REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is
entered into as of the ___ day of _____, 2007, by and among Columbus Acquisition
Corp., a Delaware corporation (the “Company”)
and
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 shares of Common
Stock 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.
“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, 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.
2.1.1. Request
for Registration. At any time and from time to time on or after a date that
is three months prior to the Release Date, the holders of a majority-in-interest
of the Registrable Securities held by the Investors or the transferees of the
Investors, may make a written demand for registration under the Securities
Act
of all or part of their Registrable Securities (a “Demand
Registration”). Any demand for a Demand Registration shall specify
the number of shares of Registrable Securities proposed to be sold and the
intended method(s) of distribution thereof. The Company will notify all holders
of Registrable Securities of the demand, and each holder of Registrable
Securities who wishes to include all or a portion of such holder’s Registrable
Securities in the Demand Registration (each such holder including shares of
Registrable Securities in such registration, a “Demanding
Holder”) shall so notify the Company within fifteen (15) days after
the receipt by the holder of the notice from the Company. Upon any such request,
the Demanding Holders shall be entitled to have their Registrable Securities
included in the Demand Registration, subject to Section 2.1.4 and the provisos
set forth in Section 3.1.1. The Company shall not be obligated to effect more
than an aggregate of two (2) Demand Registrations under this Section 2.1.1
in
respect of Registrable Securities.
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, or is otherwise withdrawn, 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 stockholders 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 that each such Person has requested be
included in such registration, regardless of the number of shares held by each
such Person (such proportion is referred to herein as "Pro
Rata")) 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 or other securities registrable pursuant to the terms
of
the Unit Purchase Option issued to Ladenburg Xxxxxxxx &Co. Inc. or its
designees in connection with the Company’s initial public offering (the
“Unit Purchase Option” and such registrable securities,
the "Option Securities") as to which "piggy-back"
registration has been requested by the holders thereof, Pro Rata, that can
be
sold without exceeding the Maximum Number of Shares; and (iv) 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 or other
securities 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.
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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. If the majority-in-interest of the
Demanding Holders withdraw 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.
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 stockholders of the Company for their account (or by the
Company and by stockholders 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
stockholders, (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 five (5) 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 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.
3
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
stockholders of the Company, exceeds the Maximum Number of Shares, then the
Company shall include in any such registration:
a) 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 or other securities, if any, comprised
of
Registrable Securities and Option Securities, as to which registration has
been
requested pursuant to the applicable written contractual piggy-back registration
rights of such security holders, Pro Rata, 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 shares of Common Stock or other securities for the account of other persons
that the Company is obligated to register pursuant to written contractual
piggy-back registration rights with such persons and that can be sold without
exceeding the Maximum Number of Shares;
b) If
the registration is a “demand” registration undertaken at the demand of holders
of Option Securities, (A) first, the shares of Common Stock or other securities
for the account of the demanding persons, Pro Rata, 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; (C) third,
to
the extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (A) and (B), the shares of Registrable Securities, Pro Rata,
as to which registration has been requested pursuant to the terms hereof, that
can be sold without exceeding the Maximum Number of Shares; 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 or other
securities for the account of other persons that the Company is obligated to
register pursuant to written contractual arrangements with such persons, that
can be sold without exceeding the Maximum Number of Shares; and
4
c)
If the registration is a “demand” registration undertaken at the demand of
persons other than either the holders of Registrable Securities or of Option
Securities, (A) first, the shares of Common Stock or other securities 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; (C) third, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clauses (A)
and (B), collectively the shares of Common Stock or other securities comprised
of Registrable Securities and Option Securities, Pro Rata, as to which
registration has been requested pursuant to the terms hereof and of the Unit
Purchase Option, as applicable, that can be sold without exceeding the Maximum
Number of Shares; 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 or other securities for the account of other persons
that
the Company is obligated to register pursuant to written contractual
arrangements with such persons, 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 (whether on its own
determination or as the result of a withdrawal by persons making a demand
pursuant to written contractual obligations) may 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.
5
2.3 Registrations
on Form S-3. The holders of Registrable Securities may at any time and from
time to time, 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 or other
securities of the Company, if any, 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 use its best efforts to, 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 effective and use its best efforts to keep it 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 stockholders 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.
6
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 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 or subject
itself to taxation in any such jurisdiction.
7
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.
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 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.
8
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
stockholders, 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.
3.3 Registration
Expenses. The Company shall bear all costs and expenses incurred in
connection with any Demand Registration pursuant to Section 2.1, any Piggy-Back
Registration pursuant to Section 2.2, and any registration on Form S-3 effected
pursuant to Section 2.3, and all expenses incurred in performing or complying
with its other obligations under this Agreement, whether or not the Registration
Statement becomes effective, including, without limitation: (i) all registration
and filing fees; (ii) fees and expenses of compliance with securities or “blue
sky” laws (including fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities); (iii) printing expenses;
(iv)
the Company’s internal expenses (including, without limitation, all salaries and
expenses of its officers and employees); (v) the fees and expenses incurred
in
connection with the listing of the Registrable Securities as required by Section
3.1.11; (vi) National Association of Securities Dealers, Inc. fees; (vii) fees
and disbursements of counsel for the Company and fees and expenses for
independent certified public accountants retained by the Company (including
the
expenses or costs associated with the delivery of any opinions or comfort
letters requested pursuant to Section 3.1.9); (viii) the fees and expenses
of
any special experts retained by the Company in connection with such registration
and (ix) the fees and expenses of one legal counsel selected by the holders
of a
majority-in-interest of the Registrable Securities included in such
registration. The Company shall have no obligation to pay any underwriting
discounts or selling commissions attributable to the Registrable Securities
being sold by the holders thereof, which underwriting discounts or selling
commissions shall be borne by such holders. Additionally, in an underwritten
offering, all selling stockholders and the Company shall bear the expenses
of
the underwriter pro rata in proportion to the respective amount of shares each
is selling in such offering.
9
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.
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 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. The Company also
shall indemnify any Underwriter of the Registrable Securities, their officers,
affiliates, directors, partners, members 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.
10
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 selling
holder and each other person, if any, who controls another selling holder or
such underwriter within the meaning of the Securities 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 other selling holder or
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.
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,
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 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 wishes, 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.
11
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
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
4.4.3. 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
hereafter adopted by the Commission.
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6. MISCELLANEOUS.
6.1 Other
Registration Rights. Except with respect to those securities issued or
issuable upon exercise of that certain Unit Purchase Option to be issued to
Ladenburg Xxxxxxxx & Co. Inc. or its designees in connection with the
Company’s initial public offering in _______ 2007, the Company represents and
warrants that 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. This Agreement and the provisions hereof shall be binding upon and
shall
inure to the benefit of each of the parties, to Ladenburg Xxxxxxxx & Co.
Inc. and its 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. 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.
To
the
Company:
with
a
copy to:
To
an
Investor, to:
13
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
that is 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.
Notwithstanding the foregoing, any and all parties must obtain the written
consent of Ladenburg Xxxxxxxx & Co. Inc. to amend or modify this
Agreement.
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.
14
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.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
15
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.
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By:
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INITIAL
STOCKHOLDERS:
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