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EXHIBIT 4
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated this _____ day of ________, 1998
(the "Agreement"), by and among those investors set forth on Schedule A (the
"Modtech Stockholders"), and on Schedule B (the "SPI Stockholders"), and Modtech
Holdings, Inc., a Delaware corporation (the "Company"). The Modtech Stockholders
and the SPI Stockholders are sometimes collectively referred to in this
Agreement as "Holders" or "Investors".
1. Background. Modtech, Inc. and SPI Holdings, Inc. entered into an
Agreement and Plan of Reorganization and Merger dated as of September 28, 1998
(the "Merger Agreement"). The Investors are, or are comprised of, persons who
are or may be considered "affiliates" of the parties to the Merger Agreement, as
that term is defined in Rule 144. Investors have received certain shares of the
Company's common stock ("Registrable Securities") pursuant to the Merger
Agreement. The Merger Agreement provided that Investors shall have certain
Registration Rights. This Agreement sets forth the Registration Rights granted
to the Investors pursuant to the Merger Agreement.
2. Registration under Securities Act
2.1 Company Registration.
(a) Subject to the limitations set forth herein, if at any time
after the completion of the Mergers (as defined in the Merger Agreement) the
Company shall determine to register, pursuant to the Act, any of its equity
securities for its own account other than a registration relating solely to
employee benefit plans, or a registration on any registration form which does
not permit secondary sales or does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:
(i) promptly give to each of the Holders a written
notice thereof (which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the applicable blue
sky or other state securities laws); and
(ii) use its best efforts to include in such
registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, subject to the
limitations of Sections 2.1(b) and 2.1(c) below, all the Registrable Securities
specified in a written request or requests (the "Requested Securities"), made by
the Holders within [twenty-five (25) days] after receipt of the written notice
from the Company described in clause (i) above. Except as otherwise limited,
such written request may specify all or a part of the Holders' Registrable
Securities. The Company is not required to include the Registrable Securities
among the securities covered by
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the registration statement if (i) the requests of the Holders cover, in the
aggregate, less than $1,000,000 in market value determined as of the date of the
request; or (ii) the Board of Directors of the Company, or the representative of
the underwriters, determines in good faith that including the Registrable
Securities held by any Holder among the securities covered by the registration
statement would have a materially detrimental effect on the offering and would
therefore not be in the best interest of the Company.
(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 2.1(a)(i). In such event, the right of each of the
Holders to registration pursuant to this Section 2.1 shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. The Holders whose shares are to be included in such registration (other
than any Holder that elects not to participate in such underwriting) (together
with the Company, and any other stockholders entitled to distribute their
securities through such underwriting) shall enter into an underwriting agreement
in customary form with the representative of the underwriter or underwriters
selected for underwriting by the Company. Notwithstanding any other provision of
this Section 2.1, if the representative determines in its reasonable opinion
that marketing factors require a limitation on the number of shares to be
underwritten, the representative may exclude from such registration and
underwriting some or all of the Registrable Securities which would otherwise be
underwritten pursuant hereto. The Company shall so advise all Holders of
Requested Securities, and the number of the Requested Securities that are
entitled to be included in the registration and underwriting shall be allocated
in accordance with subsection (c) of this Section 2.1. If any of the Holders
disapproves of the terms of any such underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company and the underwriter. Any
Registrable Securities or other securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
(c) Number and Transferability.
(A) In each registration statement in which Requested
Securities may be included (the "Allocated Shares") until the Modtech
Stockholders have sold 2,300,000 shares of Registrable Securities after the date
hereof pursuant to an exemption from the registration provisions of the Act or a
registration statement, the number of shares to be registered on behalf of the
Investors shall be allocated between the SPI Investors as a group and the
Modtech Stockholders as a group as follows:
(i) The Modtech Stockholders shall be entitled to sell
42.5% of the Allocated Shares;
(ii) The SPI Stockholders shall be entitled to sell 7.5%
of the Allocated Shares; and
(iii) the remaining 50% of the Allocated Shares shall
consist of the Requested Securities of both SPI Stockholders and
Modtech Stockholders, on a pro rata basis in accordance with
their respective ownership of Registrable Securities.
(B) In all subsequent registration statements, afer the
conditions set forth in Section 2.1 (c) (A) have been met until such time as the
SPI Stockholders have sold 750,000
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shares of Registrable Securities after the date hereof, the number of shares to
be registered on behalf of the Investors shall be allocated between the SPI
Stockholders as a group and the Modtech Stockholders as a group as follows:
(i) The SPI Stockholders shall be entitled to sell 42.5%
of the Allocated Shares;
(ii) The Modtech Stockholders shall be entitled to sell
7.5% of the Allocated Shares; and
(iii) the remaining 50% of the Allocated Shares shall
consist of the Requested Securities of both SPI Stockholders and
Modtech Stockholders, on a pro-rata basis.
Subject to Section 2.7, each of the Holders shall be entitled to
have its Registrable Securities included in one or more registrations on the
same basis as and pursuant to this Section 2.1, until such Holder is no longer
subject to the terms of Rule 145 promulgated under the Act.
(d) The Company shall have priority over any and all of the
Holders with respect to the inclusion of shares in each registration that is
subject to this Agreement, and in no event shall the Company be required to
reduce or limit the number of newly issued shares of its Common Stock to be
covered by any registration statement for the purpose of permitting the
Registrable Securities of any Holder to be included in the registration.
2.2 Expenses of Registration. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
this Agreement shall be borne by the Company, and all Selling Expenses shall be
borne by the Holders of the securities so registered shall be borne
proportionately on the basis of the number of their shares so registered;
provided, however, that a Holder shall reimburse the Company for any
Registration Expenses attributable to such Holder's Requested Securities if such
Holder requests the withdrawal of a request for registration.
2.3 Registration Procedures. In the case of each registration
effected by the Company pursuant to this Agreement, the Company will keep the
Holders, as applicable, advised in writing as to the initiation of each
registration and as to the completion thereof. The Company alone shall determine
and control all decisions concerning any registration of the Company's
securities which might give rise to the registration rights granted in this
Agreement, including any registration in which Shares of any Holders of
Registrable Securities are to be included. The Company's exclusive right to make
decisions shall include, without limitation, the decision as to whether to use
underwriters, the selection of underwriters and arrangements therewith, the
size, timing and other terms of any offering, the provisions of the registration
statements and prospectuses and all supplements and amendments thereto, the
selection of accountants and attorneys for the Company, and the states in which
the sale of Shares shall occur and be registered or qualified for sale. At its
expense, the Company will:
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(a) keep such registration effective for a period of ninety (90)
days or until the Holders, as applicable, have completed the distribution
described in the registration statement relating thereto, whichever first
occurs;
(b) prepare and file with the Commission such amendments and
post-effective amendments to the registration statement as may be necessary to
keep each registration statement effective for the applicable period, or such
shorter period which will terminate when all Registrable Securities covered by
such registration statement have been sold; cause each Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Act; and comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement during the applicable period in accordance with the
intended method or methods of distribution by the Holders thereof set forth in
such registration statement or supplement to the Prospectus; the Company shall
be deemed to have used its best efforts to keep a registration statement
effective during the applicable period if it voluntarily takes any action that
would result in selling holders of the Registrable Securities covered thereby
not being able to sell such Registrable Securities during that period if the
actions taken by the Company were in good faith and for valid business reasons,
including without limitation the acquisition or divestiture of assets, so long
as the Company promptly thereafter complies with the requirements of subsection
(f) of this Section 2.3, if applicable;
(c) notify the selling Holders of Registrable Securities
promptly, and (if requested by any such person or entity) confirm such advice in
writing, (i) when the Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to the registration statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the Commission for amendments or supplements to the registration
statement or the Prospectus or for additional information, (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
registration statement or the initiation of any proceedings for that purpose,
and (iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose;
(d) furnish to each selling Holder of Registrable Securities,
without charge, as many copies of the registration statement, Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such selling Holder of Registrable Securities may reasonably request;
(e) prior to any public offering of the Registrable Securities,
register or qualify or cooperate with the selling Holders of Registrable
Securities and their respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or "blue sky" laws of such jurisdictions as any seller reasonably
requests in writing, considering the amount of Registrable Securities proposed
to be sold in each such jurisdiction, and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the registration statement; provided that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it
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is not then so qualified or to take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject; and
(f) upon the occurrence of any event contemplated by subsection
(b) of this Section 2.3, prepare a supplement or post-effective amendment to the
registration statement or the related Prospectus or any document incorporated
therein by reference or file any other required document, if necessary, so that,
as thereafter delivered to the purchasers of the Registrable Securities, the
Prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading.
The Company may require each seller of Registrable Securities as to
which any Registration is being effected to furnish to the Company such
information regarding the proposed distribution of such securities as the
Company may from time to time reasonably request in writing.
Each Holder of Registrable Securities agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
subsections (c)(ii) through (c)(iv) of this Section 2.3, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to the
Registration Statement until such Holder's receipt of copies of the supplemented
or amended Prospectus as contemplated by subsection (f) of this Section 2.3, or
until it is advised in writing (the "Advice") by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus, and,
if so directed by the Company, such Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company shall
give any such notice, the time periods referred to in subsection (a) of this
Section 2.3, shall be extended by the number of days during the period from and
including the date of the giving of such notice to and including the date when
each seller of Registrable Securities covered by such Registration Statement
shall have received the copies of the supplemented or amended Prospectus
contemplated by subsection (f) of this Section 2.3 or the Advice.
2.4 Indemnification.
(a) The Company will indemnify each of the Holders, as
applicable, each of its officers, directors, partners, members and other
constituents, and each person controlling each of the Holders, with respect to
each registration which has been effected pursuant to this Agreement, against
all claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any registration statement, prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the Act or any rule
or regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each of the Holders, each of its
officers, directors, partners,
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members and other constituents and each person controlling each of the Holders
for any legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission based upon written information furnished to the
Company by the Holders and stated to be specifically for use therein.
(b) To the extent permitted by law, each of the Holders will, if
Registrable Securities held by it are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers and each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company or such underwriter within the meaning of the Act and the
rules and regulations thereunder, each other stockholder and each of their
officers, directors, partners, members and other constituents and each person
controlling such other stockholder against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other document
made by such Holder, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
by such Holder therein not misleading, and will reimburse the Company, other
stockholders, directors, officers, partners, persons, underwriters, members and
other constituents or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with information furnished to the Company by such Holder.
(c) Each party entitled to indemnification under this Section
2.4 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at such party's expense (unless the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which case the
fees and expenses of counsel shall be at the expense of the Indemnifying Party),
and provided, further, that the failure of any Indemnified Party to give notice
as provided herein shall not relieve the Indemnifying Party of its obligations
under this Agreement unless the Indemnifying Party is materially prejudiced
thereby. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably
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request in writing and as shall be reasonably required in connection with the
defense of such claim and litigation resulting therefrom.
(d) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with any underwritten public offering
contemplated by this Agreement are in conflict with the foregoing provisions,
the provisions in such underwriting agreement shall be controlling.
2.5 Information by the Holders. Each of the Holders holding
securities included in any registration shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Agreement.
2.6 "Market Stand-off" Agreement. Each of the Holders agrees, if
requested by the Company and an underwriter of Registrable Securities (or other
securities) of the Company, not to sell or otherwise transfer or dispose of any
Shares (or other securities) of the Company held by such Holder during a period
of up to 180 days following the effective date of a registration statement of
the Company filed under the Act. If requested by the underwriters, the Holders
shall execute a separate agreement to the foregoing effect. The Company may
impose stop-transfer instructions with respect to the shares (or securities)
subject to the foregoing restriction until the end of said 180-day period. The
provisions of this Section 2.6 shall be binding upon any transferee who acquires
Registrable Securities, whether or not such transferee is entitled to the
registration rights provided hereunder and Holder shall cause such transference
to be bound by such provisions.
2.7 Termination. The registration rights set forth in this
Agreement shall not be available to any Holder if, in the opinion of counsel to
the Company, all of the Registrable Securities then owned by such and at such
time as Holder could be sold in any one 90-day period pursuant to Rule 145 or
Rule 144 under the Act.
3. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
"Act": The United States Securities Act of 1933, as amended.
"Commission": The United States Securities and Exchange
Commission or any other federal agency at the time administering the Act.
"Company": As defined in the introductory paragraph of this
Agreement.
"Exchange Act": The United States Securities Exchange Act of
1934, as amended.
"Holders": As defined in the introductory paragraph of this
Agreement (each a "Holder").
"Indemnified Party": As defined in Section 2.4(c).
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"Indemnifying Party": As defined in Section 2.4(c).
"Person": A corporation, an association, a partnership, a
limited liability company, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.
"Prospectus": A part of a Registration.
"Register," "Registered" and "Registration": A registration
effected by preparing and filing a registration statement in compliance with the
Act (and any post-effective amendments filed or required to be filed) and the
declaration or ordering of effectiveness of such registration statement.
"Registrable Securities": (A) the Shares issued to the Investors
pursuant to the Merger Agreement, (B) any capital stock of the Company issued as
a dividend or other distribution with respect to, or in exchange for or in
replacement of, the shares referred to in clause (A).
"Registration Expenses": All expenses incurred by the Company in
compliance with Sections 2.1 hereof, including, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company, which shall
be paid in any event by the Company). Registration Expenses shall not include
any Selling Expenses or other expenses of Holders applicable to such Registrable
Securities.
"Selling Expenses": All underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel and accountants for each of the Holders, filing fees
and any transfer or other taxes applicable to such Registrable Securities and
any other expenses incurred by the Investors applicable to the sale of
Registrable Securities.
"Shares": The shares of Common Stock, par value $0.01 per share,
of the Company.
4. Amendments. This Agreement may not be amended without the prior
written consent of all parties.
5. Notices. All communications provided for hereunder shall be sent by
first-class mail and (a) if addressed to a Holder, at the address of such Holder
as it appears in the Company's current record of Stockholders or as shall have
been furnished in writing to the Company, or (b) if addressed to the Company, at
2830 Barrett Avenue, P.O. Box 1240, Perris, California 92572, attention, Evan M.
Gruber or to such other address as the Company shall have furnished to the
Holders.
6. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and assigns; provided, however, that Holders may only assign this
Agreement to members of their respective immediate family, or a trust or such
other entity for the benefit of such family member, solely for estate planning
purposes.
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7. Descriptive Headings. The descriptive headings of the several
sections of this Agreement are inserted for reference only and shall not limit
or otherwise affect the meaning hereof.
8. Amendment and Waiver. This Agreement may not be amended or waived
except in a writing executed by the party against which such amendment or waiver
is sought to be enforced. No course of dealing between or among any persons
having any interest in this Agreement shall be deemed effective to modify or
amend any part of this Agreement or any rights or obligations of any person
under or by reason of this Agreement.
9. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
10. Complete Agreement. This Agreement contains the complete agreement
between the parties and supersede any prior understandings, agreements or
representations by or between the parties, written or oral, which may have
related to the subject matter hereof in any way.
11. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Delaware without giving effect to conflicts of law principles
thereof.
12. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which counterparts shall
together constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers hereunto duly authorized as
of the date first above written.
MODTECH HOLDINGS, INC. THE MODTECH STOCKHOLDERS:
By: ________________________________ ____________________________________
Name:
Title: ____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
THE SPI STOCKHOLDERS:
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
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SCHEDULE A
SCHEDULE OF MODTECH STOCKHOLDERS
Gerald B. Bashaw
Evan M. Gruber
Michael G. Rhodes
Robert W. Campbell
James D. Goldenetz
Charles C. McGettigan
Daniel Donahoe
Myron A. Wick, III
Jon D. Gruber
J. Patterson McBaine
Gruber & McBaine Capital Management
Platinum Partners, L.P.
Proactive Partners, L.P.
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SCHEDULE B
SCHEDULE OF SPI STOCKHOLDERS
Infrastructure and Environmental Private Equity Fund III, L.P.
Environmental & Information Technology Private Equity Fund III
Argentum Capital Partners II, L.P.
Patrick Van Den Bossche
NationsCredit Commercial Corporation
Ronald West
Capital Resources Growth, Inc.
Charles R. Gwirtsman & Nancy J. Reichman
Nancy J. Reichman
Nancy J. Reichman, Custodian for Daniel L. Gwirtsman
Nancy J. Reichman, Custodian for Andrew J. Gwirtsman
Mark M. King
Brenda K. King
MBK Children's Trust
Mark M. King Trust
Brenda K. King Trust
Bruce L. Rogers and Sally K. Rogers, Ten in Common
Sally K. Rogers Trust
Rogers Family Trust
Christopher J. Lane
Lee W. Dines
Mathers Associates
Skippack Partners
CRL, Inc.
Chuck Hamilton
The DGP Trust
The RRP Trust
Ron Procunier