POWER SPECTRA, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into effective this 11th day of April, 1997, by and among POWER SPECTRA,
INC., a California corporation (the "Company") and certain undersigned holders
of the Company's securities as are appear on the signature page hereof and
similar forms of Registration Rights Agreement entered into in connection with
the private placement of the Company's Common Stock pursuant to the offering
memorandum dated February 7, 1997 and/or for whose benefit this Agreement is
being entered into as described elsewhere herein.
NOW, THEREFORE, in consideration of the above recitals and the mutual
promises contained herein, the parties do hereby agree as follows:
1. REGISTRATION UNDER THE SECURITIES ACT.
1.1 Definitions. For purposes of this Agreement:
(a) The term "Act" means the Securities Act of 1933, as
amended.
(b) The terms "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Act and the declaration or ordering of
effectiveness of such registration statement;
(c) The term "Registrable Securities" means (i) the Company's
no par value Common Stock (the "Common Stock") sold in a private offering more
fully described in the Company's Confidential Private Offering Memorandum dated
February 7, 1997 (the "Offering") and "Memorandum," respectively); and (ii) any
Common Stock or other securities of the Company issued or issuable with respect
to such shares of Common Stock upon any stock split, stock dividend,
recapitalization, or similar event, or any Common Stock otherwise issued or
issuable with respect to such Common Stock; provided, however, that Registrable
Securities shall not include any securities no longer subject to the
restrictions on transfer imposed by or on account of the Act.
(d) The term "Holder" means the person or entity holding
Registrable Securities, who is also a party to this Agreement.
(e) Unless otherwise indicated, any other capitalized term
used herein shall have the meaning set forth in the Memorandum.
1.2 Registrable of Registrable Securities. Within six (6) months
following the final closing of the Offering, the Company shall use its best
efforts to file a registration statement under the Act covering the Registrable
Securities and to use its further best efforts to cause such registration
statement to be declared effective by the Securities and Exchange Commission.
The Company is obligated to effect only one (1) registration pursuant to this
Section 1.2 unless the Company fails to effect the registration of all
Registrable Securities for which registration is required and have such
registration declared or ordered effective.
1.3 Obligations of the Company. Whenever required under Paragraph 1.2
to use its best efforts to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement with respect to such
Registrable Securities and use its best efforts to cause such registration
statement to be declared or ordered effective.
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to keep such registration
statement effective for a period ending the earlier of (i) the completion of the
distribution of the Registrable Securities included in the registration
statement or (ii) one year from the date hereof.
(c) Furnish to the Holder such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably appropriate for the
distribution of the securities covered by the registration statement, provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service or
process in any such states or jurisdictions, and further provided that (anything
in this Agreement to the contrary notwithstanding with respect to the bearing of
expenses) if any jurisdiction in which the securities shall be qualified shall
require that expenses incurred in connection with the qualification of the
securities in that jurisdiction be borne by selling shareholders, then such
expenses shall be payable by selling shareholders pro rata, to the extent
required by such jurisdiction.
(e) Use its best efforts to maintain a current prospectus
allowing the resale of the Shares covered by the registration statement for so
long as any of the Registrable Securities remain unsold pursuant to the
prospectus, subject to termination of this obligation as set forth in paragraph
1.8, below.
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1.4 Furnish Information. It shall be a condition preceding to the
obligations of the Company to take any action pursuant to this Agreement as to
any Holder that such Holder shall furnish to the Company such information
regarding him or it, the Registrable Securities held by him or it, and the
intended method of disposition of such securities as the Company shall
reasonably request and as shall be requested or required by the Commission or
otherwise in connection with the action to be taken by the Company.
1.5 Expenses of Registration. All expenses incurred in connection with
registration pursuant to Paragraph 1.2 hereof (excluding underwriters' discounts
and commissions), including, without limitation, all registration and
qualification fees, printers' and accounting fees, and fees and disbursements of
counsel for the Company, shall be borne by the Company.
1.6 Delay of Registration. Notwithstanding any other provision of this
Agreement, no Holder shall have any right to take any action to restrain, enjoin
or otherwise delay any registration as the result of any controversy that might
arise with respect to the interpretation or implementation of this Agreement.
1.7 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify
each Holder, each of its officers and directors and partners, and each person
controlling such Holder within the meaning of Section 15 of the Act, with
respect to which registration, qualification or compliance has been effected
pursuant to this Agreement, and each underwriter, if any, and each person who
controls any underwriter within the meaning of Section 15 of the Act, against
all expenses, claims, losses, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or any 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 in which they were made, not
misleading, or any violation by the Company of the Act or any rule or regulation
promulgated under the Act applicable to the Company in connection with any such
registration, qualification or compliance, and the Company will reimburse each
such Holder, each of its officers and directors and partners, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or alleged omission, made in reliance upon and in conformity with
written information furnished to the Company by such Holder, officer, director,
partner, controlling person or underwriter and stated to be specifically for use
therein.
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(b) To the extent required by law, each Holder will, if
Registrable Securities held by such Holder are included in the securities as to
which such registration, qualification or compliance is being effected,
indemnify the Company, each of its officers and directors, each underwriter of
the Company's securities covered by such a registration statement, each person
who controls the Company or such underwriting within the meaning of Section 15
of the Act, and each other such Holder, each of its officers and directors and
partners and each person controlling such Holder within the meaning of Section
15 of the Act, against all expenses, claims, losses, damages and liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to such registration,
qualification or compliance, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company, such Holders,
such directors, officers, partners, persons, underwriters or control persons for
any legal or any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or allege omission) is made
in such registration statement, prospectus, offering circular or other document
in reliance upon and in conformity with written information furnished to the
Company by any instrument duly executed by such Holder and stated to be
specifically for use therein. Notwithstanding the foregoing, the liability of
each Holder under this subsection (b) shall be limited in an amount equal to the
initial public offering price of the shares sold by such Holder, unless such
liability arises out of or is based on willful conduct by such Holder.
(c) Each party entitled to indemnification under this
Paragraph 1.7 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense; and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless the failure to
give such notice is materially prejudicial to an Indemnified Party's ability to
defend such action; and provided further that the Indemnifying Party shall not
assume the defense for matters as to which there is a conflict of interest or
separate and different defenses. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.
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1.8 Termination of the Company's Obligations. The Company shall have no
obligations pursuant to Paragraph 1.2 if the benefits of Rule 144 promulgated
under the Act as currently in effect or any other similar rule or regulation
that may hereinafter be enacted by the Commission permitting a Holder to sell
securities of the Company to the public without registration on terms and
conditions as beneficial to the Holder as those of Rule 144 as it exists at the
date of this Agreement, are available to the Holder, then the Company shall have
no obligation to register securities (or continue to maintain an effective
registration statement covering the resale of such securities) pursuant to this
Agreement to any Holder who owns less than one percent (1%) of the Company's
Common Stock (on a fully diluted basis) and whose sales are not required to be
aggregated with others.
1.9 Reports under the Securities Exchange Act of 1934. With a view to
making available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the Commission that may at any time
permit a Holder to sell securities of the Company to the public without
registration, the Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144, at all times subsequent to ninety (90)
days after the effective date of the first registration statement covering an
underwritten public offering filed by the Company, or if such registration
statement has already been filed, as of the date hereof;
(b) File with the Commission in a timely manner all reports
and other documents required of the Company under the Act and the Securities
Exchange Act of 1934, as amended (the "1934 Act"); and
(c) Furnish to any Holder so long as such Holder owns any of
the Registrable Securities forthwith upon request a written statement by the
Company that it has complied with the reporting requirements of Rule 144 (at any
time after ninety (90) days after the effective date of said first registration
statement filed by the Company, or if such registration statement has already
been filed, as of the date hereof), and of the Act and the 1934 Act (at any time
after it has become subject to such reporting requirements, or, if already so
subject, as of the date hereof), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed by the
Company as may be reasonably requested in availing any Holder of any rule or
regulation of the Commission permitting selling of any such securities without
registration.
1.10 Proposed Transfers of Registrable Securities. The Holder of each
certificate representing Registrable Securities, by accepting those securities,
agrees to comply in all respects with the following provisions:
(a) Prior to any proposed transfer of any Registrable
Securities (other than under the circumstances described in Paragraph 1.2,
above), the Holder of those Registrable Securities shall given written notice to
the Company of such Holder's intention to effect the transfer.
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(b) Each such notice shall describe the manner and
circumstances of the proposed transfer, shall be accompanied by such information
as is necessary in order to establish that such transfer may be made without
registration under the Act and, other than in connection with a proposed
transfer in according with Rule 144 or any similar rule or regulation that may
hereafter be enacted by the Commission permitting a Holder to sell securities to
the public without registration on terms and conditions analogous to those of
Rule 144, and except with respect to transactions not involving a change in
beneficial ownership or transactions involving the distribution without
consideration of Registrable Securities by any of the Holders to any of their
partners, retired partners, or any estate of their partners or retired partners,
or to any affiliated venture capital partnership or to any members of the
immediate family of the Holders or to a family trust of the Holders, shall be
accompanied by either (i) a written opinion of legal counsel who shall be
reasonably satisfactory to the Company and its counsel stating that the proposed
transfer of the Registrable Securities may be effected without registration
under the Act and without qualification; or (ii) a Ano action" letter from the
SEC; or (iii) an appropriate registration statement with respect to such
Registrable Securities filed by the Company with the Commission and declared
effective by the Commission.
(c) Having satisfied paragraph 1.10(b) above, the Holder of
such Registrable Securities shall be entitled to transfer the Registrable
Securities in accordance with the terms of the notice delivered by the Holder to
the Company.
(d) Each certificate evidencing the Registrable Securities
transferred shall bear the appropriate restrictive legends as set forth on the
Registrable Securities themselves prior to transfer. But the Company shall
remove such restrictive legend upon the request of the Holder if (i) the Company
has received an opinion of counsel who is reasonably acceptable to it and its
counsel to the effect that registration of any and all future transfers is not
required; and (ii) an appropriate registration statement with respect to such
Registrable Securities has been filed by the Company with the Commission and
declared effective by the Commission; or (iii) such transfer shall be made in
compliance with the requirements of Rule 144 or its successor. In these events,
the Company shall cause new certificates without the said restrictive legend to
be issued promptly to the Holder in exchange for outstanding legended
certificates, and such unlegended securities shall no longer be Registrable
Securities under this Agreement.
1.11 Transfer of Registration Rights. The registration rights of the
Holders under this Agreement may be transferred to any transferee who acquires
Registrable Securities; provided, however, that such transfer of rights shall be
effective only where the Company is given written notice by the Holder stating
the names and address of the transferee and identifying the securities with
respect to which the rights under this Agreement are being assigned.
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IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights
Agreement on the date indicated below.
Date: April 11, 1997
POWER SPECTRA, INC.
a California corporation
By: /s/ Xxxxxx X. Xxxx
---------------------------------------
Its: Chief Financial Officer and Secretary
---------------------------------------
Date: , 1997
HOLDER (Non-Individual):*
---------------------------------------
NAME OF ENTITY
By:
---------------------------------------
Number of Shares:
--------------------------
Date: , 1997
HOLDER (Individual):*
---------------------------------------------
Number of Shares:
--------------------------
* See attached list of Subscribers attached as Exhibit A.
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Exhibit A
---------
Subscribers who are parties to
Registration Rights Agreement
dated April 11, 0000
Xxxxxxx & Xx.
Xxxxxxxxxx Central Trust Bank TTEE FBO Xxxxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxx
Xxxx Xxxxxxxx
European Industries
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxxx Xxxxx
Xxxxxxx X. Xxxxx
Xxxx X. Xxxxxxxxxx and Xxxxxx X. Xxxxxxxx
Xxxxxxx Xxxxxxxx
Xxxxxxx X. Xxx Xxxx
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