EXHIBIT 99.3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of April 15,
2002, by and between CTS CORPORATION, an Indiana corporation (the "Company"),
and each of the entities whose names appear on the signature pages hereof. Such
entities are each referred to herein as a "Purchaser" and, collectively, as the
"Purchasers".
The Company has agreed, on the terms and subject to the conditions set
forth in the Securities Purchase Agreement of even date herewith (the
"Securities Purchase Agreement"), to issue and sell to each Purchaser named
therein a 6 1/2% Convertible Subordinated Debenture (a "Closing Debenture" and,
together with each other Closing Debenture issued thereunder, the "Closing
Debentures").
In connection with such purchase and sale, the Company has granted to
each Purchaser an option to purchase an additional debenture (an "Option
Debenture" and, together with each other Option Debenture issued under the
Securities Purchase Agreement, the "Option Debentures"). The Closing Debentures
and the Option Debentures are collectively referred to herein as the
"Debentures". The Debentures will be, upon the issuance thereof, convertible
into shares (the "Conversion Shares") of the Company's common stock, without par
value (the "Common Stock"), pursuant to the terms thereof.
In order to induce each Purchaser to enter into the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended (the "Securities Act"), and under
applicable state securities laws. Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Securities
Purchase Agreement.
In consideration of each Purchaser entering into the Securities
Purchase Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS.
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For purposes of this Agreement, the following terms shall have the
meanings specified:
(a) "Holder" means any person owning or having the right to acquire, through
conversion of the Debentures or otherwise, Registrable Securities,
including initially each Purchaser and thereafter any permitted assignee
thereof who agrees in writing to be bound by the terms and conditions of
this Agreement;
(b) "Effective Date" means the date on which a Registration Statement is
declared effective by the Securities and Exchange Commission (the
"Commission");
(c) "Filing Deadline" means, in the case of the Initial Registration Statement,
the Initial Filing Deadline and, in the case of the Option Registration
Statement, the Option Filing Deadline;
(d) "Initial Filing Deadline" means the thirtieth (30th) day following the
Initial Closing Date;
(e) "Initial Registration Deadline" means the one hundred and twentieth (120th)
day following the Initial Closing Date;
(f) "Initial Registration Statement" means the Registration Statement relating
to resales of the Registrable Securities issued or issuable upon the
conversion of the Closing Debentures;
(g) "Option Filing Deadline" means the thirtieth (30th) day following the
Option Closing Date;
(h) "Option Registration Deadline" means the one hundred and twentieth (120th)
day following the Option Closing Date;
(i) "Option Registration Statement" means the Registration Statement relating
to resales of the Registrable Securities issued or issuable upon the
conversion or exercise of the Option Debentures;
(j) "Register", "registered" and "registration" refer to a registration
effected pursuant to this Agreement by preparing and filing a registration
statement or statements, including any post-effective amendments, in
compliance with the Securities Act and pursuant to Rule 415 under the
Securities Act ("Rule 415") or any successor rule providing for the
offering of securities on a continuous or delayed basis (a "Registration
Statement"), and the declaration or ordering of effectiveness of such
Registration Statement by the Commission;
(k) "Registration Period" has the meaning set forth in paragraph 2(c) below;
and
(l) "Registrable Securities" means the Conversion Shares and any other shares
of Common Stock issuable pursuant to the terms of the Debentures, and any
shares of capital stock issued or issuable from time to time (with any
adjustments) in replacement of, in exchange for or otherwise in respect of
the Conversion Shares.
2. REGISTRATION.
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(a) Initial Registration Statement. On or before the
Initial Filing Deadline, the Company shall prepare and file with the Commission
the Initial Registration Statement on Form S-3 as a "shelf" registration
statement under Rule 415 covering the resale of a number of shares of
Registrable Securities equal to one hundred percent (100%) of the number of
shares of Common Stock issuable on the Initial Closing Date pursuant to the
Closing Debentures at the conversion price then in effect. The Initial
Registration Statement shall state, to the extent permitted by Rule 416 under
the Securities Act, that it also covers such indeterminate number of shares of
Common Stock as may be required to effect conversion of the Closing Debentures
in order to prevent dilution resulting from stock splits, stock dividends or
similar events.
(b) Option Registration Statement. On or before the
Option Filing Deadline, the Company shall prepare and file with the Commission
the Option Registration Statement on Form S-3 as a "shelf" registration
statement under Rule 415 covering the resale of the number of shares of
Registrable Securities equal to one hundred percent (100%) of the number of
shares of Common Stock issuable on the Option Closing Date pursuant to the
Option Debentures at the conversion price then in effect. The Option
Registration Statement shall also state, to the extent permitted by Rule 416
under the Securities Act, that it covers such indeterminate number of shares of
Common Stock as may be required to effect conversion of the Option Debentures in
order to prevent dilution resulting from stock splits, stock dividends or
similar events.
(c) Effectiveness. The Company shall use its
commercially reasonable efforts to cause each Registration Statement to become
effective as soon as practicable following the filing thereof, but in no event
later than the applicable Registration Deadline. The Company shall respond
promptly to any and all comments made by the staff of the Commission with
respect to a Registration Statement (but in no event later than ten (10)
Business Days following the Company's receipt thereof), and shall submit to the
Commission, within two (2) Business Days after the Company learns that no review
of a Registration Statement will be made by the staff of the Commission or that
the staff of the Commission has no further comments on such Registration
Statement, as the case may be, a request for acceleration of the effectiveness
of such Registration Statement to a time and date not later than forty-eight
(48) hours after the submission of such request. The Company will maintain the
effectiveness of each Registration Statement until the earlier to occur of (i)
the date on which all of the Registrable Securities eligible for resale
thereunder have been publicly sold pursuant to either such Registration
Statement or Rule 144 and (ii) the date on which all of the Registrable
Securities remaining to be sold under such Registration Statement (in the
reasonable opinion of counsel to the Holder) may be immediately sold to the
public pursuant to Rule 144(k) (the period beginning on the Initial Closing Date
and ending on the earlier to occur of (i) or (ii) above being referred to herein
as the "Registration Period").
(d) Registration Default. If (A) a Registration
Statement is not filed on or before the applicable Filing Deadline or declared
effective by the Commission on or before the applicable Registration Deadline or
(B) after a Registration Statement has been declared effective by the
Commission, sales of Registrable Securities cannot be made by a Holder under
such Registration Statement for any reason not within the exclusive control of
such Holder (other than such Registrable Securities as are then freely saleable
pursuant to Rule 144(k) and other than during an Allowed Delay (as defined
below)), (each of (A) and (B) ) being referred to herein as a "Registration
Default"), the Company shall make payments to each Holder equal to (i) for the
first thirty (30) day period in which a Registration Default occurs (prorated
for any period of less than thirty days), one-half of one percent (0.5%) of the
principal amount of the Debentures then held by such Holder and (ii) for each
thirty day period in which a Registration Default exists thereafter (prorated
for any period of less than thirty days), one percent (1%) of such principal
amount. Such payment shall be in addition to any other remedies available to
each Holder at law or in equity or pursuant to the terms hereof or the
Securities Purchase Agreement, the Debentures, or otherwise.
3. PIGGYBACK REGISTRATION.
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If at any time prior to the expiration of the Registration Period, (i)
the Company proposes to register shares of Common Stock under the Securities
Act, other than on Form S-8 or any successor form, in connection with a public
offering of such shares for cash (a "Proposed Registration") and (ii) a
Registration Statement covering the resale of all of the Registrable Securities
is not then effective and available for sales thereof by the Holders, the
Company shall, at such time, promptly give each Holder written notice of such
Proposed Registration. Each Holder shall have ten (10) Business Days from its
receipt of such notice to deliver to the Company a written request specifying
the amount of Registrable Securities that such Holder intends to sell and such
Holder's intended method of distribution. Upon receipt of such request, the
Company shall use its best efforts to cause all Registrable Securities which the
Company has been requested to register to be registered under the Securities Act
to the extent necessary to permit their sale or other disposition in accordance
with the intended methods of distribution specified in the request of such
Holder; provided, however, that the Company shall have the right to postpone or
withdraw any Proposed Registration without obligation to the Holder. If, in
connection with any underwritten public offering for the account of the Company
or for stockholders of the Company that have contractual rights to require the
Company to register shares of Common Stock, the managing underwriter(s) thereof
shall impose a limitation on the number of shares of Common Stock which may be
included in a Proposed Registration because, in the judgment of such
underwriter(s), marketing or other factors dictate such limitation is necessary
to facilitate such offering, then the Company shall be obligated to include in
such Proposed Registration only such limited portion of the Registrable
Securities with respect to which each Holder has requested inclusion hereunder
as such underwriter(s) shall permit. Any exclusion of Registrable Securities
shall be made pro rata among the Holders seeking to include Registrable
Securities in a Proposed Registration, in proportion to the number of
Registrable Securities sought to be included by such Holders; provided, however,
that the Company shall not exclude any Registrable Securities unless the Company
has first excluded all outstanding securities, the holders of which are not
entitled to inclusion of such securities in such Proposed Registration or are
not entitled to pro rata inclusion with the Registrable Securities; and
provided, further, that, after giving effect to the immediately preceding
proviso, any exclusion of Registrable Securities shall be made pro rata with
holders of other securities having the right to include such securities in the
Proposed Registration.
4. OBLIGATIONS OF THE COMPANY.
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In addition to performing its obligations hereunder, including without
limitation those pursuant to paragraphs 2(a), (b) and (c) above, the Company
shall, with respect to each Registration Statement:
(a) prepare and file with the Commission, other than
during an Allowed Delay (as defined below), such amendments and supplements to
such Registration Statement and the prospectus used in connection with such
Registration Statement as may be necessary to comply with the provisions of the
Securities Act or to maintain the effectiveness of such Registration Statement
during the Registration Period, or as may be reasonably requested by a Holder in
order to incorporate information concerning such Holder or such Holder's
intended method of distribution;
(b) on or before the Initial Closing, secure the
listing of all Registrable Securities on the New York Stock Exchange, and
provide each Holder with reasonable evidence thereof;
(c) furnish to each Holder such number of copies of the
prospectus included in such Registration Statement, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as such Holder may reasonably request in order to facilitate the
disposition of such Holder's Registrable Securities, and the Company consents to
the use of such prospectus and any amendment or supplement thereto in accordance
with applicable law and the terms hereof by each of the selling Holders of
Registrable Securities in connection with the offering and sale of the
Registrable Securities in accordance with the plan and manner of distribution
which is attached hereto as Annex A and which will be included in the
prospectus;
(d) use all commercially reasonable efforts to register
or qualify the Registrable Securities under the securities or "blue sky" laws of
such jurisdictions within the United States as shall be reasonably requested
from time to time by a Holder, and do any and all other acts or things which may
be necessary or advisable to enable such Holder to consummate the public sale or
other disposition of the Registrable Securities in such jurisdictions; provided
that the Company shall not be required in connection therewith or as a condition
thereto to (i) qualify as a foreign corporation or as a dealer in securities in
any jurisdiction where it would not otherwise be required to qualify but for
this Section 4(d), (ii) file any general consent to service of process or (iii)
subject itself to taxation in any such jurisdiction if it is not so subject;
(e) in the event of a Proposed Registration that takes
the form of an underwritten public offering in which Holders of Registrable
Securities will participate, enter into (together with all Holders proposing to
distribute Registrable Securities through such underwriting) and perform its
obligations under an underwriting agreement, in usual and customary form
reasonably acceptable to the Company, with the managing underwriter of such
offering;
(f) notify each Holder immediately after becoming aware
of the occurrence of any event as a result of which the prospectus included in
such Registration Statement, as then in effect, contains an untrue statement of
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and as promptly as practicable, prepare, file and
furnish to each Holder a reasonable number of copies of a supplement or an
amendment to such prospectus as may be necessary so that such prospectus does
not contain an untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing, provided that, for
not more than (x) fifteen (15) consecutive Business Days or a total of not more
than forty-five (45) calendar days in any twelve (12) month period, in
connection with pending corporate developments, public filings with the
Commission or similar events, or (y) thirty (30) consecutive Business Days in
any twelve (12) month period in the event of a proposed or pending merger,
acquisition, financing or similar transaction, the Company may delay the
disclosure of material non-public information concerning such transaction the
public disclosure of which at the time is not, in the good faith opinion of the
Board of Directors of the Company, in the best interests of the Company and
which may, based on the advice of outside counsel, be delayed under applicable
law or regulation (an "Allowed Delay"); provided, further, that the Company
shall promptly (i) notify each Holder in writing of the existence of an Allowed
Delay (but in no event, without the prior written consent of such Holder and the
agreement of such Holder to maintain such information in confidence, shall the
Company disclose to such Holder any of the facts or circumstances regarding any
material non-public information) and (ii) advise each Holder in writing to cease
all sales under such Registration Statement until the termination of the Allowed
Delay;
(g) use all commercially reasonable efforts to prevent
the issuance of any stop order or other order suspending the effectiveness of
such Registration Statement and, if such an order is issued, to obtain the
withdrawal thereof at the earliest possible time and to notify each Holder of
the issuance of such order and the resolution thereof;
(h) notify each Holder of the termination of an Allowed
Delay or the resolution of an order referred to in Section 4(g)
(i) furnish to each Holder, on the date that such
Registration Statement becomes effective, (x) a letter, dated such date, of
outside counsel representing the Company addressed to such Holder, confirming
the effectiveness of such Registration Statement and, to the knowledge of such
counsel, the absence of any stop order, and (y) in the case of an underwritten
Proposed Registration, (A) a copy of an opinion, dated the closing date of such
Proposed Registration, of such outside counsel, in such form and substance as is
required to be given to the underwriters, and (B) a letter addressed to such
Holder, dated such closing date, from the Company's independent certified public
accountants, in such form and substance as is required to be given by the
Company's independent certified public accountants to such underwriters;
(j) provide to each Holder and its representatives the
reasonable opportunity to conduct a reasonable inquiry of the Company's
financial and other records during normal business hours and make available its
officers, directors and employees for questions regarding information which such
Holder may reasonably request in order to fulfill any due diligence obligation
on its part;
(k) permit one counsel for each unaffiliated Holder to
review such Registration Statement and all amendments and supplements thereto,
and any comments made by the staff of the Commission concerning the Registration
Statement and the Company's responses thereto, within a reasonable period of
time prior to the filing thereof with the Commission (or, in the case of
comments made by the staff of the Commission, within a reasonable period of time
following the receipt thereof by the Company), provided that such counsel shall
deliver any comments to the Company on any such amendment, supplement or
comments within 24 hours of its receipt thereof; and
(l) in the event that, at any time, the number of
shares available under such Registration Statement is insufficient to cover one
hundred percent 100% of the Registrable Securities eligible for resale
thereunder and issuable under the related Debentures (such number to be
determined using the conversion price in effect on such dates and without regard
to any restriction on the ability of a Holder to convert such Holder's
Debentures as of such date) the Company shall promptly amend such Registration
Statement or file a new registration statement, in any event as soon as
practicable, but not later than the tenth (10th) day following notice from a
Holder of the occurrence of such event, so that such Registration Statement or
such new registration statement, or both, covers no less than one hundred
percent (100%) of the Registrable Securities eligible for resale thereunder and
issuable under the related Debentures (such number to be determined using the
Conversion Price in effect on such dates and without regard to any restriction
on the ability of a Holder to convert such Debentures as of such date). Any
Registration Statement filed pursuant to this paragraph 4 shall state that, to
the extent permitted by Rule 416 under the Securities Act, such Registration
Statement also covers such indeterminate number of additional shares of Common
Stock as may become issuable upon conversion of the Debentures. Unless and until
such amendment or new Registration Statement becomes effective, each Holder
shall have the rights described in Section 2(d) above.
5. OBLIGATIONS OF EACH HOLDER.
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In connection with the registration of Registrable Securities pursuant
to a Registration Statement, each Holder shall:
(a) timely furnish to the Company in writing such information
regarding itself and the intended method of disposition of such Registrable
Securities as the Company shall reasonably request in order to effect the
registration thereof;
(b) upon receipt of any notice from the Company of the
happening of any event of the kind described in paragraphs 4(f) or 4(g),
immediately discontinue any sale or other disposition of such Registrable
Securities pursuant to such Registration Statement until the filing of an
amendment or supplement as described in paragraph 4(f) or withdrawal of the stop
order referred to in paragraph 4(g) and notification from the Company to such
effect pursuant to paragraph 4(h) hereof;
(c) in the event of an underwritten offering of such
Registrable Securities in a Proposed Registration in which such Holder
participates, enter into a customary and reasonable underwriting agreement and
execute such other documents as the managing underwriter for such offering may
reasonably request;
(d) to the extent required by applicable law, deliver a
prospectus to the purchaser of such Registrable Securities and comply with the
method of distribution specified therein;
(e) notify the Company when it has sold all of the R
egistrable Securities held by it; and
(f) notify the Company in writing in the event that any
information supplied by such Holder in writing for inclusion in such
Registration Statement or related prospectus is untrue or omits to state a
material fact required to be stated therein or necessary to make such
information not misleading in light of the circumstances then existing.
6. INDEMNIFICATION.
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In the event that any Registrable Securities are included in a
Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company shall
indemnify and hold harmless each Holder, the officers, directors, employees,
agents and representatives of such Holder, and each person, if any, who controls
such Holder within the meaning of the Securities Act or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), against any losses, claims,
damages, liabilities or reasonable out-of-pocket expenses (whether joint or
several) (collectively, including legal or other expenses reasonably incurred in
connection with investigating or defending same, "Losses"), insofar as any such
Losses arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in such Registration Statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, or (ii) the omission or alleged omission to
state therein a 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. Subject to the provisions of paragraph 6(c) below, the
Company will reimburse such Holder, and each such officer, director, employee,
agent, representative or controlling person, for any legal or other expenses as
reasonably incurred by any such entity or person in connection with
investigating or defending any Loss; provided, however, that the foregoing
indemnity shall not apply to amounts paid in settlement of any Loss if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be obligated to indemnify
any person for any Loss to the extent that such Loss is based upon and is in
conformity with written information furnished by such person expressly for use
in such Registration Statement.
(b) To the extent permitted by law, each Holder who is
named in such Registration Statement as a selling stockholder, acting severally
and not jointly, shall indemnify and hold harmless the Company, the officers,
directors, employees, agents and representatives of the Company, and each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act, against any Losses to the extent (and only to the
extent) that any such Losses are based upon and in conformity with written
information furnished by such Holder expressly for use in such Registration
Statement. Subject to the provisions of paragraph 6(c) below, such Holder will
reimburse any legal or other expenses as reasonably incurred by the Company and
any such officer, director, employee, agent, representative, or controlling
person, in connection with investigating or defending any such Loss; provided,
however, that the foregoing indemnity shall not apply to amounts paid in
settlement of any such Loss if such settlement is effected without the consent
of such Holder (which consent shall not be unreasonably withheld); and provided,
further, that, in no event shall any indemnity under this subsection 6(b) exceed
the net proceeds resulting from the sale of the Registrable Securities sold by
such Holder under such Registration Statement.
(c) Promptly after receipt by an indemnified party
under this Section 6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, 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 assume the
defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the reasonably incurred fees and expenses of one such counsel for
all indemnified parties to be paid by the indemnifying party, if representation
of such indemnified party by the counsel retained by the indemnifying party
would be inappropriate under applicable standards of professional conduct due to
actual or potential conflicting interests between such indemnified party and any
other party represented by such counsel in such proceeding. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action, to the extent prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 6 with respect to such action, but the
omission so to deliver written notice to the indemnifying party will not relieve
it of any liability that it may have to any indemnified party otherwise than
under this Section 6 or with respect to any other action unless the indemnifying
party is materially prejudiced as a result of not receiving such notice.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 6 is unavailable or insufficient to hold
harmless an indemnified party for any reason, the Company and each Holder agree,
severally and not jointly, to contribute to the aggregate Losses to which the
Company or such Holder may be subject in such proportion as is appropriate to
reflect the relative fault of the Company and such Holder in connection with the
statements or omissions which resulted in such Losses; provided, however, that
in no case shall such Holder be responsible for any amount in excess of the
proceeds resulting from the sale of the Registrable Securities sold by it under
the Registration Statement. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by the Company or by such Holder. The Company and each Holder agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), 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 is not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person who controls a
Holder within the meaning of either the Securities Act or the Exchange Act and
each officer, director, employee, agent or representative of such Holder shall
have the same rights to contribution as such Holder, and each person who
controls the Company within the meaning of either the Securities Act or the
Exchange Act and each officer, director, employee, agent or representative of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
(e) No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which such indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement (i) includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding; provided that such unconditional release may be
subject to a parallel release of a claimant or plaintiff by such indemnified
party from all liability in respect of claims or counterclaims asserted by such
indemnified party, and (ii) does not include a statement as to, or an admission
of, fault, culpability or a failure to act by or on behalf of any indemnified
party; provided, further, that, as to each indemnified party withholding such
consent, the maximum amount of the losses, damages or liabilities in respect of
which such indemnified party may seek indemnification hereunder with respect to
such claim is limited to the amount that the indemnifying party would have paid
to or on behalf of such indemnified party had such indemnified party consented
to such settlement.
(f) The obligations of the Company and each Holder
under this Section 6 shall survive the conversion of the Debentures in full, the
completion of any offering or sale of Registrable Securities pursuant to a
Registration Statement under this Agreement, or otherwise.
7. REPORTS.
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With a view to making available to each Holder the benefits of
Rule 144 under the Securities Act ("Rule 144") and any other similar rule or
regulation of the Commission that may at any time permit such Holder to sell
Registrable Securities of the Company to the public without registration, the
Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144;
(b) file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act; and
(c) furnish to such Holder, so long as such Holder owns
any Registrable Securities, forthwith upon written request (i) a written
statement by the Company, if true, that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act, (ii) to the
extent not publicly available through the Commission's ▇▇▇▇▇ database, 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 by such Holder in connection with such Holder's
compliance with any rule or regulation of the Commission which permits the
selling of any such securities without registration.
8. SUBORDINATION.
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Notwithstanding anything to the contrary contained herein, this
Agreement and the Company's obligations to make payment of any amounts hereunder
shall constitute a portion of the "Obligations" under and as defined in the
Securities Purchase Agreement and, as such, shall be subordinated to the prior
payment in full and in cash of the "Senior Debt" under and as defined in the
Securities Purchase Agreement on the terms provided in Section 6 thereof, all of
which are incorporated herein by reference. Each Holder agrees to be bound by
the terms of the Securities Purchase Agreement, including Section 6 thereof, as
if such Holder were a "Purchaser" thereunder, whether or not such Holder is a
signatory thereto.
9. MISCELLANEOUS.
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(a) Expenses of Registration. All reasonable expenses,
other than underwriting discounts and commissions and fees and expenses of
counsel to each Holder, incurred in connection with the registrations, filings
or qualifications described herein, including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees, the
fees and disbursements of counsel for the Company, and the fees and
disbursements of accountants for the Company shall be borne by the Company.
(b) Amendment; Waiver. Any provision of this Agreement
may be amended or waived only pursuant to a written instrument executed by the
Company and the holders of at least a majority of the principal amount of the
Debentures then outstanding. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each Holder, each future Holder, and the
Company. The failure of any party to exercise any right or remedy under this
Agreement or otherwise, or the delay by any party in exercising such right or
remedy, shall not operate as a waiver thereof.
(c) Notices. Any notice, demand or request required or
permitted to be given by the Company or a Holder pursuant to the terms of this
Agreement shall be in writing and shall be deemed delivered (i) when delivered
personally or by verifiable facsimile transmission, unless such delivery is made
on a day that is not a Business Day, in which case such delivery will be deemed
to be made on the next succeeding Business Day, (ii) on the next Business Day
after timely delivery to an overnight courier and (iii) on the Business Day
actually received if deposited in the U.S. mail (certified or registered mail,
return receipt requested, postage prepaid), addressed as follows:
If to the Company:
CTS Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer/General Counsel
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and if to a Holder, to such address as shall be designated by such Holder in
writing to the Company.
(d) Assignment. Upon the transfer of a Debenture or
Registrable Securities by a Holder, the rights of such Holder hereunder with
respect to such Debenture or securities so transferred shall be assigned
automatically to the transferee thereof as long as: (i) the Company is, within a
reasonable period of time following such transfer, furnished with written notice
of the name and address of such transferee, (ii) the transferee agrees in
writing with the Company to be bound by all of the provisions hereof, and (iii)
such transfer is made in accordance with the applicable requirements of the
Securities Purchase Agreement; provided, however, that the registration rights
granted in this Agreement shall not be transferred to any person or entity that
receives a Debenture or Registrable Securities pursuant to an effective
registration statement under the Securities Act or pursuant to a public
transaction under Rule 144 or any successor provision thereto.
(e) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed one and the same instrument. This Agreement, once
executed by a party, may be delivered to any other party hereto by facsimile
transmission.
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to the conflict of laws provisions thereof.
[Signature Page to Follow]
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first-above written.
CTS CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President and Chief Financial Officer
Halifax Fund, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
CTS CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President and Chief Financial Officer
▇▇▇▇ Convertible Arbitrage Fund, Ltd.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
CTS CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President and Chief Financial Officer
Palladin Overseas Fund, Ltd.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
CTS CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President and Chief Financial Officer
Lancer Securities (Cayman) Ltd.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
CTS CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President and Chief Financial Officer
Palladin Partners I, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
CTS CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President and Chief Financial Officer
Steelhead Investments, Ltd.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
CTS CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President and Chief Financial Officer
Ram Trading, Ltd.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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ANNEX A
Plan of Distribution
The selling security holders may sell the securities from time to time
on any stock exchange or automated interdealer quotation system on which the
securities are listed, in the over-the-counter market, in privately negotiated
transactions or otherwise, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to prevailing market prices or
at prices otherwise negotiated. The selling security holders may sell the
securities by one or more of the following methods:
(a) block trades in which the broker or dealer so engaged
will attempt to sell the securities as agent but may position
and resell a portion of the block as principal to facilitate
the transaction;
(b) purchases by a broker or dealer as principal and resale by the
broker or dealer for its own account;
(c) ordinary brokerage transactions and transactions in which the
broker solicits purchases;
(d) privately negotiated transactions;
(e) short sales;
(f) through option or derivatives transactions; and
(g) any combination of any of these methods of sale.
The selling security holders may engage brokers and dealers, and any
brokers or dealers may arrange for other brokers or dealers to participate in
effecting sales of the securities. These brokers, dealers or underwriters may
act as principals, or as an agent of a selling security holder. Broker-dealers
may agree with a selling security holder to sell a specified number of the
securities at a stipulated price per security. If the broker-dealer is unable to
sell securities acting as agent for a selling security holder, it may purchase
as principal any unsold securities at the stipulated price. Broker-dealers who
acquire securities as principals may thereafter resell the securities from time
to time in transactions on any stock exchange or automated interdealer quotation
system on which the securities are then listed, at prices and on terms then
prevailing at the time of sale, at prices related to the then-current market
price or in negotiated transactions. Broker-dealers may use block transactions
and sales to and through broker-dealers, including transactions of the nature
described above. The selling security holders may also sell the securities that
qualify in accordance with Rule 144 under the Securities Act of 1933, as
amended, rather than pursuant to this prospectus, regardless of whether the
securities are covered by this prospectus.
To the extent required under the Securities Act of 1933, as amended,
the aggregate amount of selling security holders' securities being offered and
the terms of the offering, the names of any agents, brokers, or dealers and any
applicable commission with respect to a particular offer will be set forth in an
accompanying prospectus supplement. Any dealers, brokers or agents participating
in the distribution of the securities may receive compensation in the form of
underwriting discounts, concessions, commissions or fees from a selling security
holder and/or purchasers of selling security holders' securities, for whom they
may act (which compensation as to a particular broker-dealer might be in excess
of customary commissions).
The selling security holders and any brokers, dealers or agents that
participate in the distribution of the securities may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended, and
any discounts, concessions, commissions or fees received by them and any profit
on the resale of the securities sold by them may be deemed to be underwriting
discounts and commissions.
A selling security holder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of the
securities in the course of hedging the positions they assume with that selling
security holder, including, without limitation, in connection with distributions
of the securities by those broker-dealers.
The selling security holders and other persons participating in the
sale or distribution of the securities will be subject to applicable provisions
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, including Regulation M. This regulation may limit the
timing of purchases and sales of any of the securities by the selling security
holders and any other person. The anti-manipulation rules under the Securities
Exchange Act of 1934, as amended, may apply to sales of securities in the market
and to the activities of the selling security holders and their affiliates.
Furthermore, Regulation M may restrict the ability of any person engaged in the
distribution of the securities to engage in market-making activities with
respect to the particular securities being distributed for a period of up to
five business days before the distribution. These restrictions may affect the
marketability of the securities and the ability of any person or entity to
engage in market-making activities with respect to the securities.
The Company has agreed to indemnify in certain circumstances the
selling security holders against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. The selling security holders have
agreed to indemnify the Company in certain circumstances against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.