities covered thereby, the representations and warranties
of the Company contained in any underwriting agreement, securities sales
agreement or other similar agreement, if any, relating to the offering of
such Registrable Securities cease to be true and correct in all material
respects, and (vi) at any time when a prospectus is required to be
delivered under the Securities Act, of the happening of any event which
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makes any statement of a material fact made in a Registration Statement or
related Prospectus untrue or which requires the making of any changes in
such Registration Statement or Prospectus so that such Registration
Statement or Prospectus will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and, as promptly as practicable
thereafter, prepare and file an amendment to such Registration Statement
with the Commission and furnish to the Holders and any underwriter a
supplement or amendment to such Prospectus so that, as thereafter
deliverable to the purchasers of such Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(g) The Company shall make generally available to the Holders an
earnings statement satisfying the provisions of Section 11(a) of the
Securities Act no later than 30 days after the end of the 12-month period
beginning with the first day of the Company's first fiscal quarter
commencing after the effective date of a Registration Statement, which
earnings statement shall cover said 12-month period, and which requirement
will be deemed to be satisfied if the Company timely files complete and
accurate information on Forms 10-Q, 10-K and 8-K under the Exchange Act and
otherwise complies with Rule 158 under the Securities Act.
(h) The Company shall immediately use its best efforts to prevent the
issuance of any order suspending the effectiveness of a Registration
Statement, and, if any such order suspending the effectiveness of a
Registration Statement is issued, shall promptly use its best efforts to
obtain the withdrawal of such order.
(i) The Company shall, if requested by the managing underwriter or
underwriters, if any, Holders' Counsel, or any Holder incorporate in a
Prospectus supplement or post-effective amendment such information as such
managing underwriter or underwriters or Holder or Holders' Counsel
reasonably requests to be included therein, including, without limitation,
with respect to the Registrable Securities being sold by such Holder to
such underwriter or underwriters, the purchase price being paid therefor by
such underwriter or underwriters and any other terms of an underwritten
offering of the Registrable Securities to be sold in such offering, and the
Company shall promptly make all required filings of such Prospectus
supplement or post-effective amendment.
(j) Upon request, the Company shall, after the filing with the
Commission of any document which is incorporated by reference into a
Registration Statement (in the form in which it was incorporated), deliver
a copy of each such document to each of the Holders and to Holders'
Counsel.
(k) The Company shall cooperate with the Holders and the managing
underwriter or underwriters, if any, to facilitate the timely preparation
and delivery of certificates (which shall not bear any restrictive legends
unless required under applicable law) representing Registrable Securities
sold under a Registration Statement to the
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purchasers thereof, and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriter or
underwriters, if any, or such Holders may request and keep available and
make available to the Company's transfer agent prior to the effectiveness
of such Registration Statement a supply of such certificates.
(l) The Company shall enter into such customary agreements
(including, if applicable, an underwriting agreement in customary form) and
take such other actions as the Holders or the underwriters retained by the
Holders participating in an underwritten public offering, if any, may
request in order to expedite or facilitate the disposition of Registrable
Securities (the Holders may, at their option, require that any or all of
the representations, warranties and covenants of the Company to or for the
benefit of any underwriters also be made to and for the benefit of the
Holders).
(m) The Company shall promptly make available during normal business
hours to each Holder, any underwriter participating in any disposition of
Registrable Securities pursuant to a Registration Statement, and any
attorney, accountant or other agent or representative retained by any such
Holder or underwriter (collectively, the "Inspectors"), all financial and
other records, pertinent corporate documents and properties of the Company
(collectively, the "Records"), as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the
Company's officers, directors and employees to supply all information
requested by any such Inspector in connection with such Registration
Statement.
(n) The Company shall furnish to each Holder of Registrable
Securities included in such offering and to each underwriter, if any, a
signed counterpart, addressed to such Holder or underwriter, of (i) an
opinion or opinions of counsel to the Company, and (ii) a comfort letter or
comfort letters from the Company's independent public accountants, each in
customary form and covering matters of the type customarily covered by
opinions or comfort letters, as the case may be.
(o) The Company shall use its best efforts to cause the Registrable
Securities included in a Registration Statement (if the Company and the
Registrable Securities so qualify) (i) to be listed on each national
securities exchange, if any, on which similar securities issued by the
Company are then listed, or (ii) if similar securities of the Company are
not then listed, to be authorized for quotation or listing, as applicable,
on the New York Stock Exchange or The Nasdaq National Market or the Nasdaq
Small-Cap Market.
(p) The Company shall provide a CUSIP number for all Registrable
Securities covered by a Registration Statement not later than the effective
date of such Registration Statement.
(q) The Company shall cooperate with each Holder and each underwriter
participating in the disposition of Registrable Securities, if any, and
their respective
11
counsel in connection with any filings required to be made with the
National Association of Securities Dealers, Inc. ("NASD").
(r) The Company shall, during the period when the Prospectus is
required to be delivered under the Securities Act, promptly file all
documents required to be filed with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act.
(s) The Company shall appoint or maintain a transfer agent and
registrar for all Registrable Securities covered by a Registration
Statement not later than the effective date of such Registration Statement.
(t) In connection with an underwritten offering, the Company shall
participate, to the extent reasonably requested by the managing underwriter
for the offering or the Holders, in customary efforts to sell the
securities being offered, including without limitation, participating in
"road shows."
(u) If a Holder proposes to sell a block of Registrable Securities
with a value in excess of $5.0 million, the Company shall make members of
the management of the Company reasonably available for reasonable selling
efforts, including senior management attendance at road shows; provided,
however, that the selling Holder or Holders shall reimburse the Company for
its reasonable out-of-pocket expenses actually incurred at the request of
such selling Holder or Holders in connection with such selling efforts.
(v) If the Registrable Securities are of a class of securities that
is listed on a national securities exchange, the Company shall file copies
of any Prospectus with such exchange in compliance with Rule 153 under the
Securities Act so that the Holders shall benefit from the prospectus
delivery procedures described therein.
(II) (a) In the case of a Shelf Registration Statement, each Holder, upon
receipt of any notice (a "Suspension Notice") from the Company of the happening
of any event of the kind described in Section 5(f)(vi), shall forthwith
discontinue disposition of the Registrable Securities pursuant to the Shelf
Registration Statement covering such Registrable Securities until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 5(f)(vi) or until such Holder is advised in writing (the "Advice") by
the Company that the use of the Prospectus may be resumed, and such Holder has
received copies of any additional or supplemental filings which are incorporated
by reference in the Prospectus, and, if so directed by the Company, such Holder
will, or will request the managing underwriter or underwriters, if any, to,
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice; provided, however, that the Company shall not give a Suspension Notice
-------- -------
until after the Shelf Registration Statement has been declared effective and
shall not give more than two Suspension Notices during any period of 12
consecutive months and in no event shall the period from the date on which any
Holder receives a Suspension Notice to the date on which any Holder receives
either the Advice or copies of the supplemented or amended Prospectus
contemplated by Section 5(f)(vi) (the "Suspension Period") exceed 60 days
12
and in no event shall the aggregate number of days included in all Suspension
Periods combined exceed 90 days in any consecutive 12 month period. In the
event that the Company shall give any Suspension Notice, the Company shall use
its best efforts and take such actions as are reasonably necessary to render the
Advice and end the Suspension Period as promptly as practicable. If any
Suspension Period exceeds 60 days or more than two Suspension Notices are given
during any period of 12 consecutive months, the Company shall pay liquidated
damages to each Holder of Registrable Securities in an amount equal to $.01 per
share of the Registrable Securities included in the Shelf Registration Statement
per month beginning on the 31st day of such Suspension Period or the date of
such additional Suspension Notice, as the case may be. The monthly liquidated
damages payable by the Company to the Holders as a result of the continuance of
a Suspension Period beyond 60 days or as a result of the giving of more than two
Suspension Notices during any 12 months period shall increase by an amount equal
to $.01 per share of the Registrable Securities per month 60 days after the
event triggering such liquidated damages and shall thereafter increase by an
amount equal to $.01 per share of the Registrable Securities per month at the
end of each subsequent 60 days period for so long as the event triggering such
liquidated damages has not been eliminated, up to a maximum amount of liquidated
damages equal to $.05 per share per month. The Company shall pay the liquidated
damages due with respect to any Registrable Securities at the end of each month
during which such damages accrue. Liquidated damages shall be paid to the
Holders of Registrable Securities entitled to receive such liquidated damages by
wire transfer in immediately available funds to the accounts designated by such
Holders.
(b) If any Registration Statement refers to any Holder by name
or otherwise as the holder of any securities of the Company, then such Holder
shall have the right to require (i) the insertion therein of language, in form
and substance reasonably satisfactory to such Holder, to the effect that the
holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such Holder
will assist in meeting any future financial requirements of the Company, or (ii)
in the event that such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar Federal or state securities or
"blue sky" statute and the rules and regulations thereunder then in force, the
deletion of the reference to such Holder.
Section 6. Registration Expenses. Any and all reasonable expenses
---------------------
incident to the Company's performance of or compliance with this Agreement,
including without limitation, all Commission and securities exchange, Nasdaq or
NASD registration, listing and filing fees, all fees and expenses incurred in
connection with compliance with state securities or "blue sky" laws (including
reasonable fees and disbursements of counsel for any underwriters or Holder in
connection with the state securities or "blue sky" qualifications of the
Registrable Securities), printing expenses, messenger and delivery expenses,
internal expenses (including, without limitation, all salaries and expenses of
the Company's officers and employees performing legal or accounting duties), all
expenses for word processing, printing and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, the fees and
expenses incurred in connection with the listing of the Registrable Securities,
the fees and disbursements of counsel
13
for the Company and of the independent certified public accountants of the
Company (including the expenses of any comfort letters or costs associated with
the delivery by independent certified public accountants of a comfort letter or
comfort letter requested pursuant to Section 4(n), Securities Act liability
insurance (if the Company elects to obtain such insurance), the reasonable fees
and expenses of any special experts or other Persons retained by the Company in
connection with any registration, the reasonable fees and disbursements of
Holders' Counsel and any reasonable out-of-pocket expenses of the Holders and
their agents, including any reasonable travel costs (but excluding underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of Registrable Securities) (all such expenses being herein called
"Registration Expenses"), will be borne by the Company whether or not the Shelf
Registration Statement or Piggy-Back Registration to which such expenses relate
becomes effective.
All underwriting discounts, selling commissions and expenses of
underwriters will be borne by the Holders pro rata based on the number of shares
so sold.
Section 7. Indemnification and Contribution.
--------------------------------
(a) Indemnification by the Company. The Company agrees to indemnify
------------------------------
and hold harmless, to the full extent permitted by law, each Holder, its
partners, officers, directors, members, trustees, stockholders, employees,
agents and investment advisers, and each Person who controls such Holder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, or is under common control with, or is controlled by, such Holder,
together with the partners, officers, directors, trustees, stockholders,
employees, agents and investment advisors of such controlling Person
(collectively, the "Controlling Persons"), from and against all losses, claims,
-------------------
damages, liabilities and expenses (including, without limitation, any legal or
other fees and expenses incurred by any Holder or any such Controlling Person in
connection with defending or investigating any action or claim in respect
thereof) (collectively, the "Damages") to which such Holder, its partners,
-------
officers, directors, trustees, stockholders, employees, agents and investment
advisers, and any such Controlling Person, may become subject under the
Securities Act or otherwise, insofar as such Damages (or proceedings in respect
thereof) arise out of or are based upon any untrue or alleged untrue statement
of material fact contained in any Registration Statement (or any amendment
thereto) pursuant to which Registrable Securities were registered under the
Securities Act, including all documents incorporated therein by reference, or
are caused by any omission or alleged omission to state therein a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or are caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the Company shall not be liable for Damages
-------- -------
to any Holder under this Section 6(a) to the extent that any such Damages (i)
arise out of or are based upon any such untrue statement or omission which is
based upon information relating to such Holder furnished in writing to the
Company by such Holder expressly for use in any such Registration Statement (or
any amendment thereto) or Prospectus (or amendment or supplement thereto); or
(ii) were caused by the fact that such Holder sold Securities to a Person as to
whom it shall be
14
established that there was not sent or given, or deemed sent or given pursuant
to Rule 153 under the Securities Act, at the time of or prior to the written
confirmation of such sale, a copy of the Prospectus as then amended or
supplemented if, and only if, (a) the Company has previously furnished copies of
such amended or supplemented Prospectus to such Holder and (b) such Damages were
caused by any untrue statement or omission or alleged untrue statement or
omission contained in the Prospectus so delivered which was corrected in such
amended or supplemented Prospectus. In connection with an underwritten offering,
the Company will indemnify the underwriters thereof, their officers and
directors and each Person who controls such underwriters (within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act) to
the same extent as provided above with respect to the indemnification of the
Holders of Registrable Securities except with respect to information provided by
the underwriter specifically for inclusion therein; provided, however, if
-------- -------
pursuant to an underwritten public offering of Registrable Securities, the
Company and any underwriters enter into an underwriting agreement or purchase
agreement relating to such offering that contains provisions relating to
indemnification between the Company and such underwriters such provision shall
be deemed to govern indemnification as between the Company and the underwriters.
(b) Indemnification by the Holders. Each Holder agrees, severally and
------------------------------
not jointly, to indemnify and hold harmless the Company, its directors and
officers, agents 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 Exchange
Act from and against all Damages to the same extent as the foregoing indemnity
from the Company to such Holder, but only to the extent such Damages arise out
of or are based upon any untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) or Prospectus (or any
amendment or supplement thereto) or are caused by any omission to state therein
a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, which untrue statement
or omission is based upon information relating to such Holder furnished in
writing to the Company by such Holder expressly for use in any such Registration
Statement (or any amendment thereto) or any such Prospectus (or any amendment or
supplement thereto); provided, however, that such Holder shall not be obligated
-------- -------
to provide such indemnity to the extent that such Damages result from the
failure of the Company to promptly amend or take action to correct or supplement
any such Registration Statement or Prospectus on the basis of corrected or
supplemental information furnished in writing to the Company by such Holder
expressly for such purpose. In no event shall the liability of any Holder of
Registrable Securities hereunder be greater in amount than the amount of the
proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
(c) Indemnification Procedures. In case any proceeding (including any
--------------------------
governmental investigation) shall be instituted involving any Person in respect
of which indemnity may be sought pursuant to either paragraph (a) or (b) above,
such Person (the "indemnified party") shall promptly notify the Person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceedings
and shall pay the fees and disbursements of such counsel relating to such
15
proceeding. The failure of an indemnified party to notify the indemnifying party
with respect to a particular proceeding shall not relieve the indemnifying party
from any obligation or liability (i) which it may have pursuant to this
Agreement if the indemnifying party is not materially prejudiced by such failure
to so notify it or (ii) which it may otherwise have pursuant to this Agreement.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, or (ii) the
indemnifying party fails promptly to assume the defense of such proceeding or
fails to employ counsel reasonably satisfactory to such indemnified party, or
(iii) (A) the named parties to any such proceeding (including any impleaded
parties) include both such indemnified party or an Affiliate of such indemnified
party and any indemnifying party or an Affiliate of such indemnifying party, (B)
there may be one or more defenses available to such indemnified party or any
Affiliate of such indemnified party that are different from or additional to
those available to any indemnifying party or any Affiliate of any indemnifying
party and (C) such indemnified party shall have been advised by such counsel
that there may exist a conflict of interest between or among such indemnified
party or any Affiliate of such indemnified party and such indemnifying party or
any Affiliate of such indemnifying party, in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to employ
separate counsel of its choice at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the indemnifying party, it being
understood, however, that unless there exists a conflict among indemnified
parties, the indemnifying parties shall not, in connection with any one such
proceeding or separate but substantially similar or related proceedings in the
same jurisdiction, arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for such indemnified
parties. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent but, if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify each indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of each indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which such
indemnified party is a party, and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on all claims that are the subject
matter of such proceeding with no payment by such indemnified party of
consideration in connection with such settlement.
(d) Contribution. If the indemnification from the indemnifying party
------------
provided for in this Section 7 is found, pursuant to a final judicial
determination not subject to appeal, to be unavailable to an indemnified party
hereunder or insufficient in respect of any Damages incurred by such indemnified
party, then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the Damages paid or payable by such indemnified party
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified parties in connection with the actions or
omissions that resulted in such Damages, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things, whether any
action or omission in question, including any untrue or alleged
16
untrue statement of a material fact or the omission or alleged omission to state
a material fact, has been made by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the Damages
referred to above shall be deemed to include, subject to the limitations set
forth in Section 7(c), any legal or other expenses reasonably incurred by such
party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 7(d), no underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public were offered to the public (less any underwriting discounts or
commissions) exceeds the amount of any damages which such underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and no selling Holder shall be
required to contribute any amount in excess of the amount by which the total net
proceeds received by such selling Holder with respect to Registrable Securities
sold by such selling Holder exceeds the amount of any damages which such selling
Holder has otherwise been required to pay by reason of such untrue statement or
alleged untrue statement or omission or alleged omission. Each Holder's
obligation to contribute pursuant to this Section 7(d) is several and not joint
and shall be determined by reference to the proportion that the proceeds of the
offering received by such Holder bears to the total proceeds of the offering
received by all the Holders. 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. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies that may otherwise be
available to any indemnified party at law or in equity.
Notwithstanding the foregoing, if indemnification is available under
paragraph (a) or (b) of this Section 7, the indemnifying parties shall indemnify
each indemnified party to the full extent provided in such paragraphs without
regard to the relative fault of said indemnifying party or indemnified party or
any other equitable consideration provided for in this Section 7(d).
Section 8. Rule 144. The Company covenants that it will file any reports
---------
required to be filed by it under the Securities Act and the Exchange Act, and
the rules and regulations adopted by the Commission thereunder (or, if the
Company is not required to file such reports, it will, upon the request of any
Holder, make publicly available other information so long as necessary to permit
sales of the Registrable Securities under Rule 144 under the Securities Act),
and it will take such further action as any Holder may request, all to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (b) any successor rule or similar
provision or regulation hereafter adopted by the Commission. Upon the request of
any
17
Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
Section 9. Intentionally Omitted.
---------------------
Section 10. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company has not entered into
--------------------------
nor will the Company on or after the date of this Agreement enter into any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's other issued and outstanding securities under any such agreements,
other than the rights relating to the registration granted in Section 6(b) and
6(c) of that certain Registration Rights Agreement dated July 27, 2000 between
the Company, Strong River Investment, Inc. and Bay Harbor Investments, Inc.
(collectively, the "Prior Investors") and in Section 3.9 of that certain
Securities Purchase Agreement dated July 27, 2000 between the Company and the
Prior Investors.
(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in interest of the outstanding Registrable Securities
affected by such amendment, modification, supplement, waiver or consent;
provided, however, that, no amendment, modification, supplement, waiver or
-------- -------
consent to any departure from the provisions of Section 5 hereof (other than any
immaterial amendment, modification, supplement, waiver or consent) shall be
effective as against any Holder of Registrable Securities unless consented to in
writing by such Holder.
(c) Notices. All notices and other communications provided for
-------
or permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by facsimile, registered or certified mail
(return receipt requested), postage prepaid or courier to the parties at their
respective addresses set forth on Schedule A hereto (or at such other address
----------
for any party as shall be specified by like notice, provided that notices of a
change of address shall be effective only upon receipt thereof).
All such notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; by confirmed receipt of
transmission, if sent via facsimile; and on the next Business Day if timely
delivered to a courier guaranteeing overnight delivery.
(d) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders. If any transferee of any Holder shall
acquire Registrable Securities in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all of the terms
of this Agreement,
18
and by taking and holding such Registrable Securities such person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement and such person shall be entitled to
receive the benefits hereof.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York without regard to
principles or rules of conflicts of law.
(h) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the Holders
shall be enforceable to the fullest extent permitted by law.
(i) Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and is intended to be the 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.
(j) Attorneys' Fees. In any action or proceeding brought to enforce
---------------
any provision of this Agreement or where any provision hereof is validly
asserted as a defense, the successful party shall, to the extent permitted by
applicable law, be entitled to recover reasonable attorneys' fees in addition to
any other available remedy.
(k) Further Assurances. Each party shall cooperate and take such
------------------
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
(l) Remedies. In the event of a breach or a threatened breach by any
--------
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach will be entitled to specific performance
of its rights under this Agreement or to injunctive relief, in addition to being
entitled to exercise all rights provided in this Agreement and granted by law.
The parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that remedies at law for violations
hereof, including monetary damages, are inadequate and that the right to object
in any action for specific
19
performance or injunctive relief hereunder on the basis that a remedy at law
would be adequate is waived.
[Remainder of Page Intentionally Left Blank]
20
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
THE COMPANY:
PACIFIC AEROSPACE &
ELECTRONICS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive
Officer
21
HOLDERS:
B III CAPITAL PARTNERS, L.P.
By: DDJ Capital III, LLC, its General
Partner
By: DDJ Capital Management, LLC, Manager
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
B IIIA CAPITAL PARTNERS, L.P.
By: GP III-A, LLC its General Partner
By: DDJ Capital Management, LLC, Manager
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------- -------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory Title: Authorized Signatory
DDJ CANADIAN HIGH YIELD FUND
By: DDJ Capital Management, LLC, its
attorney-in-fact
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------- -------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory Title: Authorized Signatory
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Bank & Trust, solely in its
capacity as Custodian for General Motors
Employees Global Group Pension Trust as
directed by DDJ Capital Management, LLC, and
not in its individual capacity
By: /s/ ▇▇▇▇▇▇ Blood
-----------------------------------------
Name: ▇▇▇▇▇▇ Blood
Title: Assistant Secretary
23
Schedule A
----------
Names and Addresses of Holders
------------------------------
B III CAPITAL PARTNERS, L.P.
c/o DDJ Capital Management, LLC
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
B IIIA CAPITAL PARTNERS, L.P.
c/o DDJ Capital Management, LLC
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
DDJ CANADIAN HIGH YIELD FUND
c/o DDJ Capital Management, LLC
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
State Street Bank & Trust, solely in its capacity as Custodian for General
Motors Employees Global Group Pension Trust
C/O DDJ Capital Management, LLC
Domestic Physical Delivery Instructions
For DVP/RVP:
DTC/New York Window
Acct: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Plaza Level - 3rd Floor
New York, NY 10041
Account Name: General Motors Employees Global Group Pension Trust
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For Free Receipts/Free Deliveries:
▇▇▇ ▇▇▇▇▇▇/▇▇▇▇ ▇▇▇▇▇
Securities Processing Division
State Street Bank
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▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Account Name: General Motors Employees Global Group Pension Trust
Account Number: 7M2E
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