REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement is made and entered into as of November 30, 2007
(as amended, modified or supplemented from time to time, this
“Agreement”) by and between NewMarket Technology, Inc., a Nevada
corporation (the “Company”), and Valens U.S. SPV I, LLC (the
“Investor”).
This
Agreement is made pursuant to the Security Agreement dated as of the date hereof
by and between the Company, various subsidiaries of the Company, the Investor,
the other Lenders and LV Administrative Services, Inc., as administrative and
collateral agent for the Lenders (as amended, restated, modified and/or
supplemented from time to time, the “Security Agreement”).
The
Company and the Investor hereby agree as follows:
1. Definitions. Capitalized
terms used and not otherwise defined herein that are defined in the Security
Agreement shall have the meanings given such terms in the Security
Agreement. As used in this Agreement, the following terms shall have
the following meanings:
“Commission”
means the Securities and Exchange Commission.
“Common
Stock” means shares of the Company’s common stock, par value $0.001 per
share.
“Company”
has the meaning given to such term in the Preamble hereto.
“Effectiveness
Date” means, (i) with respect to the initial Registration Statement
required to be filed in connection with the Secured Term Notes and the Warrants
issued on the date hereof, a date no later than one hundred eighty (180) days
following the date hereof and (ii) with respect to each additional Registration
Statement required to be filed hereunder (if any), a date no later than ninety
(90) days following the applicable Filing Date.
“Effectiveness
Period” has the meaning set forth in Section 2(a).
“Event”
has the meaning set forth in Section 2(b).
“Event
Date” has the meaning set forth in Section 2(b).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and any
successor statute.
“Filing
Date” means, with respect to (1) the Registration Statement required to be
filed in connection with the shares of Common Stock issuable to the Holder
upon
(x) conversion of the Secured Term Notes issued as of the date hereof and (y)
exercise of any Warrant issued as of the date hereof, the date which is sixty
(60) days following the date hereof, (2) the Registration Statement required
to
be filed in connection with the shares of Common Stock issuable to the Holder
upon exercise of any Warrant issued after the date hereof, the date which is
ninety (90) days after the issuance of such Warrant and (3) the Registration
Statement required to be filed in connection with the shares of Common Stock
issuable to the Holder as a result of adjustments to (x) the Fixed Conversion
Price made pursuant to Section 2.1(a) of the Secured Term Notes, or (y) the
Exercise Price made pursuant to Section 4 of the Warrant, or otherwise, ninety
(90) days after the occurrence of such event or the date of the adjustment
of
the Fixed Conversion Price or Exercise Price, as applicable.
“Holder”
or “Holders” means the Investor or any of its affiliates or transferees
to the extent any of them hold Registrable Securities, other than those
purchasing Registrable Securities in a market transaction.
“Indemnified
Party” has the meaning set forth in Section 5(c).
“Indemnifying
Party” has the meaning set forth in Section 5(c).
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“Prospectus”
means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by such Registration Statement,
and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
“Registrable
Securities” means the shares of Common Stock issuable upon conversion of
the Secured Term Note and exercise of the Warrants.
“Registration
Statement” means each registration statement required to be filed
hereunder, including the Prospectus therein, amendments and supplements to
such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference
or
deemed to be incorporated by reference in such registration
statement.
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially
the
same effect as such Rule.
“Rule
415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially
the
same effect as such Rule.
“Secured
TermNotes” has the meaning given to the term in the Security
Agreement.
“Securities
Act” means the Securities Act of 1933, as amended, and any successor
statute.
“Security
Agreement” has the meaning given to such term in the Preamble
hereto.
“Trading
Market” means any of the NASD Over The Counter Bulletin Board, NASDAQ
Capital Market, the NASDAQ Global Market, the American Stock Exchange or the
New
York Stock Exchange.
“Warrants”
means the Common Stock purchase warrants issued in connection with the Security
Agreement, whether on the date thereof or thereafter.
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2. Registration.
(a) On
or
prior to each Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the Registrable Securities for
a
selling stockholder resale offering to be made on a continuous basis pursuant
to
Rule 415. Each Registration Statement shall be on Form S-3 (except if
the Company is not then eligible to register for resale the Registrable
Securities on Form S-3, in which case such registration shall be on another
appropriate form in accordance herewith). The Company shall cause
each Registration Statement to become effective and remain effective as provided
herein. The Company shall use its best efforts to cause each
Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event no later than
the Effectiveness Date. The Company shall use its best efforts to
keep each Registration Statement continuously effective under the Securities
Act
until the date which is the earlier date of when (i) all Registrable Securities
covered by such Registration Statement have been sold or (ii) all Registrable
Securities covered by such Registration Statement may be sold immediately
without registration under the Securities Act and without volume restrictions
pursuant to Rule 144(k), as determined by the counsel to the Company pursuant
to
a written opinion letter to such effect, addressed and acceptable to the
Company’s transfer agent and the affected Holders (each, an “Effectiveness
Period”).
(b) If:
(i)
the Registration Statement is not filed on or prior to the Filing Date; (ii)
the
Registration Statement is not declared effective by the Commission by the
Effectiveness Date; (iii) after the Registration Statement is filed with and
declared effective by the Commission, the Registration Statement ceases to
be
effective (by suspension or otherwise) as to all Registrable Securities to
which
it is required to relate at any time prior to the expiration of the
Effectiveness Period (without being succeeded immediately by an additional
registration statement filed and declared effective) for a period of time which
shall exceed 90 days in the aggregate per year (defined as a period of 365
days
commencing on the date the Registration Statement is declared effective) or
more
than 30 consecutive calendar days; or (iv) the Common Stock is not listed or
quoted, or is suspended from trading on any Trading Market for a period of
three
(3) consecutive Trading Days (provided the Company shall not have been able
to
cure such trading suspension within 30 days of the notice thereof or list the
Common Stock on another Trading Market); (any such failure or breach being
referred to as an “Event,” and for purposes of clause (i) or (ii) the
date on which such Event occurs, or for purposes of clause (iii) the date which
such 90 day or 30 consecutive day period (as the case may be) is exceeded,
or
for purposes of clause (iv) the date on which such three (3) Trading Day period
is exceeded, being referred to as “Event Date”), then until the
applicable Event is cured, the Company shall pay to each Holder an amount in
cash, as liquidated damages and not as a penalty, equal to 1.5% for each thirty
(30) day period (prorated for partial periods) on a daily basis of the original
principal amount of the Secured Term Note issued to the Investor,
provided, however, solely with respect to the Events set forth in
clauses (i) through (iii) hereof, following the expiration of the Effectiveness
Period, liquidated damages shall no longer be payable under this
subsection. While such Event continues, such liquidated damages shall
be paid not less often than each thirty (30) days. Any unpaid
liquidated damages as of the date when an Event has been cured by the Company
shall be paid within three (3) days following the date on which such Event
has
been cured by the Company.
(c) Within
five (5) business days of the Effectiveness Date, the Company shall cause its
counsel to issue a blanket opinion in the form attached hereto as Exhibit A,
to
the transfer agent stating that the shares are subject to an effective
registration statement and can be reissued free of restrictive legend upon
notice of a sale by the Investor and confirmation by the Investor that it has
complied with the prospectus delivery requirements, provided that the
Company has not advised the transfer agent orally or in writing that the opinion
has been withdrawn. Copies of the blanket opinion required by this
Section 2(c) shall be delivered to the Investor within the time frame set forth
above.
3. Registration
Procedures. If and whenever the Company is required by the
provisions hereof to effect the registration of any Registrable Securities
under
the Securities Act, the Company will, as expeditiously as possible:
(a) prepare
and file with the Commission a Registration Statement with respect to such
Registrable Securities, respond as promptly as possible to any comments received
from the Commission, and use its best efforts to cause such Registration
Statement to become and remain effective for the Effectiveness Period with
respect thereto, and promptly provide to the Investor copies of all filings
and
Commission letters of comment relating thereto and before filing a Registration
Statement or Prospectus or any amendments or supplements thereto, furnish to
the
Investor copies of all such documents proposed to be filed, including documents
incorporated by reference in the Prospectus and, if requested by the
Investor, the exhibits incorporated by reference, and the Investor shall
have the opportunity to object to any information pertaining to itself that
is contained therein and the Company will make the corrections reasonably
requested by the Investor with respect to such information prior to filing
any Registration Statement or amendment thereto or any Prospectus or any
supplement thereto;
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(b) prepare
and file with the Commission such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith as may
be
necessary to comply with the provisions of the Securities Act with respect
to
the disposition of all Registrable Securities covered by such Registration
Statement and to keep such Registration Statement effective until the expiration
of the Effectiveness Period applicable to such Registration
Statement;
(c) furnish
to the Investor such number of copies of the Registration Statement and the
Prospectus included therein (including each preliminary Prospectus and any
amendments and supplements to the Registration Statement and the Prospectus)
and
such other documents as the Investor reasonably may request to facilitate the
public sale or disposition of the Registrable Securities covered by such
Registration Statement;
(d) use
its
best efforts to register or qualify the Investor’s Registrable Securities
covered by such Registration Statement under the securities or “blue sky” laws
of such jurisdictions within the United States as the Investor may reasonably
request and do any and all other acts and things which may be reasonably
necessary or advisable to enable the Investor to consummate the disposition
in
such jurisdiction of the Registrable Securities, provided,
however, that the Company shall not for any such purpose be required
to
qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service
of
process in any such jurisdiction;
(e) list
the
Registrable Securities covered by such Registration Statement with any
securities exchange on which the Common Stock of the Company is then listed
and,
if the Common Stock is not then listed, list the Registrable Securities on
Nasdaq or a national securities exchange selected by the Company;
(f) immediately
notify the Investor at any time when a Prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event as
a
result of which the Prospectus contained in such Registration Statement, as
then
in effect, includes an untrue statement of a material fact or omits to state
a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and, at the request of the Investor, the Company shall
prepare a supplement or amendment to such Prospectus so that, as thereafter
delivered to the purchasers of Registrable Securities, such Prospectus shall
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 statement therein
not misleading;
(g) make
available for inspection by the Investor and any attorney, accountant or other
agent retained by the Investor, all publicly available, non-confidential
financial and other records, pertinent corporate documents and properties of
the
Company, and cause the Company’s officers, directors and employees to supply all
publicly available, non-confidential information reasonably requested by the
attorney, accountant or agent of the Investor;
(h) provide
a
transfer agent and registrar for all such Registrable Securities not later
than
the effective date of such Registration Statement;
(i) if
requested, cause to be delivered, immediately prior to the effectiveness of
the
Registration Statement, letters from the Company’s independent certified public
accountants addressed to the Investor (unless the Investor does not provide
to
such accountants the appropriate representation letter required by rules
governing the accounting profession) stating that such accountants are
independent public accountants within the meaning of the Securities Act and
the
applicable rules and regulations adopted by the SEC thereunder, and otherwise
in
customary form and covering such financial and accounting matters as are
customarily covered by letters of the independent certified public accountants
delivered in connection with primary or secondary underwritten public offerings,
as the case may be; and
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(j) at
all
times after the Company has filed a Registration Statement with the SEC pursuant
to the requirements of either the Securities Act or the Exchange Act, the
Company shall file all reports required to be filed by it under the Securities
Act and the Exchange Act and the rules and regulations adopted by the SEC
thereunder, and take such further action as the Investor may reasonably request,
all to the extent required to enable the Investor to be eligible to sell
Registrable Securities pursuant to Rule 144 (or any similar rule then in
effect).
4. Registration
Expenses. All expenses relating to the Company’s compliance
with Sections 2 and 3 hereof, including, without limitation, all registration,
filing and listing application fees, costs of distributing any prospectuses
and
supplements thereto, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses (including
reasonable counsel fees) incurred in connection with complying with state
securities or “blue sky” laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, fees of, and disbursements incurred by, one
counsel for the Holders are called “Registration Expenses.” All
selling commissions applicable to the sale of Registrable Securities, including
any fees and disbursements of any special counsel to the Holders beyond those
included in Registration Expenses, are called “Selling Expenses.” The
Company shall only be responsible for all Registration Expenses. The
obligation of the Company to bear the expenses described above shall
apply irrespective of whether a registration, becomes effective, is withdrawn
or
suspended, is converted to another form of registration and irrespective of
when
any of the foregoing shall occur.
5. Indemnification.
(a) In
the
event of a registration of any Registrable Securities under the Securities
Act
pursuant to this Agreement, the Company will indemnify and hold harmless each
Holder, and its officers, directors and each other person, if any, who controls
such Holder within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such Holder, or
such
persons 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 statement or alleged untrue statement
of any material fact contained in any Registration Statement under which such
Registrable Securities were registered under the Securities Act pursuant to
this
Agreement, any preliminary Prospectus or final Prospectus contained therein,
or
any amendment or supplement thereof, 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 or alleged violation by the Company of the Securities Act, the
Exchange Act or applicable “blue sky” laws, and will reimburse such Holder, and
each such person for any reasonable legal or other expenses incurred by them
in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not
be liable in any such case if and to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by or on behalf of the Investor or any such person
in
writing specifically for use in any such document.
(b) In
the
event of a registration of the Registrable Securities under the Securities
Act
pursuant to this Agreement, the Investor will indemnify and hold harmless the
Company, and its officers, directors and each other person, if any, who controls
the Company within the meaning of the Securities Act, against all losses,
claims, damages or liabilities, joint or several, to which the Company or such
persons 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 statement or alleged untrue statement
of any material fact which was furnished in writing by the Investor to the
Company expressly for use in (and such information is contained in) the
Registration Statement under which such Registrable Securities were registered
under the Securities Act pursuant to this Agreement, any preliminary Prospectus
or final Prospectus contained therein, or any amendment or supplement thereof,
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, and will reimburse the Company and each
such
person for any reasonable legal or other expenses incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action, provided, however, that the Investor will be liable in any
such case if and only to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished in writing to the Company by or on behalf of the Investor specifically
for use in any such document. Notwithstanding the provisions of this
paragraph, the Investor shall not be required to indemnify any person or entity
in excess of the amount of the aggregate net proceeds received by the Investor
in respect of Registrable Securities in connection with any such registration
under the Securities Act.
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(c) Promptly
after receipt by a party entitled to claim indemnification hereunder (an
“Indemnified Party”) of notice of the commencement of any action, such
Indemnified Party shall, if a claim for indemnification in respect thereof
is to
be made against a party hereto obligated to indemnify such Indemnified Party
(an
“Indemnifying Party”), notify the Indemnifying Party in writing thereof,
but the omission so to notify the Indemnifying Party shall not relieve it from
any liability which it may have to such Indemnified Party under this Section
5(c) and shall only relieve it from any liability which it may have to such
Indemnified Party under this Section 5(c) if and to the extent the Indemnifying
Party is prejudiced by such omission. In case any such action shall
be brought against any Indemnified Party and it shall notify the Indemnifying
Party of the commencement thereof, the Indemnifying Party shall be entitled
to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel satisfactory to such Indemnified Party, and, after
notice from the Indemnifying Party to such Indemnified Party of its election
so
to assume and undertake the defense thereof, the Indemnifying Party shall not
be
liable to such Indemnified Party under this Section 5(c) for any legal expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof; if the Indemnified Party retains its own counsel, then the Indemnified
Party shall pay all fees, costs and expenses of such counsel, provided,
however, that, if the defendants in any such action include both the
Indemnified Party and the Indemnifying Party and the Indemnified Party shall
have reasonably concluded that there may be reasonable defenses available to
it
which are different from or additional to those available to the Indemnifying
Party or if the interests of the Indemnified Party reasonably may be deemed
to
conflict with the interests of the Indemnifying Party, the Indemnified Party
shall have the right to select one separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
reasonable expenses and fees of such separate counsel and other expenses related
to such participation to be reimbursed by the Indemnifying Party as
incurred.
(d) In
order
to provide for just and equitable contribution in the event of joint liability
under the Securities Act in any case in which either (i) the Investor, or any
officer, director or controlling person of the Investor, makes a claim for
indemnification pursuant to this Section 5 but it is judicially determined
(by
the entry of a final judgment or decree by a court of competent jurisdiction
and
the expiration of time to appeal or the denial of the last right of appeal)
that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 5 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of the
Investor or such officer, director or controlling person of the Investor in
circumstances for which indemnification is provided under this Section 5; then,
and in each such case, the Company and the Investor will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that the Investor is
responsible only for the portion represented by the percentage that the public
offering price of its securities offered by the Registration Statement bears
to
the public offering price of all securities offered by such Registration
Statement, provided, however, that, in any such case, (A) the
Investor will not be required to contribute any amount in excess of the public
offering price of all such securities offered by it pursuant to such
Registration Statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
(e) The
indemnification provided for under this Agreement shall remain in full force
and
effect regardless of any investigation made by or on behalf of the indemnified
party or any officer, director or controlling Person of such indemnified party
and shall survive the transfer of securities.
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6. Representations
and Warranties.
(a) The
Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act and, except with respect to certain matters which the Company has disclosed
to the Investor on Schedule 12(u) to the Security Agreement, the Company
has timely filed all proxy statements, reports, schedules, forms, statements
and
other documents required to be filed by it under the Exchange
Act. The Company has filed (i) its Annual Report on Form 10-K for its
fiscal year ended December 31, 2006 and (ii) its Quarterly Report on Form 10-Q
for the fiscal quarters ended March 31, 2007 and June 30, 2007 (collectively,
the “SEC Reports”). Each SEC Report was, at the time of its filing,
in substantial compliance with the requirements of its respective form and
none
of the SEC Reports, nor the financial statements (and the notes thereto)
included in the SEC Reports, as of their respective filing dates, contained
any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light
of
the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Reports comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the Commission or other applicable rules
and
regulations with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles
(“GAAP”) applied on a consistent basis during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed) and fairly present in all
material respects the financial condition, the results of operations and the
cash flows of the Company and its subsidiaries, on a consolidated basis, as
of,
and for, the periods presented in each such SEC Report.
(b) The
Common Stock is listed or quoted, as applicable, for trading on the NASDAQ
Over
The Counter Bulletin Board and satisfies all requirements for the continuation
of such listing or quotation, as applicable, and the Company shall do all things
necessary for the continuation of such listing or quotation, as
applicable. The Company has not received any notice that its Common
Stock will be delisted from or no longer be quoted on, as applicable, the NASDAQ
Over The Counter Bulletin Board (except for prior notices which have been fully
remedied) or that the Common Stock does not meet all requirements for the
continuation of such listing or quotation, as applicable.
(c) Neither
the Company, nor any of its affiliates, nor any person acting on its or their
behalf, has directly or indirectly made any offers or sales of any security
or
solicited any offers to buy any security under circumstances that would cause
the offering of the Securities pursuant to the Security Agreement to be
integrated with prior offerings by the Company for purposes of the Securities
Act which would prevent the Company from selling the Common Stock pursuant
to
Rule 506 under the Securities Act, or any applicable exchange-related
stockholder approval provisions, nor will the Company or any of its affiliates
or subsidiaries take any action or steps that would cause the offering of the
Securities to be integrated with other offerings (other than such concurrent
offering to the Investor).
(d) The
Warrants and the shares of Common Stock that the Investor may acquire pursuant
to the Warrants are all restricted securities under the Securities Act as of
the
date of this Agreement. The Company will not issue any stop transfer
order or other order impeding the sale and delivery of any of the Registrable
Securities at such time as such Registrable Securities are registered for public
sale or an exemption from registration is available, except as required by
federal or state securities laws.
(e) The
Company understands the nature of the Registrable Securities issuable upon
the
conversion of the Secured Term Notes and exercise of each Warrant and recognizes
that the issuance of such Registrable Securities may have a potential dilutive
effect. The Company specifically acknowledges that its obligation to
issue the Registrable Securities is binding upon the Company and enforceable
regardless of the dilution such issuance may have on the ownership interests
of
other shareholders of the Company.
(f) Except
for agreements made in the ordinary course of business, there is no agreement
that has not been filed with the Commission as an exhibit to a registration
statement or to a form required to be filed by the Company under the Exchange
Act, the breach of which could reasonably be expected to have a material and
adverse effect on the Company and its subsidiaries, or would prohibit or
otherwise interfere with the ability of the Company to enter into and perform
any of its obligations under this Agreement in any material
respect.
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(g) The
Company will at all times have authorized and reserved a sufficient number
of
shares of Common Stock for the full conversion of the Secured Term Notes and
exercise of the Warrants.
(h) The
Company shall provide written notice to each Holder of (i) the occurrence of
each Discontinuation Event (as defined below) and (ii) the declaration of
effectiveness by the SEC of each Registration Statement required to be filed
hereunder, in each case within one (1) business day of the date of each such
occurrence and/or declaration.
7. Miscellaneous.
(a) Remedies. In
the event of a breach by the Company or by a Holder, of any of their respective
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.
(b) No
Piggyback on Registrations. Except as and to the extent set
forth on Schedule 7(b) hereto, neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include
securities of the Company in any Registration Statement other than the
Registrable Securities, and the Company shall not after the date hereof enter
into any agreement providing any such right for inclusion of shares in the
Registration Statement to any of its security holders. Except as and
to the extent specified in Schedule 7(b) hereto, the Company has not
previously entered into any agreement granting any registration rights with
respect to any of its securities to any person or entity that have not been
fully satisfied.
(c) Compliance. Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to any Registration Statement.
(d) Discontinued
Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of a Discontinuation Event (as defined below), such Holder will
forthwith discontinue disposition of such Registrable Securities under the
applicable Registration Statement until such Holder’s receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until
it is
advised in writing (the “Advice”) by the Company that the use of the
applicable Prospectus may be resumed, and, in either case, has received copies
of any additional or supplemental filings that are incorporated or deemed to
be
incorporated by reference in such Prospectus or Registration
Statement. The Company may provide appropriate stop orders to enforce
the provisions of this paragraph. For purposes of this Agreement, a
“Discontinuation Event” shall mean (i) when the Commission notifies the Company
whether there will be a “review” of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement (the Company
shall
provide true and complete copies thereof and all written responses thereto
to
each Holder); (ii) any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance by
the
Commission of any stop order suspending the effectiveness of such Registration
Statement covering any or all of the Registrable Securities or the initiation
of
any Proceedings for that purpose; (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and/or (v) the occurrence of any event or passage of time that makes
the financial statements included in such Registration Statement ineligible
for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein
by
reference untrue in any material respect or that requires any revisions to
such
Registration Statement, Prospectus or other documents so that, in the case
of
such Registration Statement or Prospectus, as the case may be, it will not
contain any 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,
in light of the circumstances under which they were made, not
misleading.
8
(e) Piggy-Back
Registrations. If at any time during the applicable
Effectiveness Period there is not an effective Registration Statement covering
all of the Registrable Securities required to be covered during such
Effectiveness Period and the Company shall determine to prepare and file with
the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents relating to equity securities
to
be issued solely in connection with any acquisition of any entity or business
or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall promptly send to each Holder written
notice of such determination and, if within fifteen (15) days after receipt
of
such notice, any such Holder shall so request in writing, the Company shall
include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered, to the extent the Company
may
do so without violating registration rights of others which exist as of the
date
of this Agreement, subject to customary underwriter cutbacks applicable to
all
holders of registration rights and subject to obtaining any required consent
of
any selling stockholder(s) to such inclusion under such registration
statement.
(f) Amendments
and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented,
and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and the Holders
of
the then outstanding Registrable Securities. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of certain Holders and that
does not directly or indirectly affect the rights of other Holders may be given
by Holders of at least a majority of the Registrable Securities to which such
waiver or consent relates; provided, however, that the provisions
of this sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding
sentence.
9
(g) Notices. Any
notice or request hereunder may be given to the Company or the Investor at
the
respective addresses set forth below or as may hereafter be specified in a
notice designated as a change of address under this Section 7(g). Any
notice or request hereunder shall be given by registered or certified mail,
return receipt requested, hand delivery, overnight mail, Federal Express or
other national overnight next day carrier or telecopy (confirmed by
mail). Notices and requests shall be, in the case of those by hand
delivery, deemed to have been given when delivered to any party to whom it
is
addressed, in the case of those by mail, deemed to have been given three (3)
business days after the date when deposited in the mail, in the case of those
by
overnight next day carrier, the next business day following delivery to such
overnight next day carrier, and, in the case of a telecopy, when
confirmed. The address for such notices and communications shall be
as follows:
|
|
If
to the Company:
|
NewMarket
Technologies, Inc.
|
|
00000
Xxxxxxxx Xxxxx, Xxxxx 000
|
|
Xxxxxx,
Xxxxx 00000
|
|
Attention:
Xxxxxx Xxxxx
|
|
Facsimile
No.:
|
|
|
with
a copy to:
|
Xxxxxxxx,
Xxxxxx & Xxxxxxxxxx, LLP
|
|
000
Xxxxxxx Xxxxxx, Xxxxx 000
|
|
Xxxxxx
Xxxx, Xxx Xxxx 00000
|
|
Attention:
Xxxxx Xxxxxxxx, Esq.
|
|
Facsimile
No.: 516-222-8803
|
|
|
If
to Investor:
|
To
the address set forth under Investor’s name on the signature page
hereto
|
|
If
to any other Person who is then
the registered Holder:
|
To
the address of such Holder as it appears in the stock transfer books
of
the Company
|
or
such
other address as may be designated in writing hereafter in accordance with
this
Section 7(g) by such Person.
10
(h) Successors
and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties
and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent
of
each Holder. Each Holder may assign their respective rights hereunder
in the manner and to the persons and entities as permitted under the Security
Agreement.
(i) Execution
and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be
an
original and, all of which taken together shall constitute one and the same
agreement. In the event that any signature is delivered by facsimile
or electronic transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile or
electronic signature were the original thereof.
(j) Governing
Law, Jurisdiction and Waiver of Jury Trial. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. The Company hereby
consents and agrees that the state or federal courts located in the County
of
New York, State of New York shall have exclusion jurisdiction to hear and
determine any Proceeding between the Company, on the one hand, and the Investor,
on the other hand, pertaining to this Agreement or to any matter arising out
of
or related to this Agreement; provided, that the Investor and the Company
acknowledge that any appeals from those courts may have to be heard by a court
located outside of the County of New York, State of New York, and
furtherprovided, that nothing in this Agreement shall be deemed or
operate to preclude the Investor from bringing a Proceeding in any other
jurisdiction to collect the obligations, to realize on the Collateral or any
other security for the obligations, or to enforce a judgment or other court
order in favor of the Investor. The Company expressly submits and
consents in advance to such jurisdiction in any Proceeding commenced in any
such
court, and the Company hereby waives any objection which it may have based
upon
lack of personal jurisdiction, improper venue or forum non
conveniens. The Company hereby waives personal service of the
summons, complaint and other process issued in any such Proceeding and agrees
that service of such summons, complaint and other process may be made by
registered or certified mail addressed to the Company at the address set forth
in Section 7(g) and that service so made shall be deemed completed upon the
Company’s actual receipt thereof. The parties hereto desire that
their disputes be resolved by a judge applying such applicable
laws. Therefore, to achieve the best combination of the benefits of
the judicial system and of arbitration, the parties hereto waive all rights
to
trial by jury in any Proceeding brought to resolve any dispute, whether arising
in contract, tort, or otherwise between the Investor and/or the Company arising
out of, connected with, related or incidental to the relationship established
between then in connection with this Agreement. If either party
hereto shall commence a Proceeding to enforce any provisions of this Agreement,
the Security Agreement or any Ancillary Agreement, then the prevailing party
in
such Proceeding shall be reimbursed by the other party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such Proceeding.
(k) Cumulative
Remedies. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
(l) Severability. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be
hereafter declared invalid, illegal, void or unenforceable.
(m) Headings. The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
[Balance
of page intentionally left blank; signature page follows]
11
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
.
| NEWMARKET TECHNOLOGY, INC | |||
|
Date
|
By:
|
/s/ Xxxxxx X. Xxxxxx | |
| Name: Xxxxxx X. Xxxxxx | |||
| Title: CEO | |||
| VALENS U.S. SPV I, LLC | |||
| By:Valens Capital Management, LLC, its investment manager | |||
|
Date
|
By:
|
/s/ Xxxxx Xxxxxxxxx | |
| Name: Xxxxx Xxxxxxxxx | |||
| Title: Authorized Signatory | |||
| Address for Notices: | |||
| 000 Xxxxxxx Xxxxxx, 00xx Xxxxx | |||
| Xxx Xxxx, XX 00000 | |||
| Attention: Portfolio Services | |||
| Facsimile No.: 000-000-0000 | |||
| with copy to: | |||
| Valens Capital Management, LLC | |||
| 000 Xxxxxxx Xxxxxx, 00xx Xxxxx | |||
| Xxx Xxxx, XX 00000 | |||
| Attention: Portfolio Services | |||
| Facsimile No.: 000-000-0000 | |||
12
EXHIBIT
A
____________,
200___
Continental
Stock Transfer
&
Trust Company
Two
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxxx
Xxxxxxxxx]
Re: NewMarket
Technology, Inc. Registration Statement on Form [S-3]
Ladies
and Gentlemen:
As
counsel to NewMarket Technology, Inc., a Nevada corporation (the
“Company”), we have been requested to render our opinion to you in
connection with the resale by the individuals or entitles listed on Schedule
A attached hereto (the “Selling Stockholders”), of an aggregate of
__________ shares (the “Shares”) of the Company’s Common
Stock.
A
Registration Statement on Form [S-3] under the Securities Act of 1933, as
amended (the “Act”), with respect to the resale of the Shares was
declared effective by the Securities and Exchange Commission on
[date]. Enclosed is the Prospectus dated [date]. We
understand that the Shares are to be offered and sold in the manner described
in
the Prospectus.
Based
upon the foregoing, upon request by the Selling Stockholders at any time while
the registration statement remains effective, it is our opinion that the Shares
have been registered for resale under the Act and new certificates evidencing
the Shares upon their transfer or re-registration by the Selling Stockholders
may be issued without restrictive legend. We will advise you if the
registration statement is not available or effective at any point in the
future.
Very
truly yours,
[Company
counsel]
Schedule
A to Exhibit A
|
Selling
Stockholder
|
R/N/O
|
Shares
Being
Offered
|
SCHEDULE
7(b)
