Document:

GDC Draft 2/9/02

Exhibit

10.1

 

 

 

MANUFACTURERS’

SERVICES LIMITED,

 

as the Company

 

and

 

BUYERS,

 

as defined herein

 

SECURITIES

PURCHASE AGREEMENT

 

Dated as of March

12, 2002

 

5.25% Convertible

Preferred Stock

and Warrants to Purchase Common Stock

 

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of March 12,

2002, by and among Manufacturers’ Services Limited, a Delaware corporation (the

“Company”), and the Buyers listed on the Schedule of Buyers attached hereto as Exhibit

A (individually, a “Buyer” and, collectively, the “Buyers”).

 

THE PARTIES TO THIS AGREEMENT enter into this Agreement on the basis

of the following facts, intentions and understandings:

 

A.            In

accordance with the terms and conditions of this Agreement, the Company has

agreed to issue and sell, and the Buyers have agreed to purchase in the

aggregate, (i) 830,000 shares, par value $.001 per share, of 5.25% Series

A Convertible Preferred Stock of the Company (the “Series A Preferred”) which

shall be convertible into shares of the common stock, par value $.001 per

share, (the “Common Stock”) of the Company (as converted, the “Conversion

Shares”) and (ii) Warrants (such Warrants, substantially in the form attached

hereto as Exhibit B, as the same may be amended, modified or

supplemented from time to time in accordance with the terms thereof, the “Buyer

Warrants”) to purchase 1,612,281 shares of Common Stock (as exercised,

collectively, the “Buyer Warrant Shares”).

 

B.            To

induce Robertson Stephens, Inc. (“Robertson”) to act as exclusive placement

agent with respect to the offering of the Series A Preferred and the Buyer

Warrants (the “Offering”), the Company has agreed (i) to issue Warrants (such

Warrants, substantially in the form attached hereto as Exhibit B, as the

same may be amended, modified or supplemented from time to time in accordance

with the terms thereof, the “Robertson Warrants” and, together with the Buyer

Warrants, the “Warrants”) to purchase (A) the number of shares of Common Stock

set forth on the Schedule of Fees attached hereto as Exhibit C (the

“Schedule of Fees”) and (B) in the event that Robertson, with the consent of

the Company, exercises the Over-Allotment Option (as defined below), an

additional number of shares of Common Stock set forth on the Schedule of Fees

(as exercised collectively, the “Robertson Warrant Shares” and, together with

the Buyer Warrant Shares, the “Warrant Shares”), and (ii) to grant Robertson an

option, exercisable only with the consent of the Company (the “Over-Allotment Option”),

which may be exercised at any time and from time to time within the sixty (60)

days after the Closing Date, to place additional Series A Preferred and

Warrants after the Closing Date, so that the Offering is up to an aggregate of

1,030,000 shares of Series A Preferred and Warrants to purchase 2,000,781

Warrant Shares.

 

C.            Contemporaneously

with the execution and delivery of this Agreement, certain of the parties

hereto are executing and delivering a Registration Rights Agreement

substantially in the form attached hereto as Exhibit D (as the same may

be amended, modified or supplemented from time to time in accordance with the

terms thereof, the “Registration Rights Agreement”) pursuant to which the

Company has agreed to provide certain of the Buyers and Robertson with the

benefit of certain registration rights under the Securities Act of 1933, as

amended, and the rules and regulations promulgated thereunder (the “Securities

Act”) and applicable state securities laws, on the terms and subject to the conditions

set forth therein.

 

 

NOW THEREFORE, in consideration of the promises and

the mutual covenants contained herein and other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged,

the Company and each of the Buyers hereby agree as follows:

 

SECTION 1.  Purchase and Sale of Series A Preferred and

Warrants.

 

(a)   Purchase of Series A Preferred and Warrants.  Subject to the satisfaction (or waiver) of

the conditions set forth in Sections 6 and 7 of this Agreement, the Company

shall issue and sell to each Buyer, and each Buyer severally and not jointly

agrees to purchase from the Company, such number of shares of Series A

Preferred and the Buyer Warrants to purchase the aggregate number of shares of

Common Stock in the respective amounts, set forth opposite such Buyer’s name on

the Schedule of Buyers attached hereto as Exhibit A (the

“Closing”).  The Company shall issue to

each Buyer one share of Series A Preferred and Warrants to purchase 1.9425

Warrant Shares for each Fifty United States Dollars ($50.00) tendered by each

such Buyer.

 

(b)   The Closing.  The date and time of the Closing (the “Closing Date”) shall be

10:00 a.m., New York time, on March 14, 2002, subject to the satisfaction (or

waiver) of the conditions set forth in Sections 6 and 7 of this Agreement.  The Closing shall occur on the Closing Date

at the offices of Hale and Dorr, LLP, 60 State Street, Boston, Massachusetts.

 

(c)   Form of Payment.  On the Closing Date, (i) each Buyer shall pay the Company for the

shares of Series A Preferred and the related Buyer Warrants to be issued and

sold to such Buyer on the Closing Date, by wire transfer of immediately

available funds in accordance with the Company’s written wire instructions

attached hereto on Schedule A, (ii) the Company shall reimburse each

Buyer for its reasonable expenses to the extent required by Section 4(j) of

this Agreement, and (iii) the Company shall deliver to each Buyer certificates

in the name of each Buyer representing the number of shares of Series A

Preferred which such Buyer is then purchasing hereunder, along with Warrants

representing the related number of Warrant Shares, duly executed on behalf of

the Company and registered in the name of such Buyer.

 

SECTION 2.  Buyer’s Representations

and Warranties. 

Each Buyer represents and warrants to the Company with respect to only

itself that as of the date hereof:

 

(a)   Investment

Purpose.  Such Buyer (i) is

acquiring the Series A Preferred and the Warrants, (ii) upon conversion of

the Series A Preferred owned by it, will acquire the Conversion Shares then

issuable upon conversion thereof, and (iii) upon exercise of the Warrants held

by it, will acquire the Warrant Shares then issuable upon exercise thereof (the

Series A Preferred, the Conversion Shares, the Warrants and the Warrant Shares

collectively are referred to herein as the “Securities”) for its own account

for investment only and not with a view towards, or for resale in connection

with, the public sale or distribution thereof, except pursuant to sales

registered or exempt from registration under the Securities Act; provided,

however, that by making the representations herein, such Buyer does not agree

to hold any of the Securities for any minimum or other specific term; provided,

further, that any disposition shall be in accordance with or pursuant to a

registration statement or an exemption under the Securities Act.

 

2

 

(b)   Accredited

Investor Status.  Such Buyer is an

“accredited investor” as that term is defined in Rule 501(a) of Regulation D

under the Securities Act and was not organized for the specific purpose of

acquiring the Securities.

 

(c)   Reliance

on Exemptions.  Such Buyer

understands that the Securities are being offered and sold to it in reliance on

specific exemptions from the registration requirements of the United States

federal and state securities laws and that the Company is relying upon the

truth and accuracy of, and such Buyer’s compliance with, the representations,

warranties, agreements, acknowledgments and understandings of such Buyer set

forth herein and in the applicable Warrant in order to determine the

availability of such exemptions and the eligibility of such Buyer to acquire

the Securities.

 

(d)   Information. 

Such Buyer (i) has been furnished with or believes it has had full

access to all of the information that it considers necessary or appropriate for

deciding whether to purchase the Series A Preferred, the Warrants, the

Conversion Shares and the Warrant Shares, (ii) has had an opportunity to ask

questions and receive answers from the Company regarding the terms and

conditions of the offering of the Securities, (iii) can bear the economic risk

of a total loss of its investment in the Series A Preferred and the Warrants

and (iv) has such knowledge and experience in business and financial matters so

as to enable it to understand the risks of and form an investment decision with

respect to its investment in the Securities. Neither such inquiries nor any

other due diligence investigations conducted by such Buyer or its advisors, if

any, or its representatives shall limit, modify, amend or affect the Company’s

representations and warranties contained in this Agreement and such Buyer’s

right to rely thereon.

 

(e)   No Governmental Review.  Such Buyer understands that no United States

federal or state agency or any other government or governmental agency has

passed on or made any recommendation or endorsement of the Securities or the

fairness or suitability of the investment in the Securities nor have such

authorities passed upon or endorsed the merits of the offering of the

Securities.

 

(f)    Transfer or Resale.  Such Buyer understands that, except as

provided in the Registration Rights Agreement (and to the extent applicable in

the Amended and Restated Stockholders Agreement dated as of June __, 2000 among

the parties listed on the signature pages thereto (the “Original Stockholders

Agreement”), the Securities have not been, and the Series A Preferred and the Warrants

will not be, registered under the Securities Act or any state securities laws,

and may not be offered for sale, sold, assigned or transferred without

registration under the Securities Act or an exemption therefrom and that, in

the absence of an effective registration statement under the Securities Act,

such Securities may only be sold under certain circumstances as set forth in

the Securities Act. In that connection, such Buyer is aware of Rule 144 under

the Securities Act and the restrictions imposed thereby.

 

(g)   Legends.

(1)   Such Buyer understands that

any certificate evidencing shares of Series A Preferred and any certificate

evidencing such Warrant (and all securities issued in exchange therefor or in

substitution thereof, other than Common Stock, if any, issued upon conversion

thereof (in the case of a 

 

3

 

share of Series A

Preferred) or upon exercise thereof (in the case of a Warrant), which shall

bear the legend set forth in Section 2(g)(2) of this Agreement, if applicable)

shall bear a legend in substantially the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN

REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE

SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED

OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE

SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE

SECURITIES LAWS OR AN EXEMPTION THEREFROM. THE SECURITIES MAY BE PLEDGED IN

CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY THE

SECURITIES.

 

The Company shall place the following legend on any

Warrant or certificate representing shares of Series A Preferred, as

appropriate, held by or transferred to an “affiliate” (as defined in Rule

501(b) of Regulation D under the Securities Act) of the Company:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE

HELD BY A PERSON WHO MAY BE DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR

PURPOSES OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED

(THE “SECURITIES ACT”), AND MAY BE SOLD ONLY IN COMPLIANCE WITH RULE 144,

PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR

PURSUANT TO AN EXEMPTION THEREFROM.

 

The legends set forth above shall be removed and the

Company shall issue a new certificate representing shares of Series A Preferred

or Warrants, as appropriate, of like tenor and number of shares, as

appropriate, and which shall not bear the restrictive legends required by this

Section 2(g)(1), if the holder of the Securities has not been an “affiliate”

(as defined in Rule 501(b) of Regulation D under the Securities Act)

during the preceding three (3) months, upon expiration of the two year holding

period under Rule 144(k) of the Securities Act (or any successor rule).

 

(2)   Such Buyer understands that

any stock certificate representing Conversion Shares or Warrant Shares shall

bear a legend in substantially the following form (unless (i) such Conversion

Shares or Warrant Shares have been transferred or sold pursuant to an effective

registration statement, (ii) such Conversion Shares or Warrant Shares, as

appropriate, have been transferred or sold pursuant to the exemption from

registration 

 

4

 

provided by Rule

144 under the Securities Act, (iii) such Conversion Shares or Warrants Shares,

as appropriate, may be transferred pursuant to Rule 144(k) under the Securities

Act, or (iv) unless otherwise agreed by the Company in writing with written

notice to the transfer agent):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE

NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE

STATE LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR

ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE

SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE

SECURITIES LAWS OR AN EXEMPTION THEREFROM. THE SECURITIES MAY BE PLEDGED IN

CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY THE

SECURITIES.

 

The Company shall instruct the transfer agent to place

the following legend on any certificate evidencing Conversion Shares or Warrant

Shares held by or transferred to an “affiliate” (as defined in Rule 144(a)(1)

under the Securities Act) of the Company:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE HELD BY

A PERSON WHO MAY BE DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF

RULE 144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES

ACT”), AND MAY BE SOLD ONLY IN COMPLIANCE WITH RULE 144, PURSUANT TO AN

EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO A

VALID EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.

 

The legend set forth above shall be removed and the

Company shall issue the relevant Securities without such legend to the holder

of the Securities upon which it is stamped, (i) if such Securities are

registered for resale under the Securities Act and have been transferred or

sold pursuant to an effective registration statement, (ii) if, in connection

with a sale transaction, such holder provides the Company with an opinion of

counsel reasonably acceptable to the Company to the effect that a public sale,

assignment or transfer of the Securities may be made without registration under

the Securities Act, or (iii) if the holder of the Securities has not been

an “affiliate” (as defined in Rule 501(b) of Regulation D under the

Securities Act) during the preceding three (3) months, upon expiration of the two-year

period under Rule 144(k) of the Securities Act (or any successor rule).  The Company shall not require such opinion

of counsel for the sale of Securities in accordance with Rule 144 of the

Securities Act, provided the Seller provides 

 

5

 

 

such representations that the Company shall reasonably

request confirming compliance with the requirements of Rule 144.

 

(3)   Such Buyer understands that,

in the event Rule 144(k) as promulgated under the Securities Act (or any

successor rule) is amended to change the two-year or three-month periods under

Rule 144(k) (or the corresponding periods under any successor rule), (i) each

reference in Sections 2(g)(1) and 2(g)(2) of this Agreement to “two (2) years”

or the “two-year period” and to “three (3) months” shall be deemed for all

purposes of this Agreement to be references to such changed period or periods,

and (ii) all corresponding references in the Series A Preferred and Warrants

shall be deemed for all purposes to be references to the changed period or

periods, provided that such changes shall not become effective if they are

otherwise prohibited by, or would otherwise cause a violation of, the

then-applicable federal securities laws.

 

(h)   Authorization; Enforcement; Validity.  Each of this Agreement and, to the extent

such Buyer is a party thereto, the Registration Rights Agreement have been duly

and validly authorized, executed and delivered on behalf of such Buyer and are

a valid and binding agreement of such Buyer enforceable against such Buyer in

accordance with its respective terms, subject as to enforceability to general

principles of equity and to applicable bankruptcy, insolvency, reorganization,

moratorium, liquidation and other similar laws relating to, or affecting

generally, the enforcement of applicable creditors’ rights and remedies.

 

(i)    Residency.  Such Buyer is a resident of that country or

state specified in its address on the Schedule of Buyers attached hereto as Exhibit

A.

 

(j)      No

Conflicts.  The execution and

performance of each of this Agreement and, to the extent such Buyer is a party

thereto, the Registration Rights Agreement do not conflict with any agreement

to which such Buyer is a party or is bound thereby, any court order or judgment

addressed to such Buyer, or the constituent documents of such Buyer.

 

SECTION 3.  Representations and

Warranties of the Company. 

The Company represents and warrants to Robertson and each of the Buyers

that as of the date hereof subject to such exceptions as set forth in a

Disclosure Schedule:

 

(a)   Organization and Qualification.  The Company and its “Subsidiaries” (which,

for purposes of this Agreement, means any entity in which the Company, directly

or indirectly, owns a majority of the capital stock or other equity or similar

interests) are corporations, partnerships or limited liability companies duly

organized and validly existing in good standing under the laws of the

jurisdiction in which they are incorporated or organized, and have the requisite

corporate, limited liability company or partnership power and authorization to

own their properties and to carry on their business as now being

conducted.  Copies of the Company’s

Certificate of Incorporation and Bylaws, and all amendments thereto, have been

filed as exhibits to the Company’s SEC Documents, are in full effect and have

not been modified.  Each of the Company

and its Subsidiaries is duly qualified as a foreign corporation, partnership or

limited liability company to do business and is in good standing in every

jurisdiction in which its 

 

6

 

ownership of property or the nature of the business

conducted and proposed to be conducted by it makes such qualification

necessary, except to the extent that the failure to be so qualified or be in

good standing would not have a Material Adverse Effect.  As used in this Agreement, “Material Adverse

Effect” means any material adverse effect on the business, properties, assets,

operations, results of operations or financial condition of the Company and its

Subsidiaries, taken as a whole, or on the transactions contemplated hereby or

by the agreements and instruments to be entered into in connection herewith, or

on the authority or ability of the Company to perform its obligations under the

Transaction Documents (as defined below). A complete list of Subsidiaries is

set forth on Schedule 3(a).

 

(b)   Authorization; Enforcement; Validity.  The Company has the requisite corporate

power and authority to enter into and perform its obligations under this

Agreement, the Warrants, the Registration Rights Agreement, the Irrevocable

Transfer Agent Instructions (as defined in Section 5 of this Agreement) and

each of the other agreements entered into by the parties hereto in connection

with the transactions contemplated by this Agreement (collectively, the

“Transaction Documents”), and to issue the Securities in accordance with the

terms hereof and thereof.  On or before

the Closing Date, the Company will have duly adopted, executed and filed with

the Secretary of State of the State of Delaware a Certificate of Designations

in the form set forth in Exhibit E hereto (the “Certificate Amendment”)

establishing the terms and the rights and preferences of the Series A Preferred

and the Company has not adopted or filed any other document designating terms,

rights or preferences of its preferred stock. 

The execution and delivery of the Transaction Documents by the Company

and the consummation by it of the transactions contemplated hereby and thereby,

including, without limitation, the issuance of the Series A Preferred, the

reservation for issuance and the issuance of the Conversion Shares issuable

upon conversion thereof, the issuance of the Warrants and the reservation for

issuance and the issuance of the Warrant Shares issuable upon exercise of the

Warrants, have been duly authorized by the Company’s Board of Directors and no

further consent or authorization is required of the Company’s Board of

Directors or shareholders.  The Transaction

Documents have been duly executed and delivered by the Company. The Transaction

Documents constitute the valid and binding obligations of the Company

enforceable against the Company in accordance with their terms, except as such

enforceability may be limited by general principles of equity or applicable

bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws

relating to, or affecting generally, the enforcement of creditors’ rights and

remedies.

 

(c)   Capitalization. 

Except for any shares issuable upon exercise of options issued pursuant

to employee benefit plans disclosed in the Company’s SEC Documents, the

capitalization of the Company is as described in the Company’s SEC Documents.

All of the Company’s outstanding shares have been, or upon issuance will be,

validly issued and are fully paid and nonassessable. The Company’s Common Stock

is registered pursuant to Section 12(b) of the Exchange Act of 1934, and is

listed for trading on the Principal Market (as defined below).  Except as set forth in this Agreement, the

Registration Rights Agreement and as set forth in the SEC Documents, (i) no

shares of the Company’s capital stock are subject to preemptive rights or any

other similar rights or any liens or encumbrances; (ii) there are no

outstanding options, warrants, scrip, rights to subscribe to, calls or

commitments of any character whatsoever relating to, or securities or rights

convertible into, any shares of capital stock of the Company or any of its

Subsidiaries, or contracts, commitments, understandings or arrangements by

which the Company or any of its Subsidiaries is or may become bound to issue

additional shares of capital 

 

7

 

stock of the Company or any of its Subsidiaries or

options, warrants, scrip, rights to subscribe to, calls or commitments of any

character whatsoever relating to, or securities or rights convertible into, any

shares of capital stock of the Company or any of its Subsidiaries (other than

any such options, warrants, scrip, rights, calls, commitments, securities,

understandings and arrangement outstanding under plans disclosed in the SEC

Documents (as defined below)); (iii) there are no outstanding debt securities,

notes, credit agreements, credit facilities or other agreements, documents or

instruments evidencing indebtedness of the Company or any of its Subsidiaries

or by which the Company or any of its Subsidiaries is or may become bound; (iv)

there are no outstanding securities or instruments of the Company or any of its

Subsidiaries which contain any redemption or similar provisions, and there are

no contracts, commitments, understandings or arrangements by which the Company

or any of its Subsidiaries is or may become bound to redeem a security of the

Company or any of its Subsidiaries; (v) there are no securities or instruments

containing anti-dilution or similar provisions that will be triggered by the

issuance of the Securities as described in this Agreement; (vi) the Company

does not have any stock appreciation rights or “phantom” stock plans or

agreements or any similar plan or agreement; (vii) to the Company’s knowledge,

(A) no current officer or director who individually owns one percent (1%) or

more of the Company’s outstanding capital stock or (B) other beneficial owner

of five percent (5%) or more of the Company’s outstanding capital stock, has

pledged shares of the Company’s capital stock in connection with a margin

account or other loan secured by such capital stock; and (viii) to the

Company’s knowledge, the Company and its Subsidiaries have no liabilities or

obligations required to be disclosed in the SEC Documents but not so disclosed

in the SEC Documents, other than those incurred in the ordinary course of the

Company’s or its Subsidiaries’ respective businesses.

 

(d)   Issuance of Securities.  The Securities are duly authorized and, upon

issuance in accordance with the terms of the applicable Transaction Documents,

shall be (i) validly issued, fully paid and non-assessable and (ii) free

from all taxes, liens and charges with respect to the issuance thereof, other

than any liens or encumbrances created by or imposed by the Buyers, and shall

not be subject to preemptive rights or other similar rights of shareholders of

the Company. As of the Closing, at least 9,218,930 shares of Common Stock

(subject to adjustment pursuant to the Company’s covenant set forth in Section

4(e) of this Agreement) will have been duly authorized and reserved for

issuance upon conversion of the Series A Preferred and exercise of the

Warrants. Upon conversion or issuance in accordance with the terms of the

Series A Preferred or upon exercise or issuance in accordance with the terms of

the Warrants, as applicable, the Conversion Shares and the Warrant Shares, as

the case may be, will be validly issued, fully paid and non-assessable and free

from all taxes, liens and charges with respect to the issue thereof, other than

any liens or encumbrances created by or imposed by the Buyers, with the holders

being entitled to all rights accorded to a holder of Common Stock.  Subject to the accuracy of the

representations and warranties of each of the Buyers in this Agreement, the

issuance by the Company of the Securities is exempt from registration under the

Securities Act and state securities laws.

 

(e)   No Conflicts.  The execution, delivery and performance of the Transaction

Documents by the Company and the consummation by the Company of the

transactions contemplated hereby and thereby (including, without limitation,

the reservation for issuance and issuance of the Conversion Shares and the

Warrant Shares) will not (i) result in a violation of the Articles of

Incorporation or the Bylaws; (ii) conflict with, or constitute a default (or an

event 

 

8

 

which with notice or lapse of time or both would

become a default) under, or give to others any rights of termination,

amendment, acceleration or cancellation of, any agreement, indenture or

instrument to which the Company or any of its Subsidiaries is a party, except

for such conflicts, defaults, terminations, amendments, accelerations,

cancellations and violations as would not, individually or in the aggregate,

have a Material Adverse Effect; or (iii) result in a violation of any law,

rule, regulation, order, judgment or decree (including federal and state

securities laws and regulations and the rules and regulations of the Principal

Market (as defined below)) applicable to the Company or any of its Subsidiaries

or by which any property or asset of the Company or any of its Subsidiaries is

bound or affected. Neither the Company nor its Subsidiaries is in violation of

any material term of or in default under its Articles of Incorporation, Bylaws

or their organizational charter or bylaws, respectively. Neither the Company

nor any of its Subsidiaries is in violation of any term of or in default under

any contract, agreement, mortgage, indebtedness, indenture, instrument,

judgment, decree or order or any statute, rule or regulation applicable to the

Company or its Subsidiaries, except where such violations and defaults would

not result, either individually or in the aggregate, in a Material Adverse

Effect. The business of the Company and its Subsidiaries is not being conducted

in violation of any law, ordinance or regulation of any governmental entity,

except where such violations would not result, either individually or in the

aggregate, in a Material Adverse Effect. Except as disclosed on Schedule

3(e) of this Agreement, specifically contemplated by this Agreement, as

required under the Securities Act or as required by Blue Sky filings (but only

to the extent that such filings may be made after the Closing), the Company is

not required to obtain any consent, authorization or order of, or make any

filing or registration with, any court or governmental agency or any regulatory

or self-regulatory agency in order for it to execute, deliver or perform any of

its obligations under or contemplated by the Transaction Documents. Except as

disclosed in Schedule 3(e) of this Agreement, all consents,

authorizations, orders, filings and registrations which the Company is required

to obtain pursuant to the preceding sentence have been obtained or effected on

or prior to the date hereof and copies of such consents, authorizations,

orders, filings and registrations have been delivered to the Buyers.  The Company is not in violation of the

listing requirements of the Principal Market, and has no actual knowledge of

any facts which would reasonably lead to delisting or suspension of the Common

Stock by the Principal Market in the foreseeable future.  The Company and its Subsidiaries are

currently unaware of any facts or circumstances which might give rise to any of

the foregoing events set forth in this paragraph.

 

(f)    SEC Documents; Financial Statements.  Since June 22, 2000, the Company has filed

all reports, schedules, forms, statements and other documents required to be

filed by it with the Securities and Exchange Commission (the “Commission”)

pursuant to the reporting requirements of the Securities Exchange Act of 1934,

as amended, and the rules and regulations promulgated thereunder (the “Exchange

Act”) (all of the foregoing filed prior to or on the date hereof and all

exhibits included therein and financial statements and schedules thereto and

documents incorporated by reference therein being hereinafter referred to as

the “SEC Documents”). As of the date of filing of such SEC Documents, each such

SEC Document, as it may have been subsequently amended by filings made by the

Company with the SEC prior to the date hereof, complied in all material

respects with the requirements of the Exchange Act and the rules and

regulations of the Commission promulgated thereunder applicable to such SEC

Document. None of the SEC Documents, as of the date filed and as they may have

been subsequently amended by filings made by the Company with the Commission

prior to the date 

 

9

 

hereof, contained any untrue statement of a material

fact or omitted to state a material fact required to be stated therein or

necessary in order to make the statements therein, in the light of the

circumstances under which they were made, not misleading. As of their

respective dates, the financial statements of the Company included in the SEC

Documents complied as to form in all material respects with applicable

accounting requirements and published rules and regulations of the Commission

with respect thereto. Such financial statements have been prepared in accordance

with generally accepted accounting principles, consistently applied in the

United States, during the periods involved (except (i) as may be otherwise

indicated in such financial statements or the notes thereto, or (ii) in the

case of unaudited interim statements, to the extent they may exclude footnotes,

may be condensed or summary statements and may be subject to normal year end

adjustments), corresponds to the books and records of the Company and fairly

present in all material respects the consolidated financial position of the

Company as of the dates thereof and the results of its operations and cash

flows for the periods then ended. The SEC Documents, the Confidential Private

Placement Memorandum dated as of March 12, 2002 (the “Confidential Private Placement

Memorandum”) and the other written information provided by or on behalf of the

Company to the Buyers, taken as a whole, do not contain any untrue statement of

a material fact or omit to state any material fact necessary in order to make

the statements therein, in the light of the circumstances under which they are

or were made, not misleading.  The

Company satisfies the requirements for use of Form S-3 for registration of the

resale of Registrable Securities (as defined in the Registration Rights Agreement)

and does not have any knowledge or reason to believe that it does not satisfy

such requirements or any knowledge of any fact which would reasonably result in

its not satisfying such requirements. The Company is not required to file and

will not be required to file any agreement, note, lease, mortgage, deed or

other instrument entered into prior to the date hereof and to which the Company

is a party or by which the Company is bound which has not been previously filed

as an exhibit to its reports filed with the Commission under the Exchange Act.

 

(g)   Absence of Litigation.  Except as disclosed in the section titled

“Legal Proceedings” in the Company’s Annual Report on Form 10-K for the period

ended December 31, 2000, there is no action, suit, proceeding, inquiry or

investigation before or by any court, public board, government agency,

self-regulatory organization or body pending or, to the knowledge of the

Company or any of its Subsidiaries, threatened in writing against the Company

or any of the Subsidiaries or any of the Company’s or the Subsidiaries’

officers or directors in their capacities as such.

 

(h)   No Integrated Offering.  Neither the Company, nor any of its

affiliates, nor any person acting on its or their behalf has, directly or

indirectly, made any offers or sales of any security or solicited any offers to

buy any security, under circumstances that would cause the offering of the

Securities contemplated by this Agreement to be integrated with prior offerings

by the Company for purposes of the Securities Act or any applicable shareholder

approval provisions, including, without limitation, under the rules and

regulations of any exchange or automated quotation system on which any of the

securities of the Company are listed or designated, nor will the Company or any

of its Subsidiaries take any action or steps that would cause the offering of

the Securities contemplated by this Agreement to be integrated with other

offerings

 

10

 

(i)    Intellectual Property Rights.  To the knowledge of the Company, the Company

and its Subsidiaries own or possess adequate rights or licenses to use all

trademarks, trade names, trade dress, service marks, service mark

registrations, service names, patents, patent rights, copyrights, inventions,

technology licenses, approvals, governmental authorizations, trade secrets, and

other intellectual property rights (collectively, “Intellectual Property”)

necessary to conduct their respective businesses as now conducted and as currently

contemplated to be conducted by them as described in the SEC Documents, except

where the failure to currently own or possess would not have a Material Adverse

Effect.  The Company does not have any

knowledge of any infringement by the Company or its Subsidiaries of

Intellectual Property rights of others. 

There is no claim, action or proceeding being made by the Company or its

Subsidiaries regarding the Intellectual Property rights of the Company or its

Subsidiaries or, to the Company’s knowledge, brought or currently threatened

against the Company or its Subsidiaries regarding the Intellectual Property

rights of or the use of any Intellectual Property by the Company or its

Subsidiaries of any third party that, if the subject of an unfavorable decision,

ruling or finding would have a Material Adverse Effect.

 

(j)    Insurance.  The Company and each of its Subsidiaries have paid all premiums

due under the insurance policies maintained by them and such policies are in

full force and effect.

 

(k)   Regulatory

Permits.  The Company and its

Subsidiaries possess all material certificates, authorizations and permits

issued by the appropriate federal, state, local or foreign regulatory

authorities necessary to conduct their respective businesses as currently

conducted (the “Permits”), and neither the Company nor any such Subsidiary has

received any written notice of proceedings relating to the revocation or

modification of any such Permit.

 

(l)    Tax Status. 

The Company and each of its Subsidiaries (i) has made or filed all

federal and state income and all other tax returns, reports and declarations

required by any jurisdiction to which it is subject, (ii) has paid all taxes

and other governmental assessments and charges due with respect to the periods

covered by such returns, reports and declarations, except those being contested

in good faith and for which the Company has made appropriate reserves on its

books, and (iii) has paid or set aside on its books provisions reasonably

adequate for the payment of all taxes for periods subsequent to the periods to

which such returns, reports or declarations (referred to in clause (i) above)

apply.  There are no unpaid taxes that

are individually or in the aggregate material in amount claimed to be due by

the taxing authority of any jurisdiction.

 

(m)  Application of Takeover Protections.  The Company and its board of directors have

taken all necessary action, if any, in order to render inapplicable any control

share acquisition, business combination, poison pill (including any distribution

under a rights agreement) or other similar anti-takeover provision under the

Articles of Incorporation, the laws of the state of its incorporation or the

laws of any other state which is or could become applicable to the Buyers as a

result of the transactions contemplated by this Agreement, including, without

limitation, the Company’s issuance of the Securities and the Buyers’ ownership

of the Securities.

 

 

11

 

(n)   Foreign

Corrupt Practices.  Neither the

Company nor any of its Subsidiaries, nor, to the Company’s knowledge, any

director, officer, agent, employee or other person acting on behalf of the

Company or any Subsidiary has, in the course of his actions for, or on behalf

of, the Company or any Subsidiary used any corporate funds for any unlawful

contribution, gift, entertainment or other unlawful expenses relating to

political activity; made any direct or indirect unlawful payment to any foreign

or domestic government official or employee from corporate funds; violated or

is in violation of any provision of the United States Foreign Corrupt Practices

Act of 1977, as amended; or made any bribe, rebate, payoff, influence payment,

kickback or other unlawful payment to any foreign or domestic government

official or employee.

 

(o)   Transactions With Affiliates.  Except as set forth on Schedule 3(o), the

fees payable to Credit Suite First Boston pursuant to Section 3(p) or as

disclosed in the SEC Documents, and other than the grant of stock options

granted pursuant to the Company’s employee benefit plans or director stock

option plans, none of the officers, directors or employees of the Company is

presently a party to any transaction with the Company or any of its

Subsidiaries (other than in connection with the provision of services as

employees, officers and directors), including any contract, agreement or other

arrangement providing for the furnishing of services to or by, providing for

rental of real or personal property to or from, or otherwise requiring payments

to or from any such officer, director or employee or, to the knowledge of the

Company, any corporation, partnership, trust or other entity in which any such

officer, director, or employee has a substantial interest or is an officer,

director, trustee or partner, such that the transaction would be required to be

disclosed pursuant to Item 404 of Regulation S-K promulgated under the

Securities Act.

 

(p)   Brokers

and Finders.  Except for fees

payable to Robertson as placement agent and to Credit Suisse First Boston

Corporation, no brokers, finders or financial advisory fees or commissions will

be payable by the Company with respect to the transactions contemplated by this

Agreement.

 

(q)   Absence of Certain Changes.  Except as disclosed in the SEC Documents

available on the EDGAR system, since November 14, 2001, there has been no

change or development that has had or could reasonably be expected to have,

either individually or in the aggregate, a Material Adverse Effect.

 

(r)    No

Material Non-Public Information. 

Except for the issuance of the Securities and the transactions

contemplated by this Agreement, the Company has not provided the Buyers with

material non-public information.

 

SECTION 4.  Covenants.

 

(a)   Obligations.

Each party shall timely satisfy each of the conditions to be satisfied by it as

provided in Sections 6 and 7 of this Agreement.

 

(b)   Form D and Blue Sky. The Company agrees to

file timely a Form D with the Commission with respect to the Securities as

required under Regulation D and to provide a copy thereof to each Buyer

promptly after such filing. The Company shall, on or before the Closing Date,

take such action as the Company shall reasonably determine is necessary in

order to obtain an exemption for, or to qualify the Securities for, sale to the

Buyers at the Closing pursuant to this Agreement under applicable securities or

“Blue Sky” laws of the states of the United States (or to obtain an exemption

from such qualification), and shall provide evidence of any such 

 

12

 

action so taken to the Buyers on or prior to the

Closing Date. The Company shall make all timely filings and reports relating to

the offer and sale of the Securities required under applicable securities or

“Blue Sky” laws of the states of the United States following the Closing Date.

 

(c)   Reporting

Status. With a view to making available to the Investors (as that term is

defined in the Registration Rights Agreement) the benefits of Rule 144

promulgated under the Securities Act or any similar rule or regulation of the

Commission that may at any time permit the Investors to sell securities of the

Company to the public without registration (“Rule 144”), the Company shall: (i)

make and keep public information available, as those terms are understood and

defined in Rule 144; (2) 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 (3) furnish to each Investor, so long as such Investor

owns Registrable Securities (as that term is defined in the Registration Rights

Agreement) (the “Reporting Period”), promptly upon request, (A) a written

statement by the Company, if true, that it has complied with the applicable

reporting requirements of Rule 144, the Securities Act and the Exchange Act and

(B) such other information as may be reasonably requested to permit the

Investors to sell such securities pursuant to Rule 144 without registration

under the Securities Act.

 

(d)   Use of Proceeds.  The Company intends to use the net proceeds from the sale of the

Series A Preferred and the Warrants for working capital and general corporate

purposes, which may include capital expenditures, reduction of indebtedness and

potential acquisitions.

 

(e)   Reservation

of Shares. The Company shall take all action necessary to at all times have

authorized, and reserved for the purpose of issuance, a number of shares of

Common Stock (the “Reservation Amount”) no less than (i) one hundred ten

percent (110%) of the number of shares of Common Stock needed to provide for

the issuance of the Conversion Shares upon conversion of all of the Series A

Preferred without regard to any limitations on conversions or exercise and the

issuance of four (4) quarterly dividend payments on the Series A Preferred

assuming the Market Value (as defined in the Certificate Amendment) of the

Common Stock is $5.85 and (ii) one hundred percent (100%) of the number of

shares of Common Stock needed to provide for the issuance of the Warrant Shares

upon exercise of all Warrants.

 

(f)    Listing.

The Company shall promptly use its best efforts to secure the listing of all of

the Conversion Shares and Warrant Shares upon each national securities exchange

and automated quotation system, if any, upon which shares of Common Stock are

then listed (subject to official notice of issuance) and, shall maintain, so

long as any other shares of Common Stock shall be so listed, such listing of

all Conversion Shares and Warrant Shares from time to time issuable under the

terms of the Transaction Documents. So long as any Securities are outstanding,

the Company shall maintain the Common Stock’s authorization for quotation or

listing on The New York Stock Exchange, Inc. (the “NYSE”), the American Stock

Exchange, Inc. (“AMEX”) or The Nasdaq National Market or SmallCap Market

(“NASDAQ”) (as applicable, the “Principal Market”). The Company shall pay all

fees and expenses in connection with satisfying its obligations under this

Section 4(f).

 

(g)   Filing of Form 8-K. On or before the third

Business Day following the Closing Date, the Company shall file a Current

Report on Form 8-K with the Commission describing the terms of the transactions

contemplated by the Transaction Documents and including as exhibits to such 

 

13

 

Current Report on Form 8-K (i) this Agreement, (ii)

the form of Warrants and (iii) the Registration Rights Agreement, each in the

form required by the Exchange Act. “Business Day” means any day other than

Saturday, Sunday or other day on which commercial banks in the City of New York

are required by law to remain closed

 

(h)   Stockholder

Approval of  Securities Issued to CSFB

Entities.  As soon as possible after

the date hereof, but in no event later than May 15, 2002, the Company shall

convene a meeting of shareholders for the purpose of obtaining shareholder

approval required by the applicable policies, rules or regulations of the NYSE

(the “NYSE Approval”), of (i) the issuance of Securities to DLJ Merchant

Banking Partners, L.P., DLJ International Partners C.V., DLJ Offshore Partners,

C.V. and Donaldson, Lufkin & Jenrette Securities Corporation (collectively,

the “CSFB Entities”) pursuant to this Agreement in the amounts set forth on Exhibit

A and (ii) the potential issuance of a number of Conversion Shares and

Warrant Shares greater in the aggregate than 19.99% of the number of shares of

Common Stock outstanding immediately prior to the Closing Date.  The Company agrees to use its best efforts

to obtain such votes as may be required for the NYSE Approval, including

recommending to the stockholders to vote in favor of the NYSE Approval, and

shall vote all shares for which the Company holds proxies (unless otherwise

directed by the stockholders submitting such proxy), or is otherwise entitled

to vote, in favor of the NYSE Approval. 

The CSFB Entities shall vote, or shall submit to the Company their proxy

to vote, all shares of Common Stock (other than shares of Common Stock that are

also Securities) held by them in favor of the NYSE Approval.  The Company shall bear all expenses in

connection with the holding of such meeting, including the costs and expenses

of the preparation, filing and distribution of the proxy statement.  The Company shall provide the CSFB Entities

and their counsel a reasonable opportunity to review and comment upon the proxy

statement relating to the NYSE Approval prior to the filing of such proxy

statement with the SEC.  Each of the

Buyers agrees not to vote any Securities held by it in favor of or against the

NYSE proposal and not to give any proxies to vote any of the Securities with

respect to the NYSE Approval.

 

(i)    Expenses. Subject to Section 9(o) of this

Agreement, at the Closing, the Company shall reimburse the Buyers for the

Buyers’ reasonable out-of-pocket expenses incurred in connection with the

consummation of the transactions contemplated by this Agreement, up to a

maximum of $50,000 in the aggregate, which amount shall be paid by the Company

to the Buyers concurrently with the Company’s receipt of the Purchase Price at

the Closing.

 

(j)    Additional Securities. For so long as any

Buyer beneficially owns any Securities, the Company will not issue any Series A

Preferred or Warrants other than to the Buyers as contemplated hereby;

provided, however, that the Company may, upon receipt of written notice from

Robertson of its election to exercise the Over-Allotment Option, issue up to an

additional 200,000 shares of Series A Preferred (collectively, the “Additional

Series A Preferred”) and Warrants to purchase 388,502 Warrant Shares

(collectively, the “Additional Warrants” and, together with the Additional

Series A Preferred, the “Additional Securities”) within sixty (60) days after

the Closing Date on identical terms and conditions as those set forth in the

Transaction Documents. The parties hereto agree to amend the Transaction

Documents as is reasonably necessary to provide solely for the issuance of the

Additional Securities.

 

14

 

(k)   Violation of Laws. 

The business of the Company and its Subsidiaries shall not be

conducted in violation of any law, ordinance or regulation of any governmental

entity, except where such violations would not result, either individually or

in the aggregate, in a Material Adverse Effect.    .

 

(l)    CUSIP

Numbers. The Company in issuing the Securities shall use “CUSIP” numbers

(if then generally in use), and shall use such “CUSIP” numbers in notices to

holders as a convenience to holders thereof; provided that any such notice may

state that no representation is made as to the correctness of such numbers

either as printed on the Securities or as contained in any notice to such

holders and that reliance may be placed only on other identification numbers

printed on such Securities, and any such Company action referenced in such

notice (including, without limitation, redemption or automatic conversion of

Series A Preferred) shall not be affected by any defect in or omission of such

numbers.

 

(m)  Agreements

of the CSFB Entities.

 

(i)            Each

of the CSFB Entities agrees that it will not convert any Series A Preferred

into shares of Common Stock or exercise any Warrants for shares of Common Stock

prior to the date the NYSE Approval is obtained. Each of the CSFB Entities also

agrees that it will not, during the period commencing on the date hereof and

ending on the date that is six months from the Closing Date (the “Lock-Up

Period”), (x) offer, pledge, sell, contract to sell, sell any option or

contract to purchase, purchase any option or contract to sell, grant any

option, right or warrant to purchase, lend, or otherwise transfer or dispose

of, directly or indirectly, any shares of Common Stock or any securities

convertible into or exercisable or exchangeable for Common Stock, or (y) enter into

any swap or other arrangement that transfers to another, in whole or in part,

any of the economic consequences of ownership of the Common Stock, whether any

such transaction described in clause (x) or (y) above is to be settled by

delivery of Common Stock or such other securities, in cash or otherwise. Each

of the CSFB Entities further agrees that it will not make any demand for or

exercise any right with respect to, the registration of any shares of Common

Stock or any security convertible into or exercisable or exchangeable for

Common Stock during the period referred to in the preceding sentence.  Notwithstanding the foregoing, if the

Company proposes to register any of its securities under the Securities Act in

an underwritten offering during the Lock-Up Period, the Company shall give

notice to each of the CSFB Entities  of

its intention to effect such a registration prior to the filing with the

Commission of such registration statement in accordance with the terms of the

Original Stockholders Agreement.  Upon

written request from any of the CSFB Entities, the Company shall use its best

efforts to cause the number of Conversion Shares and Warrant Shares held by

such CSFB Entity and referred to in such request to be included in such

registration statement in accordance with the terms of the Original

Stockholders Agreement.

 

(ii)           Each

of the CSFB Entities agrees to vote any voting securities of the Company with

respect to which it has voting power in favor of the NYSE Approval (other than

the Securities).

 

(iii)          Each

of the CSFB Entities agrees that the resale of the Conversion Shares and

Warrant Shares underlying the Series A Preferred and Warrants it purchases

pursuant to this Agreement, or any shares of capital stock issued in respect of

such Conversion Shares, 

 

15

 

Warrant Shares, Series A Preferred or Warrants, shall

not be registered pursuant to the shelf registration statement to be filed by

the Company in accordance with the Registration Rights Agreement.

 

(n)           Amendment

or Supplement to Confidential Private Placement Memorandum.  If, at any time prior to the Closing Date,

any event with respect to the Company shall occur which is required to be

described in the Confidential Private Placement, such event shall be so

described, and an appropriate amendment or supplement shall be prepared by the

Company.

 

(o)           Action

to Eliminate Conflicts. On or before the date on which a dividend, Optional

Make Whole Payment or Make Whole Payment is due and payable pursuant to the

Certificate Amendment, the Company shall have taken such action so that the

payment will not conflict with, or constitute a default (or an event which with

notice or lapse of time or both would become a default) under, or give to

others any rights of termination, amendment, acceleration or cancellation of,

any agreement, indenture or instrument to which the Company or any of its

Subsidiaries is a party, except for such conflicts, defaults, terminations,

amendments, accelerations, cancellations and violations as would not,

individually or in the aggregate, have a Material Adverse Effect.

 

SECTION 5.  Transfer Agent

InstructionsError!

Bookmark not defined.. 

The Company shall issue irrevocable instructions to its transfer

agents, and any subsequent transfer agent, to issue certificates or credit

shares to the applicable balance accounts at the Depositary Trust Company

(“DTC”), registered in the name of Robertson and each Buyer or their respective

nominee(s), for the Conversion Shares and Warrant Shares in such amounts as

specified from time to time by Robertson or a Buyer to the Company upon

conversion of the Series A Preferred or exercise of the Warrants, as applicable

and in accordance with their respective terms (the “Irrevocable Transfer Agent

Instructions”), substantially in the form attached hereto as Exhibit F.

Prior to transfer or sale pursuant to a registration statement or Rule 144

under the Securities Act of the Conversion Shares and the Warrant Shares, all

such certificates shall bear the restrictive legend specified in Section 2(g)

of this Agreement. The Company represents and warrants that no instruction

inconsistent with the Irrevocable Transfer Agent Instructions referred to in

this Section 5 will be given by the Company to its transfer agent and that the

Securities shall be freely transferable on the books and records of the Company

as and to the extent provided in this Agreement, the Warrants and the

Registration Rights Agreement, except as may be required by law. If a Buyer provides

the Company with an opinion of counsel, in form reasonably acceptable to the

Company, to the effect that a public sale, assignment or transfer of Securities

has been made without registration under the Securities Act or that the

Securities can be sold pursuant to Rule 144(k), the Company shall permit the

transfer, and, in the case of the Conversion Shares and the Warrant Shares,

promptly instruct its transfer agent to issue one or more certificates, or

credit shares to one or more balance accounts at DTC, in such name and in such

denominations as specified by such Buyer and without any restrictive legend.

The Company acknowledges that a breach by it of its obligations hereunder will

cause irreparable harm to the Buyers by vitiating the intent and purpose of the

transaction contemplated hereby. Accordingly, the Company acknowledges that the

remedy at law for a breach of its obligations under this Section 5 will be

inadequate and agrees, in the event of a breach or threatened breach by the

Company of the provisions of this Section 5, that the Buyers shall be entitled,

in addition to all other available remedies, to an order and/or injunction

restraining any breach and requiring immediate issuance 

 

16

 

and transfer, without the necessity of showing economic

loss and without any bond or other security being required.

 

SECTION 6.         Conditions to the

Company’s Obligation to Close. 

The obligation of the Company to issue and sell the Series A Preferred

and the Warrants to each respective Buyer at the Closing is subject to the

satisfaction, at or before the Closing Date, of each of the following

conditions with respect to such Buyer, 

provided that these conditions are for the Company’s sole benefit and

may be waived by the Company at any time in its sole discretion by providing

such Buyer with prior written notice thereof:

 

(a)   Transaction

Documents.  Such Buyer shall have

executed each of the Transaction Documents to which it is a party and delivered

the same to the Company.

 

(b)   Payment

of Purchase Price. Such Buyer shall have delivered to the Company the

purchase price for the Series A Preferred and the Warrants being purchased by

such Buyer at the Closing, by wire transfer of immediately available funds pursuant

to the wire instructions attached hereto as Schedule A.

 

(c)   Representations

and Warranties; Covenants. The representations and warranties of such Buyer

shall be true, correct and complete in all material respects (except to the

extent that any of such representations and warranties is already qualified as

to materiality in Section 2 above, in which case such representations and

warranties shall be true, correct and complete without further qualification)

as of the date when made and as of the Closing Date as though made at that time

(except for representations and warranties that speak as of a specific date

(which shall be true, correct and complete as of such date)), and such Buyer

shall have performed, satisfied and complied with in all material respects the

covenants, agreements and conditions required by the Transaction Documents to

be performed, satisfied or complied with by such Buyer at or prior to the

Closing Date.

 

SECTION 7.         Conditions to Each

Buyer’s Obligation to Purchase. 

The obligation of each Buyer hereunder to purchase the Series A

Preferred and the Warrants set forth opposite such Buyer’s name on Exhibit A

attached hereto from the Company at the Closing is subject to the satisfaction,

at or before the Closing Date, of each of the following conditions, provided

that these conditions are for each Buyer’s sole benefit and may be waived by

such Buyer at any time in its sole discretion by providing the Company with

prior written notice thereof:

 

(a)   Transaction Documents. The Company shall

have executed each of the Transaction Documents and delivered the same to such

Buyer.

 

(b)   No

Delisting of Common Stock. The Common Stock (i) shall be designated for

quotation or listed on the Principal Market and (ii) shall not have been

suspended by the Commission or the Principal Market from trading on the

Principal Market nor shall suspension by the Commission or the Principal Market

have been threatened either (A) in writing by the Commission or the Principal

Market or (B) by falling below the minimum listing maintenance requirements of

the Principal Market.

 

(c)   Representations

and Warranties; Covenants.  The

representations and warranties of the Company shall be true, correct and

complete in all material respects (except to the extent that 

 

17

 

any of such representations and warranties is already

qualified as to materiality in Section 3 of this Agreement, in which case such

representations and warranties shall be true, correct and complete without

further qualification) as of the date when made and as of the Closing Date as

though made at that time (except for representations and warranties that speak

as of a specific date (which shall be true, correct and complete as of such

date)) and the Company shall have performed, satisfied and complied with in all

material respects the covenants, agreements and conditions required by the

Transaction Documents to be performed, satisfied or complied with by the

Company at or prior to the Closing Date. Such Buyer shall have received a

certificate, executed by the Chief Executive Officer of the Company, dated as

of the Closing Date, to the foregoing effect.

 

(d)   Opinion

of Counsel. The Company shall have delivered to such Buyer the opinion of

Hale and Dorr LLP, dated as of the Closing Date, in the form of Exhibit G,

attached hereto.

 

(e)   Delivery

of Series A Preferred and Warrants. The Company shall have executed and

delivered to such Buyer certificates for the Series A Preferred and the

Warrants (in such denominations as such Buyer shall reasonably request) being

purchased by such Buyer at the Closing.

 

(f)    Reservation

of Common Stock. As of the Closing Date, the Company shall have reserved

out of its authorized and unissued Common Stock, the number of shares of Common

Stock equal to the Reservation Amount.

 

(g)   Irrevocable

Transfer Agent Instructions. The Company shall have delivered the

Irrevocable Transfer Agent Instructions, in the form of Exhibit F

attached hereto, to the Company’s transfer agent.

 

(h)   Good Standing

Certificates. The Company shall have delivered to such Buyer (i) a

certificate evidencing the incorporation and good standing of the Company in

Delaware issued by the Secretary of State of Delaware as of a recent date; and

(ii) a certificate of good standing (or appropriate counterpart) from the

appropriate governmental authority in each domestic jurisdictions in which

Subsidiaries are incorporated or organized as of a recent date.

 

(i)    Secretary’s

Certificate. The Company shall have delivered to such Buyer a secretary’s

certificate, dated as of the Closing Date, certifying as to (i) adoption

of the form of resolutions of the Board of Directors of the Company consistent

with Section 3(b) of this Agreement and in a form reasonably acceptable to such

Buyer, (ii) the Articles of Incorporation and (iii) the Bylaws, each as in

effect at the Closing.

 

(j)    Filings;

Authorizations. The Company shall have made all filings under all

applicable federal and state securities laws necessary to consummate the

issuance of the Securities pursuant to this Agreement in compliance with such

laws, and shall have obtained all authorizations, approvals and permits

necessary to consummate the transactions contemplated by the Transaction

Documents and such authorizations, approvals and permits shall be effective as

of the Closing Date.

 

(k)   No

Injunctions.  No temporary

restraining order, preliminary or permanent injunction or other order or

decree, and no other legal restraint or prohibition shall exist which prevents

or 

 

18

 

arguably prevents the consummation of the transactions

contemplated by the Transaction Documents, nor shall any proceeding have been

commenced or threatened with respect to the foregoing.

 

(l)    No

Material Adverse Effect.  Between

the time of execution of this Agreement and the Closing Date, (i) no Material

Adverse Effect shall occur or become known (whether or not arising in the

ordinary course of business) and (ii) no transaction which is material and

unfavorable to the Company shall have been entered into by the Company.

 

(m)  Payment

of Fees. The Company shall have satisfied its obligations under Section

9(p) of this Agreement.

 

SECTION 8.         Indemnification.

 

(a)   Indemnification

by the Company.  In consideration of

each Buyer’s execution and delivery of the Transaction Documents and acquiring

the Securities thereunder and Robertson’s agreement to act as exclusive

placement agent and in addition to all of the Company’s other obligations under

the Transaction Documents, the Company shall defend, protect, indemnify and

hold harmless Robertson and each Buyer and each other holder of the Securities

and all of their shareholders, partners, members, officers, directors,

employees and direct or indirect investors and any of the foregoing persons’

agents or other representatives (including, without limitation, those retained

in connection with the transactions contemplated by this Agreement)

(collectively, the “Indemnitees”) from and against any and all actions, causes

of action, suits, claims, losses, costs, penalties, fees, liabilities and

damages, and expenses in connection therewith (irrespective of whether any such

Indemnitee is a party to the action for which indemnification hereunder is

sought), and including reasonable attorneys’ fees and disbursements

(collectively, “Claims”), incurred by any Indemnitee as a result of, or arising

out of, or relating to (a) any misrepresentation or breach of any

representation or warranty made by the Company in the Transaction Documents,

(b) any breach of any covenant, agreement or obligation of the Company

contained in the Transaction Documents, (c) any cause of action, suit or claim

brought or made against such Indemnitee and arising out of or resulting from

(i) the execution, delivery, performance or enforcement of the Transaction

Documents or any other certificate, instrument or document contemplated hereby

or thereby, (ii) any transaction financed or to be financed in whole or in

part, directly or indirectly, with the proceeds of the issuance of the

Securities or (iii) the status of such Buyer or holder of the Securities

as an investor in the Company. To the extent that the foregoing undertaking by

the Company may be unenforceable for any reason, the Company shall make the maximum

contribution to the payment and satisfaction of each of the Indemnified

Liabilities which is permissible under applicable law. Subject to Section 8(b)

of this Agreement, the Company shall reimburse the Indemnitees, promptly as

such expenses are incurred and are due and payable, for any legal fees or other

reasonable expenses incurred by them in connection with the investigating or

defending any such Claim.

 

(b)   Procedures

for Indemnification.  Promptly after

an Indemnitee has knowledge of any Claim as to which such Indemnitee reasonably

believes indemnity may be sought or promptly after such Indemnitee receives

notice of the commencement of any action or proceeding (including any

governmental action or proceeding) involving a Claim, such Indemnitee shall, if

a Claim in respect thereof is to be made against any the Company under this 

 

19

 

Section 8, deliver to the Company a written notice of such

Claim, and the Company shall have the right to participate in, and, to the

extent the Company so desires, to assume control of the defense thereof with

counsel mutually satisfactory to the Company and the Indemnitee; provided,

however, that an Indemnitee shall have the right to retain its own counsel if,

in the reasonable opinion of counsel retained by the Company, the

representation by such counsel of the Indemnitee and the Company would be

inappropriate due to actual or potential differing interests between such

Indemnitee and the Company; provided, further, that the Company shall not be

responsible for the reasonable fees and expense of more than one (1) separate

legal counsel for such Indemnitee.  In

the case of an Indemnitee, the legal counsel referred to in the immediately preceding

sentence shall be selected by the Buyers holding at least a majority in

interest of the Securities to which the Claim relates.  The Indemnitee shall cooperate fully with

the Company in connection with any negotiation or defense of any such action or

Claim by the Company and shall furnish to the Company all information

reasonably available to the Indemnitee which relates to such action or

Claim.  The Company shall keep the

Indemnitee fully apprised at all times as to the status of the defense or any settlement

negotiations with respect thereto.  The

Company shall not be liable for any settlement of any Claim effected without

its prior written consent; provided, however, that the Company shall not

unreasonably withhold, delay or condition its consent.  The Company shall not, without the prior

written consent of the Indemnitee, consent to entry of any judgment or enter

into any settlement or other compromise which does not include as an

unconditional term thereof the giving by the claimant or plaintiff to such

Indemnitee of a full release from all liability in respect to such Claim and

action and proceeding.  After

indemnification as provided for under this Agreement, the rights of the Company

shall be subrogated to all rights of the Indemnitee with respect to all third

parties, firms or corporations relating to the matter for which indemnification

has been made.  The failure to deliver

written notice to the Company as provided in this Agreement shall not relieve

the Company of any liability to the Indemnitee under this Section 8, except to

the extent that the Company is prejudiced in its ability to defend such action.

 

(c)   Survival

of Indemnification Obligations. The obligations of the Company under this

Section 8 shall survive the transfer of the Securities by the Indemnitees.

 

SECTION 9.  Miscellaneous.

 

(a)   Governing

Law; Jurisdiction; Jury Trial. All questions concerning the construction,

validity, enforcement and interpretation of this Agreement shall be governed by

the internal laws of the State of New York, without giving effect to any choice

of law or conflict of law provision or rule (whether of the State of New York

or any other jurisdictions) that would cause the application of the laws of any

jurisdictions other than the State of New York.  Each party hereby irrevocably submits to the non-exclusive

jurisdiction of the state and federal courts sitting in the City of New York,

borough of Manhattan, for the adjudication of any dispute hereunder or in

connection herewith or with any transaction contemplated hereby or discussed

herein, and hereby irrevocably waives, and agrees not to assert in any suit,

action or proceeding, any claim that it is not personally subject to the

jurisdiction of any such court, that such suit, action or proceeding is brought

in an inconvenient forum or that the venue of such suit, action or proceeding

is improper.  Each party hereby

irrevocably waives personal service of process and consents to process being

served in any such suit, action or proceeding by mailing a copy thereof to such

party at the address for such notices to it under this Agreement and agrees

that such 

 

20

 

service shall constitute good and sufficient service

of process and notice thereof.  Nothing

contained herein shall be deemed to limit in any way any right to serve process

in any manner permitted by law.  If any

provision of this Agreement shall be invalid or unenforceable in any

jurisdiction, such invalidity or unenforceability shall not affect the validity

or enforceability of the remainder of this Agreement in that jurisdiction or

the validity or enforceability of any provision of this Agreement in any other

jurisdiction.  EACH PARTY HEREBY

IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY

TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH

OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(b)   Counterparts.  This Agreement may be executed in identical

counterparts, each of which shall be deemed an original but all of which shall

constitute one and the same agreement. This Agreement, once executed by a

party, may be delivered to the other parties hereto by facsimile transmission

of a copy of this Agreement bearing the signature of the party so delivering

this Agreement.

 

(c)   Headings.

The headings of this Agreement are for convenience of reference only and shall

not limit or otherwise affect the meaning hereof.

 

(d)   Entire

Agreement.  This Agreement, the

Registration Rights Agreement, the Certificate Amendment and the Warrants and

the documents referenced herein and therein constitute the entire agreement

among the parties hereto with respect to the subject matter hereof and

thereof.  There are no restrictions,

promises, warranties or undertakings, other than those set forth or referred to

herein and therein.  This Agreement, the

Registration Rights Agreement, the Certificate Amendment and the Warrants

supersede all prior agreements and understandings among the parties hereto with

respect to the subject matter hereof and thereof.

 

(e)   Consents.

All consents and other determinations required to be made by Buyers pursuant to

this Agreement shall be made, unless otherwise specified in this Agreement, by

Buyers holding at least a majority of the Series A Preferred held by Buyers then

outstanding.

 

(f)    Waivers.  No provision of this Agreement may be

amended or waived other than by an instrument in writing signed by the Company

and by Investors holding at least a majority of the Series A Preferred held by

Buyers then outstanding. No such amendment shall be effective to the extent

that it applies to less than all of the holders of the Series A Preferred then

outstanding. No consideration shall be offered or paid to any person to amend

or consent to a waiver or modification of any provision of any of the

Transaction Documents unless the same consideration also is offered to all of

the parties to the Transaction Documents or holders of the Conversion Shares,

as the case may be.

 

(g)   Notices.

Any notices, consents, waivers or other communications required or permitted to

be given under the terms of this Agreement must be in writing and will be

deemed to have been delivered: (i) upon receipt, when delivered personally;

(ii) upon receipt, when sent by facsimile; or (iii) one (1) Business Day after

deposit with a nationally recognized overnight delivery service, in each case

properly addressed to the party to receive the same. The addresses and

facsimile numbers for such communications shall be:

 

21

 

If to the Company:

 

Manufacturers’ Services

Limited

300 Baker Avenue, Suite

106

Concord, Massachusetts

01742

Telephone:                                    (978) 287-5630

Facsimile:                                            (978) 287-5635

Attention:                                         Chief Executive Officer

                                                                                                and General Counsel

 

with a copy to:

 

Hale and Dorr LLP

60

State Street

Boston,

Massachusetts 02109

Telephone:                                    (617) 526-6000

Facsimile:                                            (617) 526-5000

Attention:                                         John A. Burgess, Esq.

 

If to Robertson Stephens:

 

Robertson Stephens, Inc.

555 California Street

Suite 2600

San Francisco,

California  94101

Telephone:                                    (415) 676-2886

Facsimile:                                            (415) 982-2488

Attention:                                         Mr. James Anderson

                                                                                                Mr. Matt Seedorf

                                                                                                Mr. David Fullerton

 

with a copy to:

 

Gibson, Dunn &

Crutcher LLP

1050 Connecticut Avenue

NW

Washington, DC 20036

Telephone:                                    (202) 955-8500

Facsimile:                                            (202) 467-0539

Attention:                                         Brian Lane, Esq.

 

22

 

If to Legal Counsel:

 

Gibson, Dunn &

Crutcher LLP

1050 Connecticut Avenue

NW

Washington, DC 20036

Telephone:  (202) 955-8500

Facsimile:  (202) 467-0539

Attention:  Brian Lane, Esq.

 

If to a Buyer, to its address and facsimile number set

forth on the Schedule of Buyers attached hereto as Exhibit A, with

copies to such Buyer’s representatives as set forth on the Schedule of Buyers,

or at such other address and/or facsimile number and/or to the attention of

such other person as the recipient party has specified by written notice given

to each other party five (5) days prior to the effectiveness of such change.

Written confirmation of receipt (A) given by the recipient of such notice,

consent, waiver or other communication, (B) mechanically or electronically

generated by the sender’s facsimile machine containing the time, date,

recipient facsimile number and an image of the first page of such transmission,

or (C) provided by a courier or overnight courier service shall be rebuttal

evidence of personal service, receipt by facsimile or receipt from a nationally

recognized overnight delivery service in accordance with clause (i), (ii) or

(iii) above, respectively.

 

(h)   No Strict

Construction. The language used in this Agreement will be deemed to be the

language chosen by the parties to express their mutual intent, and no rules of

strict construction will be applied against any party.

 

(i)    Further

Assurances. Each party shall do and perform, or cause to be done and

performed, all such further acts and things, and shall execute and deliver all

such other agreements, certificates, instruments and documents, as the other

party may reasonably request in order to carry out the intent and accomplish

the purposes of this Agreement and the consummation of the transactions

contemplated hereby.

 

(j)    Third-Party

Beneficiaries. This Agreement is intended for the benefit of the parties

hereto and their respective permitted successors and assigns, and is not for

the benefit of, nor may any provision hereof be enforced by, any other person

other than Robertson.

 

(k)   Severability.

If any provision of this Agreement shall be invalid or unenforceable in any

jurisdiction, such invalidity or unenforceability shall not affect the validity

or enforceability of the remainder of this Agreement in that jurisdiction or

the validity or enforceability of any provision of this Agreement in any other

jurisdiction.

 

(l)    Successors

and Assigns. This Agreement shall be binding upon and inure to the benefit

of the parties and their respective successors and assigns, including any

purchasers of the Securities. The Company shall not assign this Agreement or

any rights or obligations hereunder without the prior written consent of the

holders of at least a majority of the Conversion Shares and Warrant Shares,

determined as if all of the Series A Preferred held by Buyers then outstanding

have been converted into Conversion Shares and all Warrants then outstanding

have been exercised for Warrant Shares without regard to any limitations on

conversion of the Series 

 

23

 

A Preferred or on the exercise of the Warrants. A

Buyer may assign some or all of its rights and obligations hereunder without

the consent of the Company; provided, however, that the transferee has agreed

in writing to be bound by the applicable provisions of this Agreement and

provided, further, that such assignment shall be in connection with a transfer

of all or a portion of the Series A Preferred and Warrants held by such Buyer

and subject to the terms and conditions of the Series A Preferred and Warrants,

as applicable.

 

(m)  Survival.

Unless this Agreement is terminated under Section 9(o) of this Agreement, the

representations and warranties of the Company and the Buyers contained in

Sections 2 and 3 of this Agreement, and the indemnification provisions set

forth in Section 8 of this Agreement, the agreements and covenants set forth in

Sections 4, 5 and 9 of this Agreement shall survive until such time as no

Series A Preferred, Conversion Shares, Warrants or Warrant Shares remain

outstanding. Each Buyer shall be responsible only for its own representations,

warranties, agreements and covenants hereunder.

 

(n)   Publicity.

The Company and Robertson shall have the right to approve before issuance any

press releases or any other public statements with respect to the transactions

contemplated by the Transaction Documents. 

Robertson has the right to describe its services to the Company in

connection with the Offering and to reproduce the Company’s name and logo in

Robertson’s advertisements, marketing materials and equity research reports, if

any, in the form previously approved by the Company and subject to the prior approval

of the Company, which shall not be unreasonably withheld, such additional uses

as Robertson may from time to time request.

 

(o)   Termination.

In the event that the Closing shall not have occurred with respect to a Buyer

on or before five (5) Business Days from the date hereof due to the Company’s

or such Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7

of this Agreement (and the nonbreaching party’s failure to waive such

unsatisfied conditions), the nonbreaching party shall have the option to

terminate this Agreement with respect to such breaching party at the close of

business on such date without liability of any party to any other party;

provided, however, that if this Agreement is terminated pursuant to this

Section 9(o), the Company shall remain obligated to reimburse any nonbreaching

Buyer for the expenses described in Section 4(i) of this Agreement.

 

(p)   Placement

Agent. The Company acknowledges that it has engaged Robertson as placement

agent in connection with the sale of the Series A Preferred and the Warrants

and that the compensation of such agent is as set forth on the Schedule of Fees

attached hereto as Exhibit C. The Company shall be responsible for the

payment of any placement agent’s fees, financial advisory fees, or brokers’

commissions (other than for persons engaged by any Buyer or its investment

advisor) relating to or arising out of the transactions contemplated hereby.

The Company shall pay, and hold each Buyer harmless against, any liability,

loss or expense (including, without limitation, attorney’s fees and

out-of-pocket expenses) arising in connection with any such claim.

 

(q)   Remedies.

Each Buyer and each holder of the Securities shall have all rights and remedies

set forth in the Transaction Documents and all rights and remedies which such

holders have been granted at any time under any other agreement or contract and

all of the rights which 

 

24

 

such holders have under any law. Any person having any

rights under any provision of this Agreement shall be entitled to enforce such

rights to recover damages by reason of any breach of any provision of this

Agreement and to exercise all other rights granted by law. Furthermore, the

Company recognizes that in the event that it fails to perform, observe, or

discharge any or all of its obligations under this Agreement, any remedy at law

may prove to be inadequate relief to the Buyers. The Company therefore agrees

that the Buyers shall be entitled to seek temporary and permanent injunctive

relief in any such case without the necessity of proving actual damages and

without posting a bond or other security.

 

(r)    Payment

Set Aside. To the extent that the Company makes a payment or payments to

any Buyer hereunder or pursuant to any of the other Transaction Documents, or

the Buyers enforce or exercise their rights hereunder or thereunder, and such

payment or payments or the proceeds of such enforcement or exercise or any part

thereof are subsequently invalidated, declared to be fraudulent or

preferential, set aside, recovered from, disgorged by or are required to be

refunded, repaid or otherwise restored to the Company, a trustee, receiver or

any other person under any law (including, without limitation, any bankruptcy

law, state or federal law, common law or equitable cause of action), then to

the extent of any such restoration the obligation or part thereof originally

intended to be satisfied shall be revived and continued in full force and

effect as if such payment had not been made or such enforcement or setoff had

not occurred.

 

25

 

IN

WITNESS WHEREOF,

the parties have caused this Securities Purchase Agreement to be duly executed

as of the date first written above.

 

	

   

  	

  “COMPANY”

  
	

   

  	

   

  
	

   

  	

  MANUFACTURERS’ SERVICES LIMITED

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

  Albert A. Notini

  
	

   

  	

   

  	

  Name:

  	

  Albert A. Notini

  
	

   

  	

   

  	

  Title:

  	

  Chief Financial

  Officer and

  
	

   

  	

   

  	

   

  	

  Executive Vice

  President

  

 

ACKNOWLEDGED AND AGREED:

 

“ROBERTSON”

 

ROBERTSON STEPHENS, INC.

 

	

  By:

  	

  /s/ Daniel P. White III

  	 

	

   

  	

  Its:

  	

  Managing Director

  	

   

  
	

   

  	

   

  	

   

  	 

 

[Signatures

of Buyers on Following Page]

 

 

[SIGNATURE

PAGE TO SECURITIES PURCHASE AGREEMENT]

 

	

   

  	

  “BUYER”

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  (print full legal name of Buyer)

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  (signature of authorized

  representative)

  
	

   

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Its:GDC Draft 2/9/02

Exhibit

10.2

 

MANUFACTURERS’ SERVICES

LIMITED,  

 

as the Company

 

ROBERTSON STEPHENS, INC.,

as Robertson

 

and

 

BUYERS,

 

as defined herein

 

REGISTRATION RIGHTS

AGREEMENT

 

Dated as of March 12,

2002

 

5.25% Convertible

Preferred Stock

and Warrants to Purchase Common Stock

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT

(this “Agreement”), is entered into as of March 12, 2002, by and among

Manufacturers’ Services Limited, a Delaware corporation (the “Company”),

Robertson Stephens, Inc. (“Robertson”) and the buyers listed on the Schedule of

Buyers attached hereto as Exhibit A (each, a “Buyer” and, collectively,

the “Buyers”).

 

THE PARTIES TO THIS AGREEMENT

enter into this agreement on the basis of the following facts, intentions and

understanding:

 

A.            The Company and the

Buyers entered into that certain Securities Purchase Agreement of even date

herewith among the Company, the Buyers and DLJ Merchant Banking Partners, L.P.,

DLJ International Partners C.V., DLJ Offshore Partners, C.V. and Donaldson,

Lufkin & Jenrette Securities Corporation (the “Securities Purchase

Agreement”), and, upon the terms and subject to the conditions of the

Securities Purchase Agreement, the Company has agreed to issue and sell to the

Buyers (i) an aggregate of 830,000 shares, par value $.001 per share, of 5.25%

Series A Convertible Preferred Stock of the Company (the “Series A Preferred”),

which shall be convertible into shares of common stock, par value $.001 per

share (the “Common Stock”), of the Company (as converted, the “Conversion

Shares”), and (ii) Warrants (such Warrants, as the same may be amended,

modified or supplemented from time to time in accordance with the terms

thereof, the “Buyer Warrants”) to purchase 1,612,281 shares of Common Stock (as

exercised collectively, the “Buyer Warrant Shares”).

 

B.            The Company has further agreed (i)

to issue to Robertson Warrants (such Warrants, as the same may be amended,

modified or supplemented from time to time in accordance with the terms

thereof, the “Robertson Warrants” and, together with the Buyer Warrants, the

“Warrants”) to purchase (A) the number of shares of Common Stock set forth on

the Schedule of Fees attached as Exhibit C to the Securities Purchase Agreement

and (B) in the event that Robertson exercises the Over-Allotment Option (as

defined below), an additional number of shares of Common Stock set forth on the

Schedule of Fees (as exercised collectively, the “Robertson Warrant Shares”

and, together with the Buyer Warrant Shares, the “Warrant Shares”) and (ii) to

grant to Robertson an option, exercisable only with the consent of the Company

(the “Over-Allotment Option”), which may be exercised at any time and from time

to time within sixty (60) days after the Closing Date, to place or, at its

election, purchase and resell additional Series A Preferred and Warrants after

the Closing Date, so that the Offering is up to an aggregate of 200,000 shares

of Series A Preferred and Warrants to purchase 388,502 Warrant Shares.

 

C.            To induce the Buyers to

execute and deliver the Securities Purchase Agreement and to induce Robertson

to act as the Company’s exclusive placement agent, the Company has agreed to

provide certain registration rights to the Buyers and Robertson under the

Securities Act of 1933, as amended, and the rules and regulations thereunder,

or any similar successor statute (collectively, the “Securities Act”), and

applicable state securities laws.

 

NOW, THEREFORE, in

consideration of the promises and the mutual covenants contained herein and

other good and valuable consideration, the receipt and 

 

 

sufficiency

of which are hereby acknowledged, the Company, Robertson and each of the Buyers

hereby agree as follows:

 

SECTION 1.  Definitions.  As used in this Agreement, the following terms shall have the

following meanings:

 

(a)   “Business

Day” means any day other than Saturday, Sunday or any other day on which

commercial banks in The City of New York are required by law to remain closed.

 

(b)   “Investor”

means Robertson and each Buyer and any transferee or assignee thereof to whom

Robertson or a Buyer assigns its rights under this Agreement and who agrees to

become bound by the provisions of this Agreement in accordance with Section 9 of this Agreement, and any subsequent transferee or

assignee thereof to whom a transferee or assignee assigns its rights under this

Agreement and who agrees to become bound by the provisions of this Agreement in

accordance with Section 9 of this Agreement.

 

(c)   “Person”

means an individual, a limited liability company, a partnership, a joint

venture, a corporation, a trust, an unincorporated organization or association

and governmental or any department or agency thereof.

 

(d)   “register,”

“registered,” and “registration” means a registration effected by preparing and

filing one or more Registration Statements (as defined below) in compliance

with the Securities Act and pursuant to Rule 415 under the Securities Act or

any successor rule providing for offering securities on a continuous or delayed

basis (“Rule 415”), and the declaration or ordering of effectiveness of such

Registration Statements by the United States Securities and Exchange Commission

(the “Commission”).

 

(e)   “Registrable

Securities” means (i) the Conversion Shares issued or issuable upon conversion

of the Series A Preferred, (ii) the Warrant Shares issued or issuable upon

exercise of the Warrants, (iii) any shares of capital stock issued or issuable

with respect to the Conversion Shares, the Series A Preferred, the Warrant

Shares or the Warrants as a result of any stock split, stock dividend,

recapitalization, exchange or similar event or otherwise, or as required

pursuant to the Certificate Amendment, without regard to any limitations on

conversions of the Series A Preferred or the exercise of the Warrants, (iv) any

shares of capital stock of any entity issued in respect of the capital stock

referenced in the immediately preceding clauses (i), (ii) and (iii) as a result

of a merger, consolidation, sale of assets, sale or exchange of capital stock

or other similar transaction provided, that shares of Common Stock that are

Registrable Securities shall cease to be Registrable Securities upon (i) any

sale pursuant to a Registration Statement or Rule 144 under the Securities Act

or (ii) any sale or transfer to any person or entity which by virtue of Section

9 of this Agreement, is not entitled to the rights provided by this Agreement.

 

(f)    “Registration

Statement” means a registration statement or registration statements of the

Company filed under the Securities Act and covering all of the Registrable

Securities.

 

(g)   Capitalized

terms used herein and not otherwise defined herein shall have the respective

meanings set forth in the Securities Purchase Agreement.

 

2

 

SECTION 2.  Registration

 

(a)   Mandatory

Registration.  The Company shall use

its best efforts to prepare and, as soon as practicable but in no event later

than thirty (30) days after the Closing Date (as defined in the Securities

Purchase Agreement) (the “Filing Deadline”), file with the Commission a

Registration Statement on Form S-3 covering the resale of all of the

Registrable Securities.  In the event

that Form S-3 is unavailable for such a registration, the Company shall use such

other form as is available for such a registration, subject to the provisions

of Section 2(d) of this Agreement.  The

Registration Statement prepared pursuant hereto shall register for resale at

least 5,937,461 shares of Common Stock issuable upon conversion of the Series A

Preferred and exercise of the Warrants by the Investors from time to time in

accordance with the methods of distribution elected by such Investors. The

Company shall use reasonable efforts to have the Registration Statement

declared effective by the Commission as soon as practicable, but not later than

ninety (90) days after the Closing Date (the “Effectiveness Deadline”);

provided, however, that if the Commission reviews the Registration Statement

and requires the Company to make modifications thereto, then the Effectiveness

Deadline shall be extended to not later than one hundred twenty (120) days

after the Closing Date.  In the event

that, after the Closing Date and before the Registration Statement is declared

effective, the offices of the Commission are closed due to acts of God, war or

terror, the Effectiveness Deadline will be extended by a number of days equal

to the days of any such closure.

 

(b)   Allocation

of Registrable Securities. The initial number of Registrable Securities

included in any Registration Statement and each increase in the number of

Registrable Securities included therein shall be allocated pro rata among the

Investors based on the number of Registrable Securities held by each Investor

at the time the Registration Statement covering such initial number of

Registrable Securities or increase thereof is declared effective by the

Commission.  In the event that an

Investor sells or otherwise transfers any of such Investor’s Registrable

Securities, each transferee shall be allocated the portion of the then remaining

number of Registrable Securities included in such Registration Statement

allocable to the transferor.  In no

event shall the Company include any securities other than Registrable

Securities on any Registration Statement without the prior written consent of

the Investors holding at least a majority of the Registrable Securities.

 

(c)   Legal

Counsel.  Subject to Section 5 of

this Agreement, the Investors holding at least a majority of the Registrable

Securities shall have the right to select one legal counsel to review and

comment upon any registration pursuant to this Agreement (the “Legal Counsel”),

which the Investors agree shall be Gibson, Dunn & Crutcher LLP or such

other counsel as thereafter designated in writing by the holders of at least a

majority of the Registrable Securities. 

The Investors hereby waive any conflict of interest or potential

conflict of interest that may arise as a result of the representation of such

Investors by Gibson, Dunn & Crutcher LLP in connection with the subject matter

of this Agreement.  The provision will

not prohibit any other counsel to an Investor from reviewing and commenting on

any registration filed pursuant to this Agreement at no cost to the Company.

 

(d)   Ineligibility

for Form S-3.  If Form S-3 is not

available for the registration of the resale of Registrable Securities

hereunder or the Company is not permitted by the Securities Act or the

Commission to use Form S-3, then the Company shall (i) register the resale

of the 

 

3

 

Registrable Securities on another appropriate form reasonably

acceptable to the holders of at least a majority of the Registrable Securities

and (ii) undertake to register the Registrable Securities on Form S-3 as soon

as such form is available; provided, however, that the Company shall maintain

the effectiveness of the Registration Statement then in effect until such time

as a Registration Statement on Form S-3 covering all of the Registrable

Securities has been declared effective by the Commission.

 

(e)   Sufficient

Number of Shares Registered.  In the

event the number of shares registered under a Registration Statement filed

pursuant to Section 2(a) of this Agreement is insufficient to cover all of the

Registrable Securities or all of an Investor’s allocated portion of the

Registrable Securities pursuant to Section 2(b) of

this Agreement, the Company shall amend the Registration

Statement, or file a new Registration Statement (on the short form available

therefor, if applicable), or both, so as to cover at least one hundred ten

percent (110%) of the number of such Registrable Securities other than shares

issuable upon exercise of the Warrants and one hundred percent (100%) of the

shares of Common Stock issuable upon exercise of the Warrants as of the trading

day immediately preceding the date of the filing of such amendment and/or new

Registration Statement, in each case, as soon as practicable, but in no event

later than fifteen (15) days after the necessity therefor arises.  The Company shall use its

reasonable efforts to cause such amendment and/or new Registration Statement to

become effective as soon as practicable following the filing thereof.  The calculation of the number of shares

sufficient to cover all of the Registrable Securities shall be made without

regard to any limitations on the conversion of the Series A Preferred or the

exercise of the Warrants, and such calculation shall assume that all of the

Series A Preferred are then convertible into, and all of the Warrants are then

exercisable for, shares of Common Stock at the then prevailing Conversion Rate

(as defined in the Series A Preferred) or Warrant Exercise Price (as defined in

the Warrants), as applicable.

 

(f)    Effect

of Failure to File and Obtain and Maintain Effectiveness of Registration

Statement.  If (i) a Registration

Statement covering all the Registrable Securities is not filed with the

Commission on or before the Filing Deadline or is not declared effective by the

Commission on or before the Effectiveness Deadline, (ii) a Registration

Statement covering all of the Registrable Securities required to be covered

thereby, as described in Section 2(e) of this Agreement, is not filed with the

Commission on or before the deadline described in Section 2(e) of this

Agreement or is not declared effective by the Commission on or before the

deadline described in Section 2(e) of this Agreement, (iii) on any day after

such Registration Statement has been declared effective by the Commission,

sales of all of the Registrable Securities required to be included on such

Registration Statement cannot be made (other than during an Allowable Grace

Period (as defined in Section 3(n) of this Agreement))

pursuant to such Registration Statement (including, without limitation, because

of a failure to keep such Registration Statement effective, to disclose such

information as is necessary for sales to be made pursuant to such Registration

Statement or to register a sufficient number of shares of Common Stock), or

(iv) a Grace Period exceeds the length of an Allowable Grace Period (each of

the items described in clauses (i), (ii), (iii) and (iv) above shall be

referred to as a “Registration Delay”), then, as partial relief for the damages

to the Investors by reason of any such delay in or reduction of its ability to

sell the Registrable Securities (which remedy shall not be exclusive of any

other remedies available at law or in equity), the Company shall pay (1) to

each holder of the Series A Preferred or Conversion Shares an amount in cash

equal to the product of (i) the initial amount paid for such Series A Preferred

or the related Conversion Shares multiplied by (ii) the product of (I) the 

 

4

 

percentage

determined by dividing (A) the Applicable Percentage (as defined below) by (B)

30, multiplied by (II) the sum of (x) the number of days (including any partial

days) after the Filing Deadline or the deadline described in Section 2(e) of

this Agreement, as applicable, that the Registration Statement is not filed

with the Commission, plus (y) the number of days (including any partial days)

after the Effectiveness Deadline or the deadline described in Section 2(e) of

this Agreement that the Registration Statement is not declared effective by the

Commission, plus (z) after the Registration Statement has been declared

effective by the Commission, the number of days (including any partial days)

that such Registration Statement is not available (other than during an

Allowable Grace Period) for the sale of all the Registrable Securities and (2)

to each holder of the Warrants or Warrant Shares an amount in cash equal to the

product of (i) the aggregate Exercise Price for such Warrant or any related

Warrant Shares, multiplied by (ii) the product of (I) the percentage determined

by dividing (A) the Applicable Percentage by (B) 30, multiplied by (II) the sum

of (x) the number of days (including any partial days) after the Filing

Deadline or the deadline described in Section 2(e) of this Agreement, as

applicable, that the Registration Statement is not filed with the Commission,

plus (y) the number of days (including any partial days) after the

Effectiveness Deadline or the deadline described in Section 2(e) of this

Agreement, as applicable, that the Registration Statement is not declared

effective by the Commission, plus (z) after the Registration Statement has been

declared effective by the Commission, the number of days (including any partial

days) that such Registration Statement is not available (other than during an

Allowable Grace Period) for the sale of all Registrable Securities.  The “Applicable Percentage” shall mean (A)

for periods that only include days on or before the date that is 60 days after

the commencement of a Registration Delay, eight-tenths percent (0.8%), (B) for

periods that only include days after date that is 60 days after the

commencement of a Registration Delay, one and two-tenths percent (1.2%) and (C)

for periods that include days both before and after the date that is that is 60

days after the commencement of a Registration Delay, a percentage equal to a

fraction, the numerator of which shall be the sum of (i) the number of days in

such period that are on or before the date that is 60 days after the

commencement of such Registration Delay multiplied by eight-tenths percent

(0.8%) and (ii) the number of days in such period that are after the date that

is 60 days after the commencement of such Registration Delay multiplied by one

and two-tenths percent (1.2%) and the denominator of which shall be the total

number of days comprising such period. 

The payments to which a holder shall be entitled pursuant to this

Section 2(f) are referred to herein as “Registration Delay Payments.”  The Registration Delay Payments shall be

paid in cash on the earlier of (A) the last day of the calendar month during

which such Registration Delay Payments are incurred and (B) the third Business

Day after the event or failure giving rise to the Registration Delay Payments

is cured.  In the event the Company

fails to make Registration Delay Payments in a timely manner, such Registration

Delay Payments shall bear interest at the rate of one and six-tenths percent

(1.6%) per month (prorated for partial months) until paid

in full.

 

SECTION 3.  Related Obligations.  At such time as the Company is obligated to

file a Registration Statement with the Commission pursuant to Sections 2(a),

2(d) or 2(e) of this Agreement, the Company will use reasonable efforts to

effect the registration of all of the Registrable Securities in accordance with

the intended method of disposition thereof and, pursuant thereto, the Company

shall have the following obligations:

 

(a)   The Company

shall promptly prepare and file with the Commission a Registration Statement

with respect to all of the Registrable Securities (but in no event later than 

 

5

 

the applicable

Filing Deadline) and use its reasonable efforts to cause such Registration

Statement relating to all of the Registrable Securities required to be covered

thereby to become effective as soon as practicable after such filing (but in no

event later than the applicable Effectiveness Deadline).  The Company shall, subject to the terms of

this Agreement, keep each Registration Statement effective pursuant to Rule 415

at all times until the earlier of (i) the date as of which all of the Investors

(other than any Investors who are “affiliates” of the Company as such term is

used in Rule 144(k) promulgated under the Securities Act) may sell all of the

Registrable Securities without restriction pursuant to Rule 144(k) (or the

successor rule thereto) promulgated under the Securities Act (assuming a

Cashless Exercise of any Warrants) or (ii) the date on which all of the

Investors shall have sold all of the Registrable Securities (the “Registration

Period”), which Registration Statement, as of its filing and effective dates

and each day thereafter (including all amendments or supplements thereto, as of

their respective filing and effective dates and each day thereafter), shall not

contain any untrue statement of a material fact or omit to state a material

fact required to be stated therein, or necessary to make the statements

therein, not misleading, and the prospectus contained in such Registration

Statement, as of its filing date and each day thereafter (including all

amendments and supplements thereto, as of their respective filing dates and

each day thereafter), shall not contain any untrue statement of a material fact

or omit to state a material fact required to be stated thereon, or necessary to

make the statements therein, in light of the circumstances in which they were

made, not misleading.

 

(b)   Subject to

Section 3(n) of this Agreement, the Company shall prepare and file with the

Commission such amendments (including post-effective amendments) and

supplements to the Registration Statement and the prospectus used in connection

with such Registration Statement, which prospectus is to be filed pursuant to

Rule 424 (or any successor rule thereto) promulgated under the Securities Act,

as may be necessary to keep such Registration Statement effective at all times

during the Registration Period, and, during such period, comply with the

provisions of the Securities Act.  In the

case of amendments and supplements to a Registration Statement and the

prospectus used in connection with such Registration Statement which are

required to be filed pursuant to this Agreement (including pursuant to this

Section 3(b)) by reason of the Company filing a report on Form 10-K, Form 10-Q

or Form 8-K or any analogous report under the Securities Exchange Act of 1934,

as amended, and the rules and regulations thereunder, or any similar successor

statute (the “Exchange Act”), the Company shall have incorporated such report

by reference into such Registration Statement, if applicable, or shall file

such amendments or supplements with the Commission on the same day on which the

Exchange Act report is filed which created the requirement for the Company to

amend or supplement such Registration Statement and prospectus.

 

(c)   The Company

shall permit Legal Counsel to review and comment upon each Registration

Statement, prospectus and all amendments and supplements thereto at least one

(1) Business Day prior to their filing with the Commission.  The Company shall furnish to the Investors

and Legal Counsel, without charge, (i) promptly after receipt of such

correspondence, copies of all correspondence from the Commission or the staff

of the Commission to the Company or its representatives relating to each

Registration Statement, prospectus and all amendments and supplements thereto,

(ii) promptly after the same is prepared and filed with the Commission, one (1)

copy of each Registration Statement, prospectus and all amendments and

supplements thereto, including all exhibits and financial statements related

thereto, and (iii) promptly upon the effectiveness of each Registration

Statement and each amendment and 

 

6

 

supplement

thereto, one (1) copy of the prospectus included in each such Registration

Statement and all amendments and supplements thereto.  The Company agrees that it will, and it will cause its counsel

to, consider in good faith any comments or objections from Legal Counsel as to

the form or content of each Registration Statement, prospectus and all

amendments or supplements thereto or any request for acceleration of the

effectiveness of each Registration Statement, prospectus and all amendments or

supplements thereto.

 

(d)   The Company

shall furnish to each Investor whose Registrable Securities are included in any

Registration Statement, without charge to such Investor, (i) promptly

after the same is prepared and filed with the Commission, at least one copy of

such Registration Statement and all amendments and supplements thereto,

including all exhibits and financial statements and each preliminary

prospectus, (ii) upon the effectiveness of each Registration Statement, such

number of copies of the prospectus included in such Registration Statement and

all amendments and supplements thereto as such Investor may reasonably request,

and (iii) such other documents, including copies of any preliminary or final

prospectus, as such Investor may reasonably request from time to time in order

to facilitate the disposition of the Registrable Securities.

 

(e)   Subject to

Section 3(n) of this Agreement, the Company shall use reasonable efforts to (i)

promptly register and qualify, unless an exemption from registration and

qualification applies, the resale of the Registrable Securities under such

other securities or “blue sky” laws of all applicable jurisdictions in the

United States as any holder of Registrable Shares reasonably requests in

writing, (ii) promptly prepare and file in those jurisdictions, such amendments

(including post-effective amendments) and supplements to such registrations and

qualifications as may be necessary to maintain the effectiveness thereof during

the Registration Period, (iii) promptly take such other actions as may be

reasonably necessary to maintain such registrations and qualifications in

effect at all times during the Registration Period, and (iv) promptly take all

other actions reasonably necessary or advisable to qualify the Registrable

Securities for sale in such jurisdictions; provided, however, that the Company

shall not be required in connection therewith or as a condition thereto to file

a general consent to service of process in any such jurisdiction, except in

such jurisdictions where the Company is subject to service of process.  The Company shall promptly notify each

Investor who holds Registrable Securities and Legal Counsel of the receipt by

the Company of any notification with respect to the suspension of the

registration or qualification of any of the Registrable Securities for sale

under the securities or “blue sky” laws of any jurisdiction in the United

States or its receipt of notice of the initiation or threatening of any

proceeding for such purpose.

 

(f)    Notwithstanding

anything to the contrary set forth herein, as promptly as practicable after

becoming aware of such event, the Company shall notify each Investor and Legal

Counsel in writing of the happening of any event as a result of which (i) the

Registration Statement or any amendment or supplement thereto, as then in

effect, includes an untrue statement of a material fact or omission to state a

material fact required to be stated therein or necessary to make the statements

therein not misleading or (ii) the prospectus related to such Registration

Statement or any amendment or supplement thereto includes an untrue statement

of a material fact or omission to state a material fact required to be stated

therein or necessary to make the statements therein, in light of the

circumstances under which they were made, not misleading, and, subject to

Section 3(n) of this Agreement, promptly prepare a supplement or 

 

7

 

amendment to such

Registration Statement and prospectus to correct such untrue statement or

omission, and deliver such number of copies of such supplement or amendment to

each Investor and Legal Counsel as such Investor or Legal Counsel may

reasonably request.  The Company shall

also promptly notify each Investor and Legal Counsel in writing (i) when a

prospectus and each prospectus supplement or amendment thereto has been filed,

and when a Registration Statement and each amendment (including post-effective

amendments) and supplement thereto has been declared effective by the

Commission (notification of such effectiveness shall be delivered to each

Investor and Legal Counsel by facsimile on the same day of such effectiveness

and by overnight mail), (ii) of any request by the

Commission for amendments or supplements to a Registration Statement or related

prospectus or related information, and (iii) of the Company’s reasonable

determination that an amendment (including any post-effective amendment) or

supplement to a Registration Statement or prospectus would be appropriate

(subject to Section 3(n) hereof).

 

(g)   Subject to

Section 3(n) of this Agreement, the Company shall use reasonable efforts to (i)

prevent the issuance of any stop order or other suspension of effectiveness of

a Registration Statement, or the suspension of the qualification of any of the

Registrable Securities for sale in any jurisdiction, (ii) if such an order or

suspension is issued, obtain the withdrawal of such order or suspension at the

earliest practicable moment and notify each holder of Registrable Securities

and Legal Counsel of the issuance of such order and the resolution thereof or

its receipt of notice of the initiation or threat of any proceeding for such

purpose.

 

(h)   The Company

shall hold in confidence and not make any disclosure of information concerning

an Investor provided to the Company unless (i) disclosure of such information

is necessary to comply with United States federal or state securities laws,

(ii) the disclosure of such information is necessary to avoid or correct a

misstatement or omission in any Registration Statement, prospectus or any

amendment or supplement thereto, (iii) the release of such information is

ordered pursuant to a subpoena or other final, non-appealable order from a

court or governmental body of competent jurisdiction, or (iv) such information

has been made generally available to the public other than by disclosure in

violation of this Agreement or any other agreement.  The Company agrees that it shall, upon learning that disclosure

of such information concerning an Investor is sought in or by a court or governmental

body of competent jurisdiction or through other means, unless ordered or

requested by the Commission or other governmental authority not to do so, give

prompt written notice to such Investor and allow such Investor, at the

Investor’s expense, to undertake appropriate action to prevent disclosure of,

or to obtain a protective order for, such information.

 

(i)    The

Company shall use its best efforts to (i) cause all the Registrable Securities

to be listed on each securities exchange on which securities of the same class

or series issued by the Company are then listed, if any, if the listing of such

Registrable Securities is then permitted under the rules of such exchange, or

(ii) secure designation and quotation of all the Registrable Securities on The

Nasdaq National Market, or (iii) if the Company

is unsuccessful in satisfying the preceding clause (i) or (ii), to secure the

inclusion for quotation on The Nasdaq SmallCap Market for such Registrable

Securities and, without limiting the generality of the foregoing, to arrange

for at least two market makers to register with the National Association of

Securities Dealers, Inc. (“NASD”) as such with respect

to such Registrable Securities.  The 

 

8

 

Company shall pay

all fees and expenses in connection with satisfying its obligation under this

Section 3(i).

 

(j)    In

connection with any sale or transfer of Registrable Securities pursuant to a

Registration Statement, the Company shall cooperate with the Investors who hold

Registrable Securities being offered and, to the extent applicable, facilitate

the timely preparation and delivery of certificates (not bearing any

restrictive legend) representing the Registrable Securities to be offered

pursuant to a Registration Statement and enable such certificates to be in such

denominations or amounts, as the case may be, as the Investors may reasonably

request and, registered in such names as the Investors may request.

 

(k)   If

requested by an Investor, the Company shall (i) as soon as practicable,

incorporate in each prospectus supplement or post-effective amendment to the

Registration Statement such information as an Investor reasonably requests to

be included therein relating to the sale and distribution of Registrable Securities,

(ii) as soon as practicable, make all required filings of such prospectus

supplement or post-effective amendment after being notified of the matters to

be incorporated in such prospectus supplement or post-effective amendment, and

(iii) as soon as practicable, supplement or make amendments to any

Registration Statement and prospectus if reasonably requested by an Investor

holding any Registrable Securities.

 

(l)    The

Company shall comply with all applicable rules and regulations of the

Commission in connection with any registration hereunder.

 

(m)  Within two

(2) Business Days after a Registration Statement is ordered effective by the

Commission, the Company shall deliver, and shall cause legal counsel for the

Company to deliver, to the transfer agent for the Registrable Securities (with

copies to the Investors whose Registrable Securities are included in such

Registration Statement) confirmation that such Registration Statement has been

declared effective by the Commission in the form attached hereto as Exhibit

B.

 

(n)   Notwithstanding

anything to the contrary herein, at any time after a Registration Statement has

been declared effective by the Commission, the Company may delay the disclosure

of material non-public information concerning the Company if the disclosure of

such information at the time is not, in the good faith judgment of the Board of

Directors of the Company, in the best interests of the Company (a “Grace

Period”); provided, however, that the Company shall promptly (i) notify the

Investors in writing of the existence of material non-public information giving

rise to a Grace Period (provided that the Company shall not disclose the

content of such material non-public information to the Investors) and the date

on which the Grace Period will begin, and (ii) notify the Investors in

writing of the date on which the Grace Period ends; provided further, that no

single Grace Period shall exceed thirty (30) consecutive days, during any three

hundred sixty-five (365) day period, the aggregate of all of the Grace Periods

shall not exceed an aggregate of sixty (60) days and the first day of any Grace

Period must be at least two (2) trading days after the last day of any prior

Grace Period (an “Allowable Grace Period”). 

For purposes of determining the length of a Grace Period, the Grace

Period shall be deemed to begin on and include the date the Investors receive

the notice referred to in clause (i) and shall end on and include the later of

the date the Investors receive the notice referred to in clause (ii) and the

date referred to in such notice; provided, however, that no Grace Period shall 

 

9

 

be longer than an

Allowable Grace Period.  The provisions

of Section 3(g) of this Agreement shall not

be applicable during the period of any Allowable Grace Period.  Upon expiration of the Grace Period, the

Company shall again be bound by the first sentence of Section 3(f) of this

Agreement.

 

SECTION 4.  Obligations Of The Investors.

 

(a)   At least

seven (7) Business Days prior to the first anticipated filing date of a

Registration Statement, the Company shall notify each Investor in writing of

the information the Company requires from each such Investor if such Investor

elects to have any of such Investor’s Registrable Securities included in such

Registration Statement.  It shall be a

condition precedent to the obligations of the Company to complete the

registration pursuant to this Agreement with respect to the Registrable Securities

of a particular Investor that such Investor shall furnish to the Company such

information regarding itself, the Registrable Securities held by it and the

intended method of disposition of the Registrable Securities held by it as

shall be reasonably required to effect the effectiveness of the registration of

such Registrable Securities and shall execute such documents in connection with

such registration as the Company may reasonably request.  Each Investor shall promptly notify the

Company of any material change with respect to such information previously

provided to the Company by such Investor.

 

(b)   Each

Investor agrees to cooperate with the Company as reasonably requested by the

Company in connection with the preparation and filing of any Registration

Statement hereunder, unless such Investor has notified the Company in writing

of such Investor’s election to exclude all of such Investor’s Registrable

Securities from such Registration Statement, in which case, such Investor does

not need to cooperate with the Company until it notifies the Company of its

desire to include one or more share of the Registrable Securities in such

Registration Statement.

 

(c)   Each

Investor agrees that, upon receipt of any notice from the Company of the

happening of any event of the kind described in Sections 3(g) or

3(n) of this Agreement or the first sentence of Section 3(f) of this Agreement,

such Investor will immediately discontinue disposition of Registrable

Securities pursuant to any Registration Statements covering such Registrable

Securities until such Investor’s receipt of the copies of the amended or

supplemented prospectus contemplated by Section 3(g) of this Agreement or the

first sentence of Section 3(f) of this Agreement or receipt of notice that no

amendment or supplement is required and, if so directed by the Company, such

Investor shall deliver to the Company (at the expense of the Company) or

destroy (and deliver to the Company a certificate of destruction) all copies of

the prospectus covering such Registrable Securities current at the time of receipt

of such notice (other than a single file copy, which such Investor may keep) in

such Investor’s possession. 

Notwithstanding anything to the contrary in this Agreement, the Company

shall cause its transfer agent to deliver unlegended shares of Common Stock to

a transferee of an Investor in accordance with the terms of the Securities

Purchase Agreement, the Series A Preferred, and/or the Warrants, as applicable,

in connection with any sale of Registrable Securities with respect to which an

Investor has entered into a contract for sale prior to the Investor’s receipt

of a notice from the Company of the happening of any event of the kind

described in Section 3(g) of this Agreement or the

first sentence of Section 3(f) of this Agreement and for which the Investor has

not yet settled.

 

10

 

SECTION 5.  Expenses Of Registration.  All expenses, other than underwriting

discounts and commissions, incurred in connection with registrations, filings

or qualifications pursuant to Sections 2 and 3 of this Agreement, including,

without limitation, all registration, listing and qualifications fees, printers

and accounting fees, and fees and disbursements of counsel for the Company

shall be paid by the Company.  The

Company shall also reimburse the Investors for the fees and disbursements of

Legal Counsel in connection with registration, filing or qualification pursuant

to Sections 2 and 3 of this Agreement which amount shall be limited to Ten

Thousand Dollars ($10,000) for each Registration Statement.  In addition, the Company shall pay all of

the Investors’ reasonable costs (including fees and disbursements of Legal

Counsel) incurred in connection with the successful enforcement of the

Investors rights under this Agreement.

 

SECTION 6.  Indemnification.  In the event any Registrable Securities are included in a

Registration Statement under this Agreement:

 

(a)   To the

fullest extent permitted by law, the Company will, and hereby does, indemnify,

hold harmless and defend each Investor, the directors, officers, members,

partners, employees, agents, representatives of, and each Person, if any, who

controls any Investor within the meaning of the Securities Act or the Exchange

Act (each, an “Indemnified Person”), against any losses, claims, damages,

liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’

fees, amounts paid in settlement or expenses, joint or several, (collectively,

“Claims”) incurred in investigating, preparing or defending any action, claim,

suit, inquiry, proceeding, investigation or appeal taken from the foregoing by

or before any court or governmental, administrative or other regulatory agency,

body or the Commission, whether pending or threatened, whether or not an

indemnified party is or may be a party thereto (“Indemnified Damages”), to

which any of them may become subject insofar as such Claims (or actions or

proceedings, whether commenced or threatened, in respect thereof) arise out of

or are based upon (i) any untrue statement or alleged untrue statement of a

material fact in a Registration Statement or any amendment (including

post-effective amendments) or supplement thereto or in any filing made in

connection with the qualification of the offering under the securities or other

“blue sky” laws of any jurisdiction in which Registrable Securities are offered

(“Blue Sky Filing”), or the omission or alleged omission to state a material

fact required to be stated therein or necessary to make the statements therein

not misleading, or (ii) any untrue statement or alleged untrue statement of a

material fact contained in any preliminary prospectus if used prior to the

effective date of such Registration Statement, or contained in the final

prospectus (as amended or supplemented, if any) or the omission or alleged

omission to state therein any material fact necessary to make the statements

made therein, in light of the circumstances under which the statements therein

were made, not misleading, or (iii) any violation or alleged violation caused by

the Company, or its directors, officers, employees, agents or representatives

acting on its behalf, of the Securities Act, the Exchange Act, any other law,

including, without limitation, any state securities law, or any rule or

regulation thereunder relating to the offer or sale of the Registrable

Securities pursuant to a Registration Statement (the matters in the foregoing

clauses (i) through (ii) being, collectively, “Violations”).  Subject to Section 6(c)

of this Agreement, the Company shall reimburse the

Indemnified Persons, promptly as such expenses are incurred and are due and

payable, for any legal fees or other reasonable expenses incurred by them in

connection with investigating or defending any such Claim.  Notwithstanding anything to the contrary

contained herein, the indemnification agreement contained in this Section

6(a):  (i) shall 

 

11

 

 

not apply to a

Claim by an Indemnified Person arising out of or based upon a Violation which

occurs in reliance upon and in conformity with information furnished in writing

to the Company by such Indemnified Person for such Indemnified Person expressly

for use in connection with the preparation of the Registration Statement or any

such amendment thereof or supplement thereto;

(ii) shall not be available to the extent such Claim is based on a failure of

the Investor to deliver or to cause to be delivered the prospectus made

available by the Company, including a corrected prospectus, if such prospectus

or corrected prospectus was timely made available by the Company pursuant to

Section 3(d) of this Agreement; and (iii) shall not apply to amounts paid in

settlement of any Claim if such settlement is effected without the prior

written consent of the Company, which consent shall not be unreasonably

withheld or delayed.  Such indemnity

shall remain in full force and effect regardless of any investigation made by

or on behalf of the Indemnified Person and shall survive the transfer of the

Registrable Securities by the Investors pursuant to Section 9 of this

Agreement.

 

(b)   In

connection with any Registration Statement in which an Investor is

participating, each such Investor agrees to severally and not jointly

indemnify, hold harmless and defend, to the same extent and in the same manner

as is set forth in Section 6(a) of this Agreement, the Company, each of its

directors, each of its officers who signs the Registration Statement and each

Person, if any, who controls the Company within the meaning of the Securities

Act or the Exchange Act (each, an “Indemnified Party”), against any Claims or

Indemnified Damages to which any of them may become subject, under the

Securities Act, the Exchange Act or otherwise, insofar as such Claims or

Indemnified Damages arise out of or are based upon any Violation, in each case

to the extent, and only to the extent, that such Violation occurs in reliance

upon and in conformity with written information furnished to the Company by

such Investor expressly for use in connection with such Registration Statement

and, subject to Section 6(c) of this Agreement, such Investor will reimburse

any legal or other expenses reasonably incurred by an Indemnified Party in

connection with investigating or defending any such Claim; provided, however,

that the indemnity agreement contained in this Section 6(b) and the agreement

with respect to contribution contained in Section 7 of this Agreement shall not

apply to amounts paid in settlement of any Claim if such settlement is effected

without the prior written consent of such Investor, which consent shall not be

unreasonably withheld or delayed; provided, further, that the Investor shall be

liable under this Section 6(b) for only that amount of the Claims and

Indemnified Damages as does not exceed the net proceeds to such Investors as a

result of the sale of Registrable Securities pursuant to such Registration

Statement. Such indemnification agreement shall remain in full force and effect

regardless of any investigation made by or on behalf of such Indemnified Party and

shall survive the transfer of the Registrable Securities by the Investors

pursuant to Section 9 of this Agreement. 

Notwithstanding anything to the contrary contained herein, the

indemnification agreement contained in this Section 6(b) shall not inure to the

benefit of any Indemnified Party if the untrue statement or omission of

material fact contained in the preliminary prospectus was corrected on a timely

basis in the prospectus, as then amended or supplemented.

 

(c)   Promptly

after an Indemnified Person or Indemnified Party under this Section 6 has

knowledge of any Claim as to which such Indemnified Person reasonably believes

indemnity may be sought or promptly after such Indemnified Person or

Indemnified Party receives notice of the commencement of any action or

proceeding (including any governmental action or proceeding) involving a Claim,

such Indemnified Person or Indemnified Party shall, if a 

 

12

 

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 such Claim, and the

indemnifying party shall have the right to participate in, and, to the extent

the indemnifying party so desires, jointly with any other indemnifying party

similarly noticed, to assume control of the defense thereof with counsel

mutually satisfactory to the indemnifying party and the Indemnified Person or

the Indemnified Party, as the case may be; provided, however, that an

Indemnified Person or Indemnified Party shall have the right to retain its own

counsel if, in the reasonable opinion of counsel retained by the indemnifying

party, the representation by such counsel of the Indemnified Person or

Indemnified Party and the indemnifying party would be inappropriate due to

actual or potential differing interests between such Indemnified Person or

Indemnified Party and any other party represented by such counsel in such

proceeding; provided, further, that the indemnifying party shall not be

responsible for the reasonable fees and expense of more than one (1) separate

legal counsel for such Indemnified Person or Indemnified Party.  In the case of an Indemnified Person, the

legal counsel referred to in the immediately preceding sentence shall be

selected by the Investors holding at least a majority in interest of the

Registrable Securities included in the Registration Statement to which the

Claim relates.  The Indemnified Party or

Indemnified Person shall cooperate fully with the indemnifying party in connection

with any negotiation or defense of any such action or Claim by the indemnifying

party and shall furnish to the indemnifying party all information reasonably

available to the Indemnified Party or Indemnified Person which relates to such

action or Claim.  The indemnifying party shall keep the Indemnified Party or

Indemnified Person fully apprised at all times as to the status of the defense

or any settlement negotiations with respect thereto.  No indemnifying party shall be liable for any settlement of any

action, claim or proceeding effected without its prior written consent;

provided, however, that the indemnifying party shall not unreasonably withhold,

delay or condition its consent.  No

indemnifying party shall, without the prior written consent of the Indemnified

Party or Indemnified Person, consent to entry of any judgment or enter into any

settlement or other compromise which does not include as an unconditional term

thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified

Person of a full release from all liability in respect to such Claim and action

and proceeding.  After indemnification

as provided for under this Agreement, the rights of the indemnifying party

shall be subrogated to all rights of the Indemnified Party or Indemnified

Person with respect to all third parties, firms or corporations relating to the

matter for which indemnification has been made.  The failure to deliver written notice to the indemnifying party as

provided in this Agreement shall not relieve such indemnifying party of any

liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party

is prejudiced in its ability to defend such action.

 

(d)   The

indemnification required by this Section 6 shall be made by periodic payments

of the amount thereof during the course of the investigation or defense, as and

when bills are received or Indemnified Damages are incurred.

 

(e)   The

indemnity agreements contained herein shall be in addition to (i) any

cause of action or similar right of the Indemnified Party or Indemnified Person

against the indemnifying party or others, and (ii) any liabilities the

indemnifying party may be subject to pursuant to the law.

 

13

 

SECTION 7.  Contribution.  To the extent any indemnification by an indemnifying party is

prohibited or limited by law, the indemnifying party agrees to make the maximum

contribution with respect to any amounts for which it would otherwise be liable

under Section 6 of this Agreement to the fullest extent permitted by law;

provided, however, that:  (i) no contribution shall be made under

circumstances where the maker would not have been liable for indemnification

under the fault standards set forth in Section 6

of this Agreement, (ii) no Person involved in

the sale of Registrable Securities which Person is guilty of fraudulent

misrepresentation (within the meaning of Section 11(f)

of the Securities Act) in connection with such sale shall be entitled to

contribution from any Person involved in such sale of Registrable Securities

who was not guilty of fraudulent misrepresentation, and (iii) contribution by

any seller of Registrable Securities shall be limited in amount to the net

amount of proceeds received by such seller from the sale of such Registrable

Securities pursuant to such Registration Statement.  The provisions of this Section 7 shall remain in full force and

effect, regardless of the investigation made by or on behalf of the beneficiaries

of this Section 7 and shall survive the transfer of Registrable Securities by

the Investors pursuant to Section 9 of this Agreement.

 

SECTION 8.  Reporting.

 

(a)   Reports

Under The Exchange Act.  With a view

to making available to the Investors the benefits of Rule 144 promulgated under

the Securities Act or any other similar rule or regulation of the Commission

that may at any time permit the Investors to sell securities of the Company to

the public without registration (“Rule 144”), the Company shall use its best

efforts to:

 

(1)           make and keep public information

available, as those terms are understood and defined in Rule 144;

 

(2)           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

 

(3)           furnish to each Investor, so long as

such Investor owns Registrable Securities, promptly upon request, (A) a written

statement by the Company, if true, that it has complied with the applicable

reporting requirements of Rule 144, the Securities Act and the Exchange Act,

(B) a copy of the most recent annual or quarterly report of the Company and

copies of such other reports and documents so filed by the Company, and (C)

such other information as may be reasonably requested to permit the Investors

to sell such securities pursuant to Rule 144 without registration.

 

(b)   Rule

144A Information. The Company shall, upon request of any Investor, make

available to such Investor the information required by Rule 144A(d)(4) (or any

successor rule) under the Securities Act.

 

SECTION 9.  Assignment of Registration Rights  The rights under this Agreement shall be

automatically assignable by the Investors to any transferee of at least

$250,000 of Registrable Securities if: 

(i) the Investor agrees in writing with the transferee or 

 

14

 

assignee to assign

such rights, and a copy of such agreement is furnished to the Company within a

reasonable time after such assignment; (ii) the Company is, within a

reasonable time after such transfer or assignment, furnished with written

notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such rights

are being transferred or assigned; (iii) immediately following such transfer or

assignment, the further disposition of such securities by the transferee or

assignee is restricted under the Securities Act and applicable state securities

laws; (iv) at or before the time the Company receives the written notice

contemplated by clause (ii) of this sentence, the

transferee or assignee agrees in writing with the Company to be bound by all of

the obligations of an Investor under this Agreement; (v) such transfer shall

have been made in accordance with the applicable requirements of the Securities

Purchase Agreement, the Series A Preferred and the Warrants; and (vi) such

transfer shall have been conducted in accordance with all applicable federal

and state securities laws.

 

SECTION 10.  Amendment of Registration Rights.  Any provision of this Agreement may be

amended and the observance of any provision of this Agreement may be waived

(either generally or in a particular instance and either retroactively or

prospectively), only with the written consent of the Company and Investors who

then hold at least a majority of the Registrable Securities.  Any amendment or waiver effected in

accordance with this Section 10 shall be binding upon each Investor and the

Company.  No such amendment shall be

effective to the extent that it applies to less than all of the holders of the

Registrable Securities.  No

consideration shall be offered or paid to any Person to amend or consent to a

waiver or modification of any provision of any of this Agreement unless the

same consideration also is offered to all of the parties to this Agreement.

 

SECTION 11.  Miscellaneous

 

(a)   A Person is

deemed to be a holder of Registrable Securities whenever such Person owns or is

deemed to own of record such Registrable Securities.  If the Company receives conflicting instructions, notices or

elections from two or more Persons with respect to the same Registrable

Securities, the Company shall act upon the basis of instructions, notice or

election received from such record owner of such Registrable Securities.

 

(b)   Any

notices, consents, waivers or other communications required or permitted to be

given under the terms of this Agreement must be in writing and will be deemed

to have been delivered:  (i) upon

receipt, when delivered personally; (ii) upon receipt, when sent by facsimile;

or (iii) one (1) Business Day after deposit with a nationally recognized

overnight delivery service, in each case properly addressed to the party to

receive the same.  The addresses and

facsimile numbers for such communications shall be:

 

	

  If to the

  Company:

  	

   

  
	

   

  
	

  Manufacturers’

  Services Limited

  
	

  300 Baker

  Avenue, Suite 106

  
	

  Concord,

  Massachusetts  10742

  
	

  Telephone:

  	

  (978) 287-5630

  
	

  Facsimile:

  	

  (978) 287-5635

  
	

  Attention:

  	

  Chief Executive Officer

  and General Counsel

  
			

 

15

 

	

  with a copy to:

  
	

   

  
	

  Hale and Dorr

  LLP

  
	

  60 State Street

  
	

  Boston,

  Massachusetts, 02109

  
	

  Telephone:

  	

  (617) 526-6000

  
	

  Facsimile:

  	

  (617) 526-5000

  
	

  Attention: 

  	

  John A. Burgess, Esq.

  
	

   

  

 

	

  If to Robertson

  Stephens:

  
	

   

  
	

  Robertson

  Stephens, Inc.

  
	

  555 California

  Street

  
	

  Suite 2600

  
	

  San Francisco,

  California  94101

  
	

  Telephone:

  	

  (415) 676-2886

  
	

  Facsimile:

  	

  (415) 982-2488

  
	

  Attention:

  	

  Mr. James Anderson

  Mr. Matt Seedorf

  Mr. David Fullerton

  
	

   

  	

   

  

 

	

  with a copy to:

  
	

   

  
	

  Gibson, Dunn

  & Crutcher LLP

  
	

  1050 Connecticut

  Avenue, NW

  
	

  Washington,

  DC  20036

  
	

  Telephone:

  	

  (202) 955-8500

  
	

  Facsimile:

  	

  (202) 467-0539

  
	

  Attention:

  	

  Brian J. Lane, Esq.

  

 

	

  If to Legal

  Counsel:

  
	

   

  
	

  Gibson, Dunn

  & Crutcher LLP

  
	

  1050 Connecticut

  Avenue, NW

  
	

  Washington,

  DC  20036

  
	

  Telephone:

  	

  (202) 955-8500

  
	

  Facsimile:

  	

  (202) 467-0539

  
	

  Attention:

  	

  Brian J. Lane, Esq.

  

 

If to a Buyer, to its

address and facsimile number set forth on the Schedule of Buyers attached

hereto as Exhibit A, with copies to such Buyer’s representatives as set

forth on 

 

16

 

the Schedule of Buyers,

or to such other address and/or facsimile number and/or to the attention of

such other Person as the recipient party has specified by written notice given

to each other party five (5) days prior to the effectiveness of such

change.  Written confirmation of receipt

(A) given by the recipient of such notice, consent, waiver or other

communication, (B) mechanically or electronically generated by the sender’s

facsimile machine containing the time, date, recipient facsimile number and an

image of the first page of such transmission, or (C) provided by a courier or

overnight courier service shall be rebuttable evidence of personal service,

receipt by facsimile or receipt from a nationally recognized overnight delivery

service in accordance with clause (i), (ii) or (iii) above, respectively.

 

(c)   Failure of

any party to exercise any right or remedy under this Agreement or otherwise, or

delay by a party in exercising such right or remedy, shall not operate as a

waiver thereof.

 

(d)   All

questions concerning the construction, validity, enforcement and interpretation

of this Agreement shall be governed by the internal laws of the State of New

York, without giving effect to any choice of law or conflict of law provision

or rule (whether of the State of New York or any other jurisdictions) that

would cause the application of the laws of any jurisdictions other than the

State of New York.  Each party hereby

irrevocably submits to the non-exclusive jurisdiction of the state and federal

courts sitting the City of New York, borough of Manhattan, for the adjudication

of any dispute hereunder or in connection herewith or with any transaction

contemplated hereby or discussed herein, and hereby irrevocably waives, and

agrees not to assert in any suit, action or proceeding, any claim that it is

not personally subject to the jurisdiction of any such court, that such suit,

action or proceeding is brought in an inconvenient forum or that the venue of

such suit, action or proceeding is improper. 

Each party hereby irrevocably waives personal service of process and

consents to process being served in any such suit, action or proceeding by

mailing a copy thereof to such party at the address for such notices to it

under this Agreement and agrees that such service shall constitute good and

sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any

right to serve process in any manner permitted by law.  If any provision of this Agreement shall be

invalid or unenforceable in any jurisdiction, such invalidity or

unenforceability shall not affect the validity or enforceability of the

remainder of this Agreement in that jurisdiction or the validity or

enforceability of any provision of this Agreement in any other

jurisdiction.  EACH PARTY HEREBY

IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY

TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH

OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(e)   This

Agreement, the Securities Purchase Agreement, the Warrants and the documents

referenced herein and therein constitute the entire agreement among the parties

hereto with respect to the subject matter hereof and thereof.  There are no restrictions, promises,

warranties or undertakings, other than those set forth or referred to herein

and therein.  This Agreement, the

Securities Purchase Agreement, the Warrants and the documents referenced herein

and therein supersede all prior agreements and understandings among the parties

hereto with respect to the subject matter hereof and thereof.

 

17

 

(f)    Subject to

the requirements of Section 9 of this Agreement, this Agreement shall inure to

the benefit of and be binding upon the permitted successors and assigns of each

of the parties hereto.

 

(g)   The

headings in this Agreement are for convenience of reference only and shall not

limit or otherwise affect the meaning hereof.

 

(h)   This

Agreement may be executed in identical counterparts, each of which shall be

deemed an original but all of which shall constitute one and the same

agreement.  This Agreement, once

executed by a party, may be delivered to the other parties hereto by facsimile

transmission of a copy of this Agreement bearing the signature of the party so

delivering this Agreement.

 

(i)    Each party

shall do and perform, or cause to be done and performed, all such further acts

and things, and shall execute and deliver all such other agreements,

certificates, instruments and documents, as the other party may reasonably

request in order to carry out the intent and accomplish the purposes of this

Agreement and the consummation of the transactions contemplated hereby.

 

(j)    All

consents and other determinations required to be made by the Investors pursuant

to this Agreement shall be made, unless otherwise specified in this Agreement,

by Investors holding at least a majority of the Registrable Securities,

determined as if all of the Series A Preferred held by Investors then

outstanding have been converted into Registrable Securities and all Warrants

then outstanding have been exercised for Registrable Securities without regard

to any limitations on conversion of the Series A Preferred or on exercise of

the Warrants.

 

(k)   The

language used in this Agreement will be deemed to be the language chosen by the

parties to express their mutual intent and no rules of strict construction will

be applied against any party.

 

(l)    This Agreement

is intended for the benefit of the parties hereto and their respective

permitted successors and assigns, and is not for the benefit of, nor may any

provision hereof be enforced by, any other Person.

 

18

 

IN WITNESS WHEREOF,

the parties have caused this Registration Rights Agreement to be duly executed

as of day and year first above written.

 

	

   

  	

   

  	

  “COMPANY”

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  MANUFACTURERS’

  SERVICES LIMITED

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

        /s/

  Albert A. Notini

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  Name: 

  	

  Albert A. Notini

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  Title:

  	

  Chief Financial Officer

  and

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  Executive Vice President

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  “ROBERTSON”

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  ROBERTSON

  STEPHENS, INC.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

  /s/ Daniel P. White III

  	

   

  
	

   

  	

   

  	

   

  	

  Its:

  	

  Managing Director

  	

   

  
												

 

[Signatures of Buyers on

Following Page]

 

 

[SIGNATURE PAGE TO

REGISTRATION RIGHTS AGREEMENT]

 

	

   

  	

  “BUYER”

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  (print

  full legal name of Buyer)

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  (signature of authorized

  representative)

  
	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

   

  
	

   

  	

  Its:

  	

   

  
	

   

  	

   

  

 

Exhibit A-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00035-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00035-of-00352.parquet"}]]