EXHIBIT 10.5
NAVITAS INTERNATIONAL CORPORATION
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of ______
__, 2006 by and among (i) Navitas International Corporation, a Delaware
corporation (the "Company"), and (ii) the undersigned parties listed under
Investor 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 premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
1. DEFINITIONS. The following terms shall have the meanings provided
therefore below or elsewhere in this Agreement as described below:
"Agreement" means this Agreement, as amended, restated, supplemented, or
otherwise modified from time to time.
"Board" shall mean the board of directors of the Company.
"Common Stock" shall mean the Company's common stock, par value $0.001 per
share.
"Company" is defined in the Preamble to this Agreement.
"Deferral Period" shall having the meaning ascribed thereto in Section
2(e)(2) hereof.
"Demand Registration" shall have the meaning ascribed thereto in Section
2(a) hereof.
"Demanding Investors" shall have the meaning ascribed thereto in Section
2(d) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder, all as the same
shall be in effect at the time.
"Holders' Counsel" shall have the meaning ascribed thereto in Section 4(a)
hereof.
"Investor" is defined in the Preamble to this Agreement.
"Maximum Number of Shares" shall have the meaning ascribed thereto in
Section 2(d) hereof.
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"Person" shall mean an individual, partnership, limited liability company,
corporation, association, trust, joint venture, unincorporated organization, and
any government, governmental department or agency or political subdivision
thereof.
"Purchase Option" shall mean the Unit Purchase Option, dated as of ______,
2006, issued by the Company to FTN Midwest Securities Corp. and Xxxxx Xxxxxxxx.
"Purchase Option Shares" shall mean the units issuable pursuant to the
Purchase Option, the Common Stock and warrants included in such units and the
Common Stock issuable upon exercise of such warrants.
"Qualifying Investor" shall have the meaning ascribed thereto in Section 9
hereof.
"Register" "registered" and "registration" shall mean a registration
effected by preparing and filing a registration statement or similar document
under the Securities Act, and such registration statement becoming effective.
"Registrable Shares" shall mean, at the relevant time of reference
thereto, the Shares then held by the Investors (including any warrants or shares
of capital stock that were issued in respect thereof pursuant to a stock split,
stock dividend, recombination, reclassification or the like), provided, however,
that the term "Registrable Shares" shall not include any of the Shares that (i)
become eligible for resale without volume limitations pursuant to Rule 144, or
(ii) are sold pursuant to a registration statement that has been declared
effective under the Securities Act by the SEC.
"Registration Notice" shall have the meaning ascribed thereto in Section
2(a) hereof.
"Release Date" shall mean the date of the Business Combination.
"Rule 144" shall mean Rule 144 promulgated under the Securities Act and
any successor or substitute rule, law or provision.
"SEC" shall mean the U.S. Securities and Exchange Commission, or any other
federal agency then administering the Securities Act or the Exchange Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder, all as the same
shall be in effect at the time.
"Shares" shall mean shares of Common Stock.
"Stock Escrow Agreement" shall mean that certain Stock Escrow Agreement
among the Investors and [ ] dated as of _________ __, 2006.
"Temporary Suspension Period" shall have the meaning ascribed thereto in
Section 2(a) hereof.
"Withdrawal Period" shall having the meaning ascribed thereto in Section
2(e)(2) hereof.
"Underwriter" shall mean a securities dealer who purchases any Registrable
Shares as principal in an underwritten offering and not as part of such dealer's
market-making activities.
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2. DEMAND FORM S-3 REGISTRATION.
(a) Registration Upon Request; Limitations. If, at any time or from
time to time on or after the Release Date, the Company shall receive from any
Investor or Investors who hold at least fifty-one percent (51%) of the
Registrable Shares a written request or requests (a "Demand Notice") that the
Company effect a registration on Form S-3 (a "Demand Registration"), or any
successor or substitute form, with respect to all or a part of the Registrable
Shares owned by such Investor, then the Company will promptly give written
notice of the proposed registration and the Investor's or Investors' request
therefor to all other Investors ("Registration Notice"), and, as soon as
practicable, use commercially reasonable efforts to effect such registration of
all or such portion of such Investor's or Registrable Shares as are specified in
such request, together with all or such portion of the Registrable Shares of any
other Investor or Investors joining in such request as are specified in a
written request given within fifteen (15) business days after receipt of such
written notice from the Company; provided, however, that the Company's
obligation under this Section 2(a) shall be temporarily suspended if the Company
has previously given a notice of the type specified in Section 2(e)(2) from the
date the Registration Notice is received until the date the registration
statement referred to in the Registration Notice is declared effective (the
"Temporary Suspension Period"), so long as (i) the Temporary Suspension Period
is no longer than ninety days (90) days, and (ii) the Investors are informed in
writing that the Company's obligation under this Section 2(a) have been
temporarily suspended in accordance with this provision; and provided, further,
that the obligations of the Company under this Section 2(a) shall be subject to
the limitations set forth in Sections 2(c), 2(d) and 2(e) below. The Company may
include in any Demand Registration additional shares of Common Stock for sale
for its own account or for the account of any other person who has been granted
piggyback registration rights.
If the Company receives conflicting instructions, notices or elections
from two or more persons with respect to the same Registrable Shares, then the
Company may act upon the basis of the instructions, notice or election received
from the registered owner of such Registrable Shares.
(b) Selection of Underwriters. If a Demand Registration involves an
underwritten offering, the underwriter or underwriters thereof shall be selected
by the Company, provided that the underwriter or underwriters so selected shall
be a nationally recognized investment banking firm or firms.
(c) Limitation on Number of Registrations. The Company shall not be
required to effect (i) more than two (2) Demand Registrations and (ii) more than
one Demand Registration during any consecutive nine (9) month period; provided
that such Stock Escrow Agreement will not serve to limit the number of the times
the Investors may exercise their rights under this Agreement.
(d) Reduction of Offering. If the managing underwriter or
underwriters for a Demand Registration that is to be an underwritten offering
advises the Company and Investors seeking a Demand Registration (the "Demanding
Investors"), in writing that the dollar amount or number of shares of
Registrable Shares which the Demanding Investors desire to sell, taken together
with all other shares of Common Stock or other securities which the Company
desires to sell, and the Common Stock, if any, as to which registration has been
requested pursuant to written contractual piggyback registration rights held by
other stockholders of the Company who desire to sell their securities exceeds
the maximum dollar amount or maximum number of shares that can be sold in such
offerings. 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 Shares as to which Demand Registration has been requested
by the Demanding Investors (pro rata in accordance with the number of shares of
Registrable Shares which such Demanding Investor has requested be included in
such registration, regardless of the number of Registrable Shares held by each
Demanding Investor) that
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can be sold without exceeding the Maximum Number of Shares and the shares of
Common Stock, if any, as to which registration has been requested pursuant to
the Purchase Option; (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 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 stockholders desire to sell that can be sold without
exceeding the Maximum Number of Shares.
(e) Limitation on Company's Obligation. Notwithstanding anything in
this Section 2 to the contrary, but in all events subject to the provisions of
Section 2(f) hereof, the Company shall not be obligated to effect any
registration pursuant to Sections 2 and 3 hereof:
(1) if such Investor or Investors, together with the holders
of any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Shares and such other securities (if
any) at an aggregate price to the public of less than $750,000; or
(2) if the Company shall furnish to the Investors a
certificate signed by the President and Chief Executive Officer of the Company
stating that the Board has made the good faith determination that a registration
would require premature disclosure of material, nonpublic information concerning
the Company, its business or prospects, that such premature disclosure would be
materially adverse to the Company and that it is therefore essential to suspend
or defer such registration, that the Company shall have the right either to
suspend the use of an effective registration statement or defer the filing of a
registration statement for a period of not more than ninety (90) days (the
"Deferral Period"); provided, however, that the Company may not utilize this
right more than once with respect to each registration request (or registration
statement filed as a result of a request) made pursuant to, and in accordance
with, Section 2 hereof. If the Board makes the determination described in the
preceding sentence, the Company shall give written notice of such determination
to the holders of Registrable Shares. The Company shall notify the holders of
the expiration of the Deferral Period and shall, if such registration statement
requested pursuant to Section 2(a) hereof has not yet been filed, cause the
registration statement with respect to the Demand Registration to be filed on
the fifth (5th) business day following the expiration of the Deferral Period
(the "Withdrawal Period") (or, if registration on such date is not practicable,
as promptly as possible thereafter) unless, prior to the expiration of the
Withdrawal Period, the holders holding a majority of Registrable Shares to be
included in any such Demand Registration not yet filed, by written notice to the
Company, withdraw the request made under Section 2(a), in which case, such
request shall not count as one of the Demand Registrations permitted hereunder
and the Company shall pay all expenses in connection with such registration
theretofor incurred in accordance with Section 6 herein.
(f) Limitation on Requests. Notwithstanding anything in this Section
2 to the contrary, (1) no Investor may request a registration pursuant to this
Section 2 within one hundred and eighty (180) days of the effective date of any
other registration statement filed by the Company with the SEC pursuant to
Sections 2 and 3; and (2) no Investor may request a Demand Registration pursuant
to Section 2(a) at any time after the seventh (7th) anniversary of the Release
Date.
(g) Unavailability of Form S-3. Notwithstanding anything to the
contrary expressed or implied in this Agreement, if Form S-3 or any substitute
form is not then available for the registration
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of such Registrable Shares that would otherwise have been proposed to be sold
and distributed by such Investor or Investors pursuant to this Section 2, the
Company shall be obligated to prepare and file a registration statement on Form
S-1 at the written request or requests from any Investor or Investors given in
accordance with Section 2(a) and the provisions of this Section 2 shall govern
and apply to such request or requests and such registration on Form S-1.
3. PIGGYBACK REGISTRATION.
(a) If, at any time after the Release Date, the Company proposes to
register any of its Common Stock under the Securities Act, whether as a result
of a primary or secondary offering of Common Stock or pursuant to registration
rights granted to holders of other securities of the Company (but excluding in
all cases any registration pursuant to Section 2 hereof or any registrations to
be effected on Forms S-4 or S-8 or other applicable successor Forms), the
Company shall, each such time, give to the Investors ten (10) days' prior
written notice of its intent to do so, and such notice shall describe the
proposed registration and offer such holders the opportunity to register such
number of Registrable Shares as each such holder may request. Upon the written
request of any Investor given within fifteen (15) days after the giving of any
such notice by the Company, the Company shall use its commercially reasonable
efforts to cause to be included in such registration the Registrable Shares of
such selling Investor, to the extent requested to be registered, among all
holders of Registrable Shares and other persons entitled to the inclusion of
their shares in such registration, pro rata on the basis of the number of shares
of Common Stock then owned or held by such selling Investor to all of the shares
of Common Stock owned or held by all holders and other persons entitled to be
included within such registration; provided that (i) the number of Registrable
Shares proposed to be sold by such selling Investor is equal to at least
fifty-one percent (51%) of the total number of Registrable Shares then held by
such selling Investor, (ii) such selling Investor agrees to sell those of its
Registrable Shares to be included in such registration in the same manner and on
the same terms and conditions as the other shares of Common Stock which the
Company proposes to register, and (iii) if the registration is to include shares
of Common Stock to be sold for the account of the Company or any party
exercising demand registration rights pursuant to any other agreement with the
Company, the proposed managing underwriter does not advise the Company that in
its opinion the inclusion of such selling Registrable Shares (without any
reduction in the number of shares to be sold for the account of the Company or
such party exercising demand registration rights) is likely to affect materially
and adversely the success of the offering or the price that would be received
for any shares of Common Stock offered, in which case the rights of such selling
Investor shall be as provided in Section 3(b) hereof.
(b) If a registration pursuant to Section 3 hereof involves an
underwritten offering and the managing underwriter shall advise the Company in
writing that, in its opinion, the number of shares of Common Stock requested by
the Investors to be included in such registration is likely to affect materially
and adversely the success of the offering or the price that would be received
for any shares of Common Stock offered in such offering, then, notwithstanding
anything in this Section 3 to the contrary, the Company shall only be required
to include in such registration, to the extent of the number of shares of Common
Stock which the Company is so advised can be sold in such offering, (i) first,
the number of shares of Common Stock proposed to be included in such
registration for the account of the Company and/or any stockholders of the
Company (other than the Investors) that have exercised demand registration
rights, in accordance with the priorities, if any, then existing among the
Company and/or such stockholders of the Company with registration rights (other
than the Investors), and (ii) second, the shares of Common Stock requested to be
included in such registration by all other stockholders of the Company
(including, without limitation, the Investors), pro rata among such other
stockholders (including, without limitation, the Investors) on
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the basis of the number of shares of Common Stock that each of them requested to
be included in such registration.
(c) In connection with any offering involving an underwriting of
shares, the Company shall not be required under this Section 3 or otherwise to
include the Registrable Shares of any Investor therein unless such Investor
accepts and agrees to the terms of the underwriting, which shall be reasonable
and customary, as agreed upon between the Company and the underwriters selected
by the Company.
(d) If the managing underwriter or underwriters for a piggyback
registration that is to be an underwritten offering advises the Company and
holder of Registrable Shares in writing that the dollar amount or number of
shares of Common Stock which the Company desires to sell (taken together with
(i) 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 Shares hereunder, (ii) the Registrable Shares as to which
registration has been requested under Section 3, and (iii) the shares of Common
Stock, if any, as to which registration has been requested pursuant to the
written contractual piggyback registration rights of other stockholders of the
Company) exceeds the Maximum Number of Shares, then the Company shall include in
any such registration:
(1) 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), subject to demand registration rights
granted to the holders of the Purchase Option Shares, the shares of Common
Stock, if any, including the Registrable Shares, as to which registration has
been requested pursuant to written contractual piggyback 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 (including pursuant to the Purchase Option), 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
(2) If the registration is a "demand" registration undertaken
at the demand of persons other than holders of Registrable Shares 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 Shares as to which registration
has been requested under this Section 3 (pro rata in accordance with the number
of shares of Registrable Shares held by each such holder or under the Purchase
Option); 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 piggyback registration rights which other stockholders desire to
sell that can be sold without exceeding the Maximum Number of Shares.
4. OBLIGATIONS OF THE COMPANY. Whenever the Company is required under
Sections 2 or 3 hereof to use its commercially reasonable efforts to effect the
registration of any of the Registrable Shares of the Investors, the Company
shall, as expeditiously as practicable:
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(a) Prepare and file with the SEC (not later than forty-five (45)
days after receipt of a request to file a registration statement with respect to
Registrable Shares pursuant to Section 3 hereof) a registration statement with
respect to such Registrable Shares and use its commercially reasonable efforts
to cause such registration statement to become and remain effective for the
applicable period; provided, however that, except to the extent otherwise
provided in Section 2 hereof, the Company shall in no event be obligated to
cause any such registration to remain effective for more than ninety (90) days;
provided further, that before filing a registration statement or prospectus or
any amendments or supplements thereto, the Company shall (i) use reasonable
efforts to provide counsel selected by the holders of a majority of the
Registrable Shares being registered in such registration ("Holders' Counsel")
with an opportunity to participate in the preparation of such registration
statement and each prospectus included therein (and each amendment or supplement
thereto) to be filed with the SEC, and (ii) notify the Holders' Counsel of any
stop order issued or threatened by the SEC and to take all reasonable action
required to prevent the entry of such stop order or to remove it if entered;
(b) Prepare and file with the SEC such 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 with respect to the disposition of all
Registrable Shares covered by such registration statement;
(c) Notify the Investors and Holders' Counsel (if any) promptly and,
if requested by any Investor, confirm such advice in writing (i) when a
registration statement has become effective and when any post-effective
amendments and supplements thereto become effective, and (ii) of the issuance by
the SEC or any state securities commission of any stop order suspending the
effectiveness of a registration statement.
(d) Furnish to the selling Investors such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents (including, without
limitation, prospectus amendments and supplements as are prepared by the Company
in accordance with Section 4(e) below) as the selling Investors may reasonably
request in order to facilitate the disposition of such Registrable Shares;
(e) Notify the Investors and Holders' Counsel (if any), at any time
when a prospectus relating to such registration statement is required to be
delivered under the Securities Act, of the happening of any event as a result of
which the prospectus included in or relating to such registration statement
contains an untrue statement of a material fact or omits any fact necessary to
make the statements therein not misleading; and, thereafter, the Company will
promptly prepare (and, when completed, give notice to each Investor) a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Shares, such prospectus will not contain an
untrue statement of a material fact or omit to state any fact necessary to make
the statements therein not misleading; provided that upon such notification by
the Company, the Investors will not offer or sell Registrable Shares until the
Company has notified the Investors that it has prepared a supplement or
amendment to such prospectus and delivered copies of such supplement or
amendment to the Investors (it being understood and agreed by the Company that
the foregoing proviso shall in no way diminish or otherwise impair the Company's
obligation to promptly prepare a prospectus amendment or supplement as above
provided in this Section 4(e) and deliver copies of same as above provided in
Section 4(d) hereof);
(f) Use its commercially reasonable efforts to register and qualify
such Registrable Shares under such other securities or Blue Sky laws of such
jurisdictions as each selling Investor shall be reasonably request and do any
and all other acts or things that may be reasonably
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necessary or advisable to enable each selling Investor to consummate the public
sale or other disposition in such jurisdiction of Registrable Shares, provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions where it is not then qualified or
subject to process;
(g) Use its commercially reasonable efforts to cause all Registrable
Shares to be listed on the Nasdaq National Stock Market or any recognized stock
market or stock exchange; and
(h) Make available for inspection by any selling Investor, any
managing underwriter participating in any disposition pursuant to such
registration statement, Holders' Counsel (if any) and any attorney, accountant
or other agent retained by any such selling Investor or any managing underwriter
(each, an "Inspector" and collectively, the "Inspectors"), during regular
business hours and upon reasonable advance notice, all financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's officers,
directors and employees, and the independent public accountants of the Company,
to supply all information reasonably requested by any such Inspector in
connection with such registration statement, subject to obligations of
confidentiality.
5. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the selling Investors shall furnish to the Company, or the managing underwriter,
if any, such information regarding them and the Shares held by them as the
Company shall reasonably request and as shall be required in order to effect any
registration by the Company pursuant to this Agreement and in connection with
the Company's obligation to comply with federal and applicable state securities
laws.
6. EXPENSES OF REGISTRATION. All expenses incurred in connection with a
registration pursuant to this Agreement (excluding underwriting commissions and
discounts attributable to the Registrable Shares being sold by the holders
hereof, including without limitation all registration and qualification fees,
printing expenses, and fees and disbursements of counsel for the Company and one
counsel for the selling Investors, shall be borne by the Company.
7. INDEMNIFICATION. In the event that any Registrable Shares of the
Investors are included in a registration statement pursuant to this Agreement:
(a) To the fullest extent permitted by law, the Company will
indemnify and hold harmless each selling Investor, any underwriter (as defined
in the Securities Act) for the Company, and each officer, director, fiduciary,
employee, member, general partner and limited partner (and affiliates thereof)
of such selling Investor or such underwriter, each broker or other person acting
on behalf of such selling Investor and each person, if any, who controls such
selling Investor or such underwriter within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
they may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue or alleged untrue statement of any material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
or arise out of or are based upon the 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
Securities Act or state
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securities or blue sky laws applicable to the Company and leading to action or
inaction required of the Company in connection with such registration or
qualification under such Securities Act or state securities or blue sky laws;
and, subject to the provisions of Section 8(c), the Company will reimburse on
demand such selling Investor, such underwriter, such broker or other person
acting on behalf of such selling Investor or such officer, director, fiduciary,
employee, member, general partner, limited partner, affiliate or controlling
person for any legal or other expenses reasonably incurred by any of them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 8(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any such loss, damage,
liability or action to the extent that it arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in connection with such registration statement, preliminary prospectus,
final prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by the selling Investors, any underwriter for them or
controlling person with respect to them.
(b) To the fullest extent permitted by law, each selling Investor
will indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed such registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter
for the Company (within the meaning of the Securities Act), and all other
selling Investors against any losses, claims, damages or liabilities to which
the Company or any such director, officer, controlling person, or underwriter
may become subject to, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any untrue or alleged untrue statement of any material fact
contained in such registration statement, including any preliminary prospectus
contained therein or any amendments or supplements thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission was made in such registration
statement, preliminary prospectus, final prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with written information
furnished by the selling Investor expressly for use in connection with such
registration; and, subject to the provisions of Section 8(c), such selling
Investor will reimburse on demand any legal or other expenses reasonably
incurred by the Company or any such director, officer, controlling person,
underwriter or other selling Investor in connection with investigating or
defending any such loss, claim, damage, liability or action, provided, however,
that the maximum amount of liability of each selling Investor hereunder shall be
limited to the proceeds (net of underwriting discounts and commissions, if any)
actually received by such selling Investor from the sale of Registrable Shares
covered by such registration statement; and provided, further, however, that the
indemnity agreement contained in this Section 8(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of those selling Investor(s) against
which the request for indemnity is being made (which consent shall not be
unreasonably withheld).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof and the indemnifying party shall have the right to
participate in and, to the extent the indemnifying party desires, jointly with
any other indemnifying party similarly noticed, to assume at its expense the
defense thereof with counsel mutually satisfactory to the parties; provided,
however, that, if any indemnified party shall have reasonably concluded that
there may be one or more legal defenses available to such indemnified party
which are different
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from or additional to those available to the indemnifying party, or that such
claim or litigation involves or could have an effect upon matters beyond the
scope of the indemnity agreement provided in this Section 8, the indemnifying
party shall not have the right to assume the defense of such action on behalf of
such indemnified party, and such indemnifying party shall reimburse such
indemnified party and any person controlling such indemnified party for the fees
and expenses of counsel retained by the indemnified party which are reasonably
related to the matters covered by the indemnity agreement provided in this
Section 8. Subject to the foregoing, an indemnified party shall have the right
to employ separate counsel in any such action and to participate in the defense
thereof but the fees and expenses of such counsel shall not be at the expense of
the Company. The failure to notify an indemnifying party promptly of the
commencement of any such action, if materially prejudicial to his ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 8, but the omission so to notify the
indemnifying party will not relieve him of any liability which he may have to
any indemnified party otherwise other than under this Section 8.
(d) If the indemnification provided for in this Section 8 from the
indemnifying party is applicable by its terms but unavailable to an indemnified
party hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then the 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 losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified party in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified party shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Sections 8(a), 8(b)
and 8(c), any legal or other fees, charges or expenses reasonably incurred by
such party in connection with any investigation or proceeding. 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 fraudulent misrepresentation. The parties hereto agree that it would
not be just and equitable if contribution pursuant to this Section 8(d) 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 paragraph.
(e) Notwithstanding anything in this Section 8 to the contrary, if,
in connection with an underwritten public offering, the Company, the Investors
and the underwriters enter into an underwriting or purchase agreement relating
to such offering which contains provisions covering indemnification among the
parties, then the indemnification provision of this Section 8 shall be deemed
inoperative for purposes of such offering.
(f) The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies that may otherwise be available to
any indemnified person at law or in equity.
8. REPORTS UNDER THE EXCHANGE ACT. With a view to making available to the
Investors the use of Section 2 hereof and the benefits of Rule 144 and any other
rule or regulation of the SEC that may at any time permit the Investors to sell
the Shares to the public
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without registration, the Company agrees to use commercially reasonable efforts
to: (i) make and keep public information available, as those terms are
understood and defined in the General Instructions to Form S-3, or any successor
or substitute form, and in Rule 144, (ii) file with the SEC in a timely manner
all reports and other documents required to be filed by an issuer of securities
registered under the Securities Act or the Exchange Act, (iii) as long as any
Investor owns any Shares, to furnish in writing upon such Investor's request a
written statement by the Company that it has complied with the reporting
requirements of Rule 144 and of the Securities Act and the Exchange Act, and to
furnish to such Investor a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents so filed by the Company as may
be reasonably requested in availing such Investor of any rule or regulation of
the SEC permitting the selling of any such Shares without registration, and (iv)
undertake any additional actions reasonably necessary to maintain the
availability of a registration statement on Form S-3, including any successor or
substitute forms, or the use of Rule 144.
9. TRANSFER OF REGISTRATION RIGHTS. Except to the extent otherwise
provided in Section 10(a) hereof, none of the rights of any Investor under this
Agreement shall be transferred or assigned to any person unless (i) such person
is a Qualifying Investor (as defined below), and (ii) such person agrees to
become a party to, and bound by, all of the terms and conditions of, this
Agreement. For purposes of this Section 10(b), the term "Qualifying Investor"
shall mean, with respect to any Investor, (i) any partner, member or shareholder
thereof, (ii) any person, corporation or partnership controlling, controlled by,
or under common control with, such Investor or any partner thereof, or (iii) any
other direct transferee from such Investor of at least _________ shares of
Common Stock (subject to adjustment in the event of stock splits, stock
dividends, recombinations, recapitalizations and the like). None of the rights
of any Investor under this Agreement shall be transferred or assigned to any
transferee of Shares pursuant to a "brokers transaction" within the meaning of
Rule 144 under the Securities Act or an effective registration statement under
the Securities Act. Upon transfer of Shares and rights in accordance with this
Section 10(b), such Qualified Investor shall be deemed an "Investor" hereunder.
10. ENTIRE AGREEMENT. This Agreement constitutes and contains the entire
agreement and understanding of the parties with respect to the subject matter
hereof, and it also supersedes any and all prior negotiations, correspondence,
agreements or understandings with respect to the subject matter hereof.
11. MISCELLANEOUS.
(a) This Agreement may not be amended, modified or terminated, and
no rights or provisions may be waived, except with the written consent of the
majority of the voting power of the Investors and the Company; provided that
this Agreement may be amended or supplemented without notice to or consent of
any Investor to (i) cure any ambiguity or omission or to correct or supplement
any provision contained herein that may be defective or inconsistent with any
other provisions contained herein or (ii) add to the covenants of the Company
such further covenants, restrictions or conditions for the benefit of the
Investors.
(b) This Agreement shall be governed by and interpreted and
construed in accordance with the laws of the State of New York applicable to
contracts formed and to be performed entirely within the State of New York,
without regard to the conflicts of law provisions thereof to the extent such
principles or rules would require or permit the application of the laws of
another jurisdiction. The Company and the selling Investors irrevocably and
unconditionally submit to the exclusive jurisdiction of the United States
District Court for the Southern District of New York or, if such court does not
have jurisdiction, the New York State Supreme Court in the Borough
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of Manhattan, in any action arising out of or relating to this Agreement, agree
that all claims in respect of the action may be heard and determined in any such
court and agree not to bring any action arising out of or relating to this
Agreement in any other court. In any action, the Company and selling Investors
irrevocably and unconditionally waive and agree not to assert by way of motion,
as a defense or otherwise any claims that it is not subject to the jurisdiction
of the above court, that such action is brought in an inconvenient forum or that
the venue of such action is improper. Without limiting the foregoing, the
Company and the selling Investors agree that service of process at each party's
respective address as provided for in Section 12(c) above shall be deemed
effective service of process on such party.
(c) 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.
(d) Any notices to be given pursuant to this Agreement shall be in
writing and shall be given by certified or registered mail, return receipt
requested. Notices shall be deemed given when personally delivered or when
mailed to the addresses of the respective parties as set forth on Exhibit A
hereto, or to such changed address of which any party may notify the others
pursuant hereto, except that a notice of change of address shall be deemed given
when received.
(e) The parties acknowledge and agree that in the event of any
breach of this Agreement, remedies at law will be inadequate, and each of the
parties hereto shall be entitled to specific performance of the obligations of
the other parties hereto and to such appropriate injunctive relief as may be
granted by a court of competent jurisdiction. All remedies, either under this
Agreement or by law or otherwise afforded to any of the parties, shall be
cumulative and not alternative.
(f) This Agreement may be executed in a number of counterparts. All
such counterparts together shall constitute one Agreement, and shall be binding
on all the parties hereto notwithstanding that all such parties have not signed
the same counterpart. The parties hereto confirm that any facsimile copy of
another party's executed counterpart of this Agreement (or its signature page
thereof) will be deemed to be an executed original thereof.
(g) Except as contemplated in Section 9 hereof, this Agreement is
intended solely for the benefit of the parties hereto and is not intended to
confer any benefits upon, or create any rights in favor of, any Person
(including, without limitation, any stockholder or debt holder of the Company)
other than the parties hereto.
(h) If any provision of this Agreement is invalid, illegal or
unenforceable, such provision shall be ineffective to the extent, but only to
the extent of, such invalidity, illegality or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement, unless such a construction would be unreasonable.
(i) This Agreement shall be binding upon, and inure to the benefit
of, the parties hereto and their respective heirs, personal representatives,
successors and permitted assigns and transferees.
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date and year first above written.
NAVITAS INTERNATIONAL CORPORATION
By: ______________________
Name: Xxxxx X. Xxxxx
Title: President and Chief Executive Officer
COUNTERPART SIGNATURE PAGE
TO
REGISTRATION RIGHTS AGREEMENT
Executed and delivered under seal as of the date first above written. This
Counterpart Signature Page will be effective, and will become a part of the
Agreement, immediately upon execution.
INVESTOR: FOR EXECUTION BY AN ENTITY:
Name of Entity: _________________________________
Signature of Signatory: _________________________
Name of Signatory: ______________________________
Title of Signatory:______________________________
FOR EXECUTION BY AN INDIVIDUAL:
Name of Individual: ____________________________
Signature of Individual: _______________________
ADDRESS:
________________________________________________
________________________________________________
________________________________________________
Exhibit A
All correspondence to the Company shall be addressed as follows:
Navitas International Corporation
0 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Chief Executive Officer
Telecopier: [_________]
with a copy to:
Xxxxxxx XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Telecopier: (000) 000-0000
