REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of
the
day
of ,
2007,
by and among: Industrial Services Acquisition Corp., a Delaware corporation
(the
“Company”); and the undersigned parties listed under Investors on the signature
page hereto (each, an “Investor” and collectively, the
“Investors”).
WHEREAS,
the Investors currently hold all of the issued and outstanding securities of
the
Company;
WHEREAS,
the Investors and the Company desire to enter into this Agreement to provide
the
Investors with certain rights relating to the registration of shares of Common
Stock held by them;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS.
The
following capitalized terms used herein have the following
meanings:
“Agreement”
means
this Agreement, as amended, restated, supplemented, or otherwise modified from
time to time.
“Commission”
means
the Securities and Exchange Commission, or any other federal agency then
administering the Securities Act or the Exchange Act.
“Common
Stock”
means
the common stock, par value $0.0001 per share, of the Company.
“Company”
is
defined in the preamble to this Agreement.
“Demand
Registration”
is
defined in Section 2.1.1.
“Demanding
Holder”
is
defined in Section 2.1.1.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder, all as the same shall be in effect
at
the time.
“Form
S-3”
is
defined in Section 2.3.
“Indemnified
Party”
is
defined in Section 4.3.
“Indemnifying
Party”
is
defined in Section 4.3.
“Investor”
is
defined in the preamble to this Agreement.
“Investor
Indemnified Party”
is
defined in Section 4.1.
“Maximum
Number of Shares”
is
defined in Section 2.1.4.
“Notices”
is
defined in Section 6.3.
“Piggy-Back
Registration”
is
defined in Section 2.2.1.
“Purchase
Option”
means
the option to purchase 200,000 units (each consisting of one share of common
stock and one warrant) issued to Maxim Group LLC or its designees in connection
with the Company’s initial public offering.
“Register,”
“registered”
and
“registration”
mean
a
registration effected by preparing and filing a registration statement or
similar document in compliance with the requirements of the Securities Act,
and
the applicable rules and regulations promulgated thereunder, and such
registration statement becoming effective.
“Registrable
Securities”
mean
all of the shares of Common Stock owned or held by Investors. Registrable
Securities include any warrants, shares of capital stock or other securities
of
the Company issued as a dividend or other distribution with respect to or in
exchange for or in replacement of such shares of Common Stock. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when: (a) a Registration Statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been sold, transferred, disposed of or exchanged in
accordance with such Registration Statement; (b) such securities shall have
been
otherwise transferred pursuant to Rule 144 of the Securities Act (or any similar
provisions thereunder, but not Rule 144A), new certificates for them not bearing
a legend restricting further transfer shall have been delivered by the Company
and subsequent public distribution of them shall not require registration under
the Securities Act; (c) such securities shall have ceased to be outstanding,
or
(d) the Securities and Exchange Commission makes a definitive determination
to
the Company that the Registrable Securities are salable under Rule
144(k).
“Registration
Statement”
means
a
registration statement filed by the Company with the Commission in compliance
with the Securities Act and the rules and regulations promulgated thereunder
for
a public offering and sale of Common Stock (other than a registration statement
on Form S-4 or Form S-8, or their successors, or any registration statement
covering only securities proposed to be issued in exchange for securities or
assets of another entity).
“Release
Date”
means
the date on which shares of Common Stock are disbursed from escrow pursuant
to
Section 3 of that certain Stock Escrow Agreement dated as of __________, 2007
by
and among the parties hereto and Continental Stock Transfer & Trust
Company.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.
“Underwriter”
means
a
securities dealer who purchases any Registrable Securities as principal in
an
underwritten offering and not as part of such dealer’s market-making
activities.
2.
REGISTRATION RIGHTS.
2.1 Demand
Registration.
2.1.2. Effective
Registration.
A
registration will not count as a Demand Registration until the Registration
Statement filed with the Commission with respect to such Demand Registration
has
been declared effective and the Company has complied with all of its obligations
under this Agreement with respect thereto;
provided,
however,
that
if, after such Registration Statement has been declared effective, the offering
of Registrable Securities pursuant to a Demand Registration is interfered with
by any stop order or injunction of the Commission or any other governmental
agency or court, the Registration Statement with respect to such Demand
Registration will be deemed not to have been declared effective, unless and
until, (i) such stop order or injunction is removed, rescinded or otherwise
terminated, and (ii) a majority-in-interest of the Demanding Holders thereafter
elect to continue the offering; provided,
further,
that
the Company shall not be obligated to file a second Registration Statement
until
a Registration Statement that has been filed is counted as a Demand Registration
or is terminated.
2.1.3. Underwritten
Offering.
If a
majority-in-interest of the Demanding Holders so elect and such holders so
advise the Company as part of their written demand for a Demand Registration,
the offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of an underwritten offering. In such event, the right
of
any holder to include its Registrable Securities in such registration 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. All Demanding Holders proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with the Underwriter or Underwriters selected for such
underwriting by a majority-in-interest of the holders initiating the Demand
Registration.
2.1.4. Reduction
of Offering.
If the
managing Underwriter or Underwriters for a Demand Registration that is to be
an
underwritten offering advises the Company and the Demanding Holders in writing
that the dollar amount or number of shares of Registrable Securities which
the
Demanding Holders desire to sell, taken together with all other shares of Common
Stock or other securities which the Company desires to sell and the shares
of
Common Stock, if any, as to which registration has been requested pursuant
to
written contractual piggy-back registration rights held by other shareholders
of
the Company who desire to sell, exceeds the maximum dollar amount or maximum
number of shares that can be sold in such offering without adversely affecting
the proposed offering price, the timing, the distribution method, or the
probability of success of such offering (such maximum dollar amount or maximum
number of shares, as applicable, the “Maximum
Number of Shares”),
then
the Company shall include in such registration: (i) first, the Registrable
Securities as to which Demand Registration has been requested by the Demanding
Holders (pro
rata
in
accordance with the number of shares of Registrable Securities which such
Demanding Holder has requested be included in such registration, regardless
of
the number of shares of Registrable Securities held by each Demanding Holder)
that can be sold without exceeding the Maximum Number of Shares; (ii) second,
to
the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (i), the shares of Common Stock or other securities that the
Company desires to sell that can be sold without exceeding the Maximum Number
of
Shares; (iii) third, to the extent that the Maximum Number of Shares has not
been reached under the foregoing clauses (i) and (ii), the shares of Common
Stock for the account of other persons that the Company is obligated to register
pursuant to written contractual arrangements with such persons and that can
be
sold without exceeding the Maximum Number of Shares; and (v) fourth, to the
extent that the Maximum Number of Shares have not been reached under the
foregoing clauses (i), (ii), and (iii), the shares of Common Stock that other
shareholders desire to sell that can be sold without exceeding the Maximum
Number of Shares.
2.1.5. Withdrawal.
If a
majority-in-interest of the Demanding Holders disapprove of the terms of any
underwriting or are not entitled to include all of their Registrable Securities
in any offering, such majority-in-interest of the Demanding Holders may elect
to
withdraw from such offering by giving written notice to the Company and the
Underwriter or Underwriters of their request to withdraw prior to the
effectiveness of the Registration Statement filed with the Commission with
respect to such Demand Registration. In such event, the Company need not seek
effectiveness of such Registration Statement for the benefit of other Investors.
If the majority-in-interest of the Demanding Holders withdraws from a proposed
offering relating to a Demand Registration, then such registration shall not
count as a Demand Registration provided for in Section 2.1.1.
2.2 Piggy-Back
Registration.
2.2.1. Piggy-Back
Rights.
If at
any time on or after the Release Date the Company proposes to file a
Registration Statement under the Securities Act with respect to an offering
of
equity securities, or securities or other obligations exercisable or
exchangeable for, or convertible into, equity securities, by the Company for
its
own account or for shareholders of the Company for their accounts (or by the
Company and by shareholders of the Company including, without limitation,
pursuant to Section 2.1), other than a Registration Statement (i) filed in
connection with any employee stock option or other benefit plan, (ii) for an
exchange offer or offering of securities solely to the Company’s existing
shareholders, (iii) for an offering of debt that is convertible into equity
securities of the Company or (iv) for a dividend reinvestment plan, then the
Company shall (x) give written notice of such proposed filing to the holders
of
Registrable Securities as soon as practicable but in no event less than ten
(10)
days before the anticipated filing date, which notice shall describe the amount
and type of securities to be included in such offering, the intended method(s)
of distribution, and the name of the proposed managing Underwriter or
Underwriters, if any, of the offering, and (y) offer to the holders of
Registrable Securities in such notice the opportunity to register the sale
of
such number of shares of Registrable Securities as such holders may request
in
writing within fifteen (15) days following receipt of such notice (a
“Piggy-Back
Registration”).
The
Company shall cause such Registrable Securities to be included in such
registration and shall use its best efforts to cause the managing Underwriter
or
Underwriters of a proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggy-Back Registration to be included
on the same terms and conditions as any similar securities of the Company and
to
permit the sale or other disposition of such Registrable Securities in
accordance with the intended method(s) of distribution thereof. All holders
of
Registrable Securities proposing to distribute their securities through a
Piggy-Back Registration that involves an Underwriter or Underwriters shall
enter
into an underwriting agreement in customary form with the Underwriter or
Underwriters selected for such Piggy-Back Registration.
2.2.2. Reduction
of Offering.
If the
managing Underwriter or Underwriters for a Piggy-Back Registration that is
to be
an underwritten offering advises the Company and the holders of Registrable
Securities in writing that the dollar amount or number of shares of Common
Stock
which the Company desires to sell, taken together with shares of Common Stock,
if any, as to which registration has been demanded pursuant to written
contractual arrangements with persons other than the holders of Registrable
Securities hereunder, the Registrable Securities as to which registration has
been requested under this Section 2.2, and the shares of Common Stock, if any,
as to which registration has been requested pursuant to the written contractual
piggy-back registration rights of other shareholders of the Company, exceeds
the
Maximum Number of Shares, then the Company shall include in any such
registration:
(i)
If the
registration is undertaken for the Company’s account: (A) first, the shares of
Common Stock or other securities that the Company desires to sell that can
be
sold without exceeding the Maximum Number of Shares; (B) second, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clause (A), the shares of Common Stock, if any, including the Registrable
Securities, as to which registration has been requested pursuant to written
contractual piggy-back registration rights of security holders (pro rata in
accordance with the number of shares of Common Stock which each such person
has
actually requested to be included in such registration, regardless of the number
of shares of Common Stock with respect to which such persons have the right
to
request such inclusion) that can be sold without exceeding the Maximum Number
of
Shares; and
(ii)
If the
registration is a “demand” registration undertaken at the demand of persons
other than the holders of Registrable Securities pursuant to written contractual
arrangements with such persons, (A) first, the shares of Common Stock for the
account of the demanding persons that can be sold without exceeding the Maximum
Number of Shares; (B) second, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clause (A), the shares of Common Stock
or other securities that the Company desires to sell that can be sold without
exceeding the Maximum Number of Shares; and (C) third, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clauses (A)
and (B), the Registrable Securities as to which registration has been requested
under this Section 2.2 (pro
rata
in
accordance with the number of shares of Registrable Securities held by each
such
holder); and (D) fourth, to the extent that the Maximum Number of Shares has
not
been reached under the foregoing clauses (A), (B) and (C), the shares of Common
Stock, if any, as to which registration has been requested pursuant to written
contractual piggy-back
registration rights which other shareholders desire to sell that can be sold
without exceeding the Maximum Number of Shares.
2.2.3. Withdrawal.
Any
holder of Registrable Securities may elect to withdraw such holder’s request for
inclusion of Registrable Securities in any Piggy-Back Registration by giving
written notice to the Company of such request to withdraw prior to the
effectiveness of the Registration Statement. The Company may also elect to
withdraw a registration statement at any time prior to the effectiveness of
the
Registration Statement. Notwithstanding any such withdrawal, the Company shall
pay all expenses incurred by the holders of Registrable Securities in connection
with such Piggy-Back Registration as provided in Section 3.3.
2.3 Registrations
on Form S-3.
The
holders of Registrable Securities may at any time and from time to time after
the Release Date, request in writing that the Company register the resale of
any
or all of such Registrable Securities on Form S-3 or any similar short-form
registration which may be available at such time (“Form
S-3”);
provided,
however,
that
the Company shall not be obligated to effect such request through an
underwritten offering. Upon receipt of such written request, the Company will
promptly give written notice of the proposed registration to all other holders
of Registrable Securities, and, as soon as practicable thereafter, effect the
registration of all or such portion of such holder’s or holders’ Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any other holder or holders joining in such
request as are specified in a written request given within fifteen (15) days
after receipt of such written notice from the Company; provided,
however,
that
the Company shall not be obligated to effect any such registration pursuant
to
this Section 2.3: (i) if Form S-3 is not available for such offering; or (ii)
if
the holders of the Registrable Securities, together with the holders of any
other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at
any
aggregate price to the public of less than $500,000. Registrations effected
pursuant to this Section 2.3 shall not be counted as Demand Registrations
effected pursuant to Section 2.1.
3.
REGISTRATION PROCEDURES.
3.1 Filings;
Information.
Whenever the Company is required to effect the registration of any Registrable
Securities pursuant to Section 2, the Company shall use its best efforts to
effect the registration and sale of such Registrable Securities in accordance
with the intended method(s) of distribution thereof as expeditiously as
practicable, and in connection with any such request:
3.1.1. Filing
Registration Statement.
The
Company shall, as expeditiously as possible and in any event within sixty (60)
days after receipt of a request for a Demand Registration pursuant to Section
2.1, prepare and file with the Commission a Registration Statement on any form
for which the Company then qualifies or which counsel for the Company shall
deem
appropriate and which form shall be available for the sale of all Registrable
Securities to be registered thereunder in accordance with the intended method(s)
of distribution thereof, and shall use its best efforts to cause such
Registration Statement to become and remain effective for the period required
by
Section 3.1.3; provided,
however,
that
the Company shall have the right to defer any Demand Registration for up to
thirty (30) days, and
any
Piggy-Back Registration for such period as may be applicable to deferment of
any
demand registration to which such Piggy-Back Registration relates, in each
case
if the Company shall furnish to the holders a certificate signed by the Chief
Executive Officer of the Company stating that, in the good faith judgment of
the
Board of Directors of the Company, it would be materially detrimental to the
Company and its shareholders for such Registration Statement to be effected
at
such time; provided further,
however,
that
the Company shall not have the right to exercise the right set forth in the
immediately preceding proviso more than once in any 365-day period in respect
of
a Demand Registration hereunder.
3.1.2. Copies.
The
Company shall, prior to filing a Registration Statement or prospectus, or any
amendment or supplement thereto, furnish without charge to the holders of
Registrable Securities included in such registration, and such holders’ legal
counsel, copies of such Registration Statement as proposed to be filed, each
amendment and supplement to such Registration Statement (in each case including
all exhibits thereto and documents incorporated by reference therein), the
prospectus included in such Registration Statement (including each preliminary
prospectus), and such other documents as the holders of Registrable Securities
included in such registration or legal counsel for any such holders may request
in order to facilitate the disposition of the Registrable Securities owned
by
such holders.
3.1.3. Amendments
and Supplements.
The
Company shall prepare and file with the Commission such amendments, including
post-effective amendments, and supplements to such Registration Statement and
the prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective and in compliance with the provisions of the
Securities Act until all Registrable Securities and other securities covered
by
such Registration Statement have been disposed of in accordance with the
intended method(s) of distribution set forth in such Registration Statement
(which period shall not exceed the sum of one hundred eighty (180) days plus
any
period during which any such disposition is interfered with by any stop order
or
injunction of the Commission or any governmental agency or court) or such
securities have been withdrawn.
3.1.4. Notification.
After
the filing of a Registration Statement, the Company shall promptly, and in
no
event more than two (2) business days after such filing, notify the holders
of
Registrable Securities included in such Registration Statement of such filing,
and shall further notify such holders promptly and confirm such advice in
writing in all events within two (2) business days of the occurrence of any
of
the following: (i) when such Registration Statement becomes effective; (ii)
when
any post-effective amendment to such Registration Statement becomes effective;
(iii) the issuance or threatened issuance by the Commission of any stop order
(and the Company shall take all actions required to prevent the entry of such
stop order or to remove it if entered); and (iv) any request by the Commission
for any amendment or supplement to such Registration Statement or any prospectus
relating thereto or for additional information or of the occurrence of an event
requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of the securities covered by
such Registration Statement, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to
be
stated therein or necessary to make the statements therein not misleading,
and
promptly make available to the holders of Registrable Securities included in
such Registration Statement any such supplement or amendment; except that before
filing with the Commission a Registration Statement or
prospectus or any amendment or supplement thereto, including documents
incorporated by reference, the Company shall furnish to the holders of
Registrable Securities included in such Registration Statement and to the legal
counsel for any such holders, copies of all such documents proposed to be filed
sufficiently in advance of filing to provide such holders and legal counsel
with
a reasonable opportunity to review such documents and comment thereon, and
the
Company shall not file any Registration Statement or prospectus or amendment
or
supplement thereto, including documents incorporated by reference, to which
such
holders or their legal counsel shall reasonably object.
3.1.5. State
Securities Laws Compliance.
The
Company shall use its best efforts to (i) register or qualify the Registrable
Securities covered by the Registration Statement under such securities or “blue
sky” laws of such jurisdictions in the United States as the holders of
Registrable Securities included in such Registration Statement (in light of
their intended plan of distribution) may request and (ii) take such action
necessary to cause such Registrable Securities covered by the Registration
Statement to be registered with or approved by such other Governmental
Authorities as may be necessary by virtue of the business and operations of
the
Company and do any and all other acts and things that may be necessary or
advisable to enable the holders of Registrable Securities included in such
Registration Statement to consummate the disposition of such Registrable
Securities in such jurisdictions; provided,
however,
that
the Company shall not be required to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (e) or subject itself to taxation in any such
jurisdiction.
3.1.6. Agreements
for Disposition.
The
Company shall enter into customary agreements (including, if applicable, an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities. The representations, warranties and covenants of the
Company in any underwriting agreement which are made to or for the benefit
of
any Underwriters, to the extent applicable, shall also be made to and for the
benefit of the holders of Registrable Securities included in such registration
statement. No holder of Registrable Securities included in such registration
statement shall be required to make any representations or warranties in the
underwriting agreement except, if applicable, with respect to such holder’s
organization, good standing, authority, title to Registrable Securities, lack
of
conflict of such sale with such holder’s material agreements and organizational
documents, and with respect to written information relating to such holder
that
such holder has furnished in writing expressly for inclusion in such
Registration Statement. Holders of Registrable Securities shall agree to such
covenants and indemnification and contribution obligations for selling
stockholders as are customarily contained in agreements of that type. Further,
such holders shall cooperate fully in the preparation of the registration
statement and other documents relating to any offering in which they include
securities pursuant to Section 2 hereof. Each holder shall also furnish to
the
Company such information regarding itself, the Registrable Securities held
by
such holder and the intended method of disposition of such securities as shall
be reasonably required to effect the registration of the Registrable
Securities.
3.1.7. Cooperation.
The
principal executive officer of the Company, the principal financial officer
of
the Company, the principal accounting officer of the Company and all other
officers and members of the management of the Company shall cooperate fully
in
any offering of Registrable Securities hereunder, which cooperation shall
include, without limitation, the preparation of the Registration Statement
with
respect to such offering and all other offering materials and related documents,
and participation in meetings with Underwriters, attorneys, accountants and
potential investors.
3.1.8. Records.
The
Company shall make available for inspection by the holders of Registrable
Securities included in such Registration Statement, any Underwriter
participating in any disposition pursuant to such registration statement and
any
attorney, accountant or other professional retained by any holder of Registrable
Securities included in such Registration Statement or any Underwriter, all
financial and other records, pertinent corporate documents and properties of
the
Company, as shall be necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors and employees to
supply all information reasonably requested by any of them in connection with
such Registration Statement.
3.1.9. Opinions
and Comfort Letters.
The
Company shall furnish to each holder of Registrable Securities included in
any
Registration Statement a signed counterpart, addressed to such holder, of (i)
any opinion of counsel to the Company delivered to any Underwriter and (ii)
any
comfort letter from the Company’s independent public accountants delivered to
any Underwriter. In the event no legal opinion is delivered to any Underwriter,
the Company shall furnish to each holder of Registrable Securities included
in
such Registration Statement, at any time that such holder elects to use a
prospectus, an opinion of counsel to the Company to the effect that the
Registration Statement containing such prospectus has been declared effective
and that no stop order is in effect.
3.1.10. Earnings
Statement.
The
Company shall comply with all applicable rules and regulations of the Commission
and the Securities Act, and make available to its shareholders, as soon as
practicable, an earnings statement covering a period of twelve (12) months,
beginning within three (3) months after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder.
3.1.11. Listing.
The
Company shall use its best efforts to cause all Registrable Securities included
in any registration to be listed on such exchanges or otherwise designated
for
trading in the same manner as similar securities issued by the Company are
then
listed or designated or, if no such similar securities are then listed or
designated, in a manner satisfactory to the holders of a majority of the
Registrable Securities included in such registration.
3.2 Obligation
to Suspend Distribution.
Upon
receipt of any notice from the Company of the happening of any event of the
kind
described in Section 3.1.4(iv), or, in the case of a resale registration on
Form
S-3 pursuant to Section 2.3 hereof, upon any suspension by the Company, pursuant
to a written xxxxxxx xxxxxxx compliance program adopted by the Company’s Board
of Directors, of the ability of all “insiders” covered by such program to
transact in the Company’s securities because of the existence of material
non-public information, each holder of Registrable Securities included in any
registration shall immediately discontinue disposition of such Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such holder receives the supplemented or amended prospectus
contemplated by Section 3.1.4(iv) or the restriction on the ability of
“insiders” to transact in the Company’s securities is removed, as applicable,
and, if so directed by the Company, each such holder will deliver to the Company
all copies, other than permanent file copies then in such holder’s possession,
of the most recent prospectus covering such Registrable Securities at the time
of receipt of such notice.
3.4 Information.
The
holders of Registrable Securities shall provide such information as may
reasonably be requested by the Company, or the managing Underwriter, if any,
in
connection with the preparation of any Registration Statement, including
amendments and supplements thereto, in order to effect the registration of
any
Registrable Securities under the Securities Act pursuant to Section 2 and in
connection with the Company’s obligation to comply with federal and applicable
state securities laws.
3.5 Holder
Obligations.
No
holder of Registrable Securities may participate in any underwritten offering
pursuant to this Section 3 unless such holder (i) agrees to sell only such
holder’s Registrable Securities on the basis reasonably provided in any
underwriting agreement, and (ii) completes, executes and delivers any and all
questionnaires, powers of attorney, custody agreements, indemnities,
underwriting agreements and other documents reasonably required by or under
the
terms of any underwriting agreement or as reasonably requested by the
Company.
4.
INDEMNIFICATION AND CONTRIBUTION.
4.1 Indemnification
by the Company.
The
Company agrees to indemnify and hold harmless each Investor and each other
holder of Registrable Securities, and each of their respective officers,
employees, affiliates, directors, partners, members, attorneys and agents,
and
each person, if any, who controls an Investor and each other holder of
Registrable Securities (within the meaning of Section 15 of the Securities
Act
or Section 20 of the Exchange Act) (each, an “Investor
Indemnified Party”),
from
and against any expenses, losses, judgments, claims, damages or liabilities,
whether joint or several, arising out of or based upon any untrue statement
(or
allegedly untrue statement) of a material fact contained in any Registration
Statement under which the sale of such Registrable Securities was registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment
or
supplement to such Registration Statement, or arising out of or based upon
any
omission (or alleged omission) to state 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 Securities Act or any rule or regulation
promulgated thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration; and the Company shall promptly
reimburse the Investor Indemnified Party for any legal and any other expenses
reasonably incurred by such Investor Indemnified Party in connection with
investigating and defending any such expense, loss, judgment, claim, damage,
liability or action; provided,
however,
that
(a) the Company will not be liable in any such case to the extent that any
such
expense, loss, claim, damage or liability arises out of or is based upon any
untrue statement or allegedly untrue statement or omission or alleged omission
made in such Registration Statement, preliminary prospectus, final prospectus,
or summary prospectus, or any such amendment or supplement, in reliance upon
and
in conformity with information furnished to the Company, in writing, by such
selling holder expressly for use therein; and (b) the foregoing indemnity shall
not inure to the benefit of any holder (or benefit of any person controlling
such holder) from whom the person asserting such expense, loss, claim, damage
or
liability purchased the Registrable Securities, if a copy of the Prospectus
(as
then amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of such holder
to
such person, if required by law so to have been delivered at or prior to the
written confirmation of the sale of the Registrable Securities to such person,
and if the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such expense, loss, claim, damage or liability, unless
such failure is the result of noncompliance by the Company with Section 3.1.3
hereof. The Company also shall indemnify any Underwriter of the Registrable
Securities, their officers, employees, affiliates, directors, partners, members,
attorneys and agents and each person who controls such Underwriter on
substantially the same basis as that of the indemnification provided above
in
this Section 4.1.
4.2 Indemnification
by Holders of Registrable Securities.
Each
selling holder of Registrable Securities will, in the event that any
registration is being effected under the Securities Act pursuant to this
Agreement of any Registrable Securities held by such selling holder, indemnify
and hold harmless the Company, each of its directors and officers and each
underwriter (if any), and each other person, if any, who controls such selling
holder or such underwriter within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, against any losses, claims, judgments,
damages or liabilities, whether joint or several, insofar as such losses,
claims, judgments, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or allegedly untrue statement
of a
material fact contained in any Registration Statement under which the sale
of
such Registrable Securities was registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained in
the
Registration Statement, or any amendment or supplement to the Registration
Statement, or arise out of or are based upon any omission or the alleged
omission to state a material fact required to be stated therein or necessary
to
make the statement therein not misleading, if the statement or omission was
made
in reliance upon and in conformity with information furnished in writing to
the
Company by such selling holder expressly for use therein, and shall reimburse
the Company, its directors and officers, and each such controlling person for
any legal or other expenses reasonably incurred by any of them in connection
with investigation or defending any such loss, claim, damage, liability or
action. Each selling holder’s indemnification obligations hereunder shall be
several and not joint and shall be limited to the amount of any net proceeds
actually received by such selling holder in connection with the sale of the
Registrable Securities by such selling holder pursuant to the Registration
Statement containing such untrue statement or allegedly untrue
statement.
4.3 Conduct
of Indemnification Proceedings.
Promptly after receipt by any person of any notice of any loss, claim, damage
or
liability or any action in respect of which indemnity may be sought pursuant
to
Section 4.1 or 4.2, such person (the “Indemnified
Party”)
shall,
if a claim in respect thereof is to be made against any other person for
indemnification hereunder, promptly notify such other person (the “Indemnifying
Party”)
in
writing of the loss, claim, judgment, damage, liability or action; provided,
however,
that
the failure by the Indemnified Party to notify the Indemnifying Party shall
not
relieve the Indemnifying Party from any liability which the Indemnifying Party
may have to such Indemnified Party hereunder, except and solely to the extent
the Indemnifying Party is actually materially prejudiced by such failure. If
the
Indemnified Party is seeking indemnification with respect to any claim or action
brought against the
Indemnified Party, then the Indemnifying Party shall be entitled to participate
in such claim or action, and, to the extent that it elects, jointly with all
other Indemnifying Parties, to assume control of the defense thereof with
counsel satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume control
of
the defense of such claim or action, the Indemnifying Party shall not be liable
to the Indemnified Party for any legal or other expenses subsequently incurred
by the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided,
however,
that in
any action in which both the Indemnified Party and the Indemnifying Party are
named as defendants, the Indemnified Party shall have the right to employ
separate counsel (but no more than one such separate counsel) to represent
the
Indemnified Party and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees and expenses
of
such counsel to be paid by such Indemnifying Party if, based upon the written
opinion of counsel of such Indemnified Party, representation of both parties
by
the same counsel would be inappropriate due to actual or potential differing
interests between them. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, consent to entry of judgment or effect any
settlement of any claim or pending or threatened proceeding in respect of which
the Indemnified Party is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Party, unless such judgment or
settlement includes an unconditional release of such Indemnified Party from
all
liability arising out of such claim or proceeding.
4.4 Contribution.
4.4.1.
If the
indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3 is
unavailable to any Indemnified Party in respect of any loss, claim, damage,
liability or action referred to herein, then each such Indemnifying Party,
in
lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid
or payable by such Indemnified Party as a result of such loss, claim, damage,
liability or action in such proportion as is appropriate to reflect the relative
benefits received by the Indemnified Parties and the Indemnifying Parties from
the offering, if, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the Indemnified Party failed
to give the notice required under Section 4.3 above, then each Indemnifying
Party shall contribute to such amount paid or payable by such Indemnified Party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Indemnified Parties and the Indemnifying
Parties in connection with the actions or omissions which resulted in such
loss,
claim, damage, liability or action, as well as any other relevant equitable
considerations. The relative fault of any Indemnified Party and any Indemnifying
Party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such
Indemnified Party or such Indemnifying Party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
4.4.2.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.4 were determined by pro
rata
allocation or by any other method of allocation which does not take account
of
the equitable considerations referred to in the immediately preceding Section
4.4.1. The amount paid or payable by an Indemnified Party as a result of any
loss, claim, damage, liability or action referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations
set
forth above, any legal or other expenses incurred by such Indemnified Party
in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, no holder of Registrable
Securities shall be required to contribute any amount in excess of the dollar
amount
of the
net proceeds (after payment of any underwriting fees, discounts, commissions
or
taxes) actually received by such holder from the sale of Registrable Securities
which gave rise to such contribution obligation. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
5.
UNDERWRITING AND DISTRIBUTION.
5.1 Rule
144.
The
Company covenants that it shall file any reports required to be filed by it
under the Securities Act and the Exchange Act and shall take such further action
as the holders of Registrable Securities may reasonably request, all to the
extent required from time to time to enable such holders to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act, as such Rules
may be amended from time to time, or any similar Rule or regulation (but not
Rule 144A) hereafter adopted by the Commission.
6.
MISCELLANEOUS.
6.1 Other
Registration Rights.
The
Company represents and warrants that, with the exception of shares issuable
pursuant to the Purchase Option, no person, other than a holder of the
Registrable Securities, has any right to require the Company to register any
shares of the Company’s capital stock for sale or to include shares of the
Company’s capital stock in any registration filed by the Company for the sale of
shares of capital stock for its own account or for the account of any other
person.
6.2 Assignment;
No Third Party Beneficiaries.
This
Agreement and the rights, duties and obligations of the Company hereunder may
not be assigned or delegated by the Company in whole or in part. This Agreement
and the rights, duties and obligations of the holders of Registrable Securities
hereunder may be freely assigned or delegated by such holder of Registrable
Securities in conjunction with and to the extent of any transfer of Registrable
Securities by any such holder in accordance with applicable law. This Agreement
and the provisions hereof shall be binding upon and shall inure to the benefit
of each of the parties and their respective successors and the permitted assigns
of the Investor or holder of Registrable Securities or of any assignee of the
Investor or holder of Registrable Securities. This Agreement is not intended
to
confer any rights or benefits on any persons that are not party hereto other
than as expressly set forth in Article 4 and this Section 6.2.
6.3 Notices.
All
notices, demands, requests, consents, approvals or other communications
(collectively, “Notices”)
required or permitted to be given hereunder or which are given with respect
to
this Agreement shall be in writing and shall be personally served, delivered
by
reputable air courier service with charges prepaid, or transmitted by hand
delivery, telegram, telex or facsimile, addressed as set forth below, or to
such
other address as such party shall have specified most recently by written notice
provided in accordance with this Section 6.3. Notice shall be deemed given
on
the date of service or transmission if personally served or transmitted by
telegram, telex or facsimile; provided,
that if
such service or transmission is not on a business day or is after normal
business hours, then such notice shall be deemed given on the next business
day.
Notice otherwise sent as provided herein shall be deemed given on the next
business day following timely delivery of such notice to a reputable air courier
service with an order for next-day delivery.
|
|
|
|
0000
Xx Xxxxxxxx Xx.
|
|
|
Xxxxxx,
XX 00000
|
|
|
Attention:
Chief Executive Officer
|
|
|
|
|
|
with
a copy to:
|
|
|
|
|
|
Mintz,
Levin, Cohn, Ferris, Glovsky & Popeo P.C.
|
|
|
000
Xxxxx Xxxxxx, 00xx
Xxxxx
|
|
|
Xxx
Xxxx, XX 00000
|
|
|
Attn:
Xxxxxxx Xxxx, Esq.; and
|
|
|
|
|
|
Xxxxxxxxxx
Xxxxxxx PC
00
Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
Xxx Xxxxxx 00000
|
|
|
Attention:
Xxxxxx Xxxxxxxx, Esq.
|
|
|
|
|
|
To
an Investor, to:
|
|
|
|
|
|
Xxxx
Xxxxxx
0000
Xx Xxxxxxxx Xx.
Xxxxxx,
XX 00000
|
;
or
|
|
|
|
|
Xxxx
XxXxxxxx
0000
Xx Xxxxxxxx Xx.
Xxxxxx,
XX 00000
|
;
or
|
|
|
|
|
Xxxxx
Xxxxx
0000
Xx Xxxxxxxx Xx.
Xxxxxx,
XX 00000
|
;
or
|
|
|
|
|
Xxxxxx
X. Xxxxxxxxx
0000
Xx Xxxxxxxx Xx.
Xxxxxx,
XX 00000
|
;
or
|
|
Xxxxxxx
Xxxxxxxx
0000
Xx Xxxxxxxx Xx.
Xxxxxx,
XX 00000
|
;
or
|
|
Xxxxx
Xxxxxxxxx
0000
Xx Xxxxxxxx Xx.
Xxxxxx,
XX 00000
|
;
or
|
|
J. Xxxx
Xxxxxxxxx
0000
Xx Xxxxxxxx Xx.
Xxxxxx,
XX 00000
|
|
6.4
Severability.
This
Agreement shall be deemed severable, and the invalidity or unenforceability
of
any term or provision hereof shall not affect the validity or enforceability
of
this Agreement or of any other term or provision hereof. Furthermore, in lieu
of
any such invalid or unenforceable term or provision, the parties hereto intend
that there shall be added as a part of this Agreement a provision as similar
in
terms to such invalid or unenforceable provision as may be possible and be
valid
and enforceable.
6.5
Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, and all of which taken together shall constitute one and
the
same instrument.
6.6
Entire
Agreement.
This
Agreement (including all agreements entered into pursuant hereto and all
certificates and instruments delivered pursuant hereto and thereto) constitute
the entire agreement of the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements, representations,
understandings, negotiations and discussions between the parties, whether oral
or written.
6.7
Modifications
and Amendments.
No
amendment, modification or termination of this Agreement shall be binding upon
any party unless executed in writing by such party.
6.8
Titles
and Headings.
Titles
and headings of sections of this Agreement are for convenience only and shall
not affect the construction of any provision of this Agreement.
6.9
Waivers
and Extensions.
Any
party to this Agreement may waive any right, breach or default which such party
has the right to waive, provided
that
such waiver will not be effective against the waiving party unless it is in
writing, is signed by such party, and specifically refers to this Agreement.
Waivers may be made in advance or after the right waived has arisen or the
breach or default waived has occurred. Any waiver may be conditional. No waiver
of any breach of any agreement or provision herein contained shall be deemed
a
waiver of any preceding or succeeding breach thereof nor of any other agreement
or provision herein contained. No waiver or extension of time for performance
of
any obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.
6.10
Remedies
Cumulative.
In the
event that the Company fails to observe or perform any covenant or agreement
to
be observed or performed under this Agreement, the Investor or any other holder
of Registrable Securities may proceed to protect and enforce its rights by
suit
in equity or action at law, whether for specific performance of any term
contained in this Agreement or for an injunction against the breach of any
such
term or in aid of the exercise of any power granted in this Agreement or to
enforce any other legal or equitable right, or to take any one or more of such
actions, without being required to post a bond. None of the rights, powers
or
remedies conferred under this Agreement shall be mutually exclusive, and each
such right, power or remedy shall be cumulative and in addition to any other
right, power or remedy, whether conferred by this Agreement or now or hereafter
available at law, in equity, by statute or otherwise.
6.11
Governing
Law.
This
Agreement shall be governed by, interpreted under, and construed in accordance
with the internal laws of the State of New York applicable to agreements made
and to be performed within the State of New York, without giving effect to
any
choice-of-law provisions thereof that would compel the application of the
substantive laws of any other jurisdiction.
6.12
Waiver
of Trial by Jury.
Each
party hereby irrevocably and unconditionally waives the right to a trial by
jury
in any action, suit, counterclaim or other proceeding (whether based on
contract, tort or otherwise) arising out of, connected with or relating to
this
Agreement, the transactions contemplated hereby, or the actions of the Investor
in the negotiation, administration, performance or enforcement
hereof.
IN
WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to
be executed and delivered by their duly authorized representatives as of the
date first written above.
|
a
Delaware corporation
|
||
| |
|
|
| By: | ||
|
Xxxx
XxXxxxxx, Chief Executive Officer
|
||
|
INVESTORS:
|
||
|
Xxxx
Xxxxxx
|
||
|
Xxxx
XxXxxxxx
|
||
|
Xxxxx
Xxxxx
|
||
|
Xxxxxx
X. Xxxxxxxxx
|
||
|
Xxxxxxx
Xxxxxxxx
|
||
|
Xxxxxx X. Xxxxxxxxx |
||
|
J. Xxxx
Xxxxxxxxx
|
||
