GLOBAL SECURE CORP. REGISTRATION RIGHTS AGREEMENT
Exhibit 4.4
This Agreement dated as of August 9, 2005 is entered into by and between Global Secure
Corp., a Delaware corporation (the “Company”), and Xxxx X. Xxxxxxx (the “Investor”).
Recitals
WHEREAS, the Company and the Investor desire to provide for certain arrangements with respect
to the registration of shares of capital stock of the Company under the Securities Act (as defined
below);
NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this
Agreement, the parties hereto agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the following respective meanings:
“Commission” means the Securities and Exchange Commission, or any other federal agency
at the time administering the Securities Act.
“Common Stock” means the common stock, $0.0001 par value per share, of the Company.
“Company” has the meaning ascribed to it in the introductory paragraph hereto.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor
federal statute, and the rules and regulations of the Commission issued under such Act, as they
each may, from time to time, be in effect.
“Indemnified Party” means a party entitled to indemnification pursuant to Section 2.4.
“Indemnifying Party” means a party obligated to provide indemnification pursuant to
Section 2.4.
“Initial Public Offering” means the initial underwritten public offering of shares of
Common Stock pursuant to an effective Registration Statement.
“Other Individual Holder” means C. Xxxxxx XxXxxxxx.
“Prospectus” means the prospectus included in any Registration Statement, as amended
or supplemented by an amendment or prospectus supplement, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by reference in such
Prospectus.
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“Registrable Shares” means (a) the 4,485,294 shares of Common Stock currently held by
the Investor (subject to appropriate adjustment for stock splits, stock dividends,
recapitalizations and similar events occurring after the date of this Agreement) , (b) the shares
of Common Stock issued or issuable upon conversion or exercise of the convertible preferred stock
or stock options currently held by the Investor, and (c) any other shares of Common Stock issued in
respect of such shares (because of stock splits, stock dividends, reclassifications,
recapitalizations or similar events); provided, however, that shares of Common Stock which are
Registrable Shares shall cease to be Registrable Shares (i) upon any sale or distribution pursuant
to a Registration Statement or Rule 144 under the Securities Act or (ii) at such time, following an
Initial Public Offering, as they become eligible for sale pursuant to Rule 144(k) under the
Securities Act.
“Registration Expenses” means all expenses incurred by the Company in complying with
the provisions of Section 2, including, without limitation, all registration and filing fees,
exchange listing fees, printing expenses, fees and expenses of counsel for the Company, state Blue
Sky fees and expenses, and the expense of any special audits incident to or required by any such
registration, but excluding underwriting discounts, selling commissions and the fees and expenses
of counsel for the Investor.
“Registration Statement” means a registration statement filed by the Company with the
Commission for a public offering and sale of securities of the Company (other than (i) a
registration statement on Form S-8 or Form S-4, or their successors, or any other form for a
similar limited purpose, or any registration statement covering only securities proposed to be
issued in exchange for securities or assets of another corporation or (ii) a registration statement
filed solely to register the distribution of shares held by Sky to its stockholders).
“Securities Act” means the Securities Act of 1933, as amended, or any successor
federal statute, and the rules and regulations of the Commission issued under such Act, as they
each may, from time to time, be in effect.
“Sky” means Sky Capital Enterprises Inc.
2. Registration Rights.
2.1 Incidental Registration.
(a) Whenever the Company proposes to file a Registration Statement at any time and from time
to time, it will, prior to such filing, give written notice to the Investor of its intention to do
so. Upon the written request of the Investor given within 20 days after the Company provides such
notice (which request shall state the intended method of disposition of such Registrable Shares),
the Company shall use its best efforts to cause all Registrable Shares which the Company has been
requested by the Investor to register to be registered under the Securities Act to the extent
necessary to permit their sale or other disposition in accordance with the intended methods of
distribution specified in the request of the Investor; provided that the Company shall have the
right to postpone or withdraw any registration initiated pursuant to this Section 2.1 without
obligation to the Investor.
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(b) If the registration for which the Company gives notice pursuant to Section 2.1(a) is a
registered public offering involving an underwriting, the Company shall so advise the Investor as a
part of the written notice given pursuant to Section 2.1(a). In such event, (i) the right of the
Investor to include its Registrable Shares in such registration pursuant to this Section 2.1 shall
be conditioned upon the Investor’s participation in such underwriting on the terms set forth herein
and (ii) the Investor, if it desires to include Registrable Shares in such registration, shall
enter into an underwriting agreement upon customary terms with the underwriter or underwriters
selected for the underwriting by the Company; provided that such underwriting agreement
shall not provide for indemnification or contribution obligations on the part of the Investor
materially greater than the obligations of the Investor pursuant to Section 2.4. If the Investor
disapproves of the terms of the underwriting, it may elect, subject to the terms of any
power-of-attorney and/or custody arrangements it may have entered into, by written notice to the
Company, to withdraw its shares from such Registration Statement and underwriting. If the managing
underwriter advises the Company in writing that marketing factors require a limitation on the
number of shares to be underwritten, then (x) first the shares held by holders of securities of the
Company other than the Investor, Sky and the Other Individual Holder (but not including the
Company) shall be excluded from such Registration Statement and underwriting to the extent deemed
advisable by the managing underwriter, and (y) if a further reduction of the number of shares is
required, the number shall be so reduced (A) first by reducing the number of shares to be included
by the Investor and the Other Individual Holder, such reduction to be made in such proportions
between them so that they are each able to include shares in the Registration Statement pro rata in
accordance with the number of Registrable Shares then held by each of them, and (b) second, if a
further reduction is required, by reducing the number of shares that may be included by Sky.
2.2 Registration Procedures.
(a) If and whenever the Company is required by the provisions of this Agreement to use its
best efforts to effect the registration of any Registrable Shares under the Securities Act, the
Company shall:
(i) file with the Commission a Registration Statement with respect to such Registrable Shares
as expeditiously as possible and use its best efforts to cause that Registration Statement to
become effective as soon as possible;
(ii) as expeditiously as possible prepare and file with the Commission any amendments and
supplements to the Registration Statement and the prospectus included in the Registration Statement
as may be necessary to comply with the provisions of the Securities Act (including the anti-fraud
provisions thereof) and to keep the Registration Statement effective for 12 months from the
effective date or such lesser period until all such Registrable Shares are sold;
(iii) as expeditiously as possible furnish to the Investor such reasonable numbers of copies
of the Prospectus, including any preliminary Prospectus, in conformity with the requirements of the
Securities Act, and such other documents as the Investor may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares;
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(iv) as expeditiously as possible use its best efforts to register or qualify the Registrable
Shares covered by the Registration Statement under the securities or Blue Sky laws of such states
as the Investor shall reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the Investor to consummate the public sale or other disposition in
such states of the Registrable Shares; provided, however, that the Company shall not be required in
connection with this paragraph (iv) to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction or to amend its Certificate of Incorporation or
By-laws in a manner that the Board of Directors of the Company determines is inadvisable;
(v) as expeditiously as possible, cause all such Registrable Shares to be listed on each
securities exchange or automated quotation system on which similar securities issued by the Company
are then listed;
(vi) promptly provide a transfer agent and registrar for all such Registrable Shares not later
than the effective date of such Registration Statement;
(vii) promptly make available for inspection by the Investor, any managing underwriter
participating in any disposition pursuant to such Registration Statement, and any attorney or
accountant or other agent retained by any such underwriter or selected by the Investor, all
financial and other records, pertinent corporate documents and properties of the Company and cause
the Company’s officers, directors, employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection
with such Registration Statement;
(viii) notify the Investor, promptly after it shall receive notice thereof, of the time when
such Registration Statement has become effective or a supplement to any Prospectus forming a part
of such Registration Statement has been filed; and
(ix) as expeditiously as possible following the effectiveness of such Registration Statement,
notify the Investor of any request by the Commission for the amending or supplementing of such
Registration Statement or Prospectus.
(b) If the Company has delivered a Prospectus to the Investor and after having done so the
Prospectus is amended to comply with the requirements of the Securities Act, the Company shall
promptly notify the Investor and, if requested, the Investor shall immediately cease making offers
of Registrable Shares and shall return all Prospectuses to the Company. The Company shall promptly
provide the Investor with revised Prospectuses and, following receipt of the revised Prospectuses,
the Investor shall be free to resume making offers of the Registrable Shares.
(c) In the event that, in the judgment of the Company, it is advisable to suspend use of a
Prospectus included in a Registration Statement filed pursuant to Section 2.1 due to pending
material developments or other events that have not yet been publicly disclosed and as to which the
Company believes public disclosure would be detrimental to the Company, the Company shall notify
the Investor to such effect, and, upon receipt of such notice, the Investor shall immediately
discontinue any sales of Registrable Shares pursuant to such
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Registration Statement until the Investor has received copies of a supplemented or amended
Prospectus or until the Investor is advised in writing by the Company that the then current
Prospectus may be used and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in such Prospectus.
2.3 Allocation of Expenses. The Company will pay all Registration Expenses for all
registrations under this Agreement.
2.4 Indemnification and Contribution.
(a) In the event of any registration of any of the Registrable Shares under the Securities Act
pursuant to this Agreement, the Company will indemnify and hold harmless the Investor, each
underwriter of Registrable Shares, and each other person, if any, who controls the Investor or such
underwriter within the meaning of the Securities Act or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which the Investor, or such underwriter or
controlling person may become subject under the Securities Act, the Exchange Act, state securities
or Blue Sky laws or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement under which such Registrable
Shares were registered under the Securities Act, any preliminary prospectus or final prospectus
contained in the Registration Statement, or any amendment or supplement to such Registration
Statement, (ii) the omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or (iii) any violation or
alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law
or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state
securities law in connection with the Registration Statement or the offering or distribution
contemplated thereby; and the Company will reimburse the Investor, any such underwriter and each
such controlling person for any legal or any other expenses reasonably incurred by the Investor or
such underwriter or controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that with respect to each of
the foregoing the Company will not be liable to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or omission made in such Registration
Statement, preliminary prospectus or prospectus, or any such amendment or supplement, in reliance
upon and in conformity with information furnished to the Company, in writing, by or on behalf of
the Investor or any such underwriter or controlling person specifically for use in the preparation
thereof.
(b) In the event of any registration of any of the Registrable Shares under the Securities Act
pursuant to this Agreement, the Investor will indemnify and hold harmless the Company, each of its
directors and officers and each underwriter (if any) and each person, if any, who controls the
Company or any such underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities, joint or several, to which the Company, such
directors and officers, underwriter or controlling person may become subject under the Securities
Act, Exchange Act, state securities or Blue Sky laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in any Registration
Statement under which such Registrable Shares were
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registered under the Securities Act, any preliminary prospectus or final prospectus contained
in the Registration Statement, or any amendment or supplement to the Registration Statement, or
(ii) any omission or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, if and to the extent (and only to the
extent) that the statement or omission was made in reliance upon and in conformity with information
relating to the Investor furnished in writing to the Company by the Investor specifically for use
in connection with the preparation of such Registration Statement, prospectus, amendment or
supplement; provided, however, that the obligations of the Investor hereunder in
connection with the sale of Registrable Shares under a Registration Statement shall be limited to
an amount equal to the net proceeds to the Investor of the Registrable Shares sold in connection
with such registration.
(c) Each Indemnified Party shall give notice to the Indemnifying Party promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting
therefrom; provided, however, that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose
approval shall not be unreasonably withheld, conditioned or delayed); and, provided,
further, that the failure of any Indemnified Party to give notice as provided herein shall
not relieve the Indemnifying Party of its obligations under this Section 2.4 except to the extent
that the Indemnifying Party is materially and adversely prejudiced by such failure. The Indemnified
Party may participate in such defense at such party’s expense; provided, however,
that the Indemnifying Party shall pay such expense if the Indemnified Party reasonably concludes
that representation of such Indemnified Party by the counsel retained by the Indemnifying Party
would be inappropriate due to actual or potential differing interests between the Indemnified Party
and any other party represented by such counsel in such proceeding; provided
further that in no event shall the Indemnifying Party be required to pay the expenses of
more than one law firm per jurisdiction as counsel for the Indemnified Party. The Indemnifying
Party also shall be responsible for the expenses of such defense if the Indemnifying Party does not
elect to assume such defense. No Indemnifying Party, in the defense of any such claim or
litigation shall, except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in
respect of such claim or litigation, and no Indemnified Party shall consent to entry of any
judgment or settle such claim or litigation without the prior written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld, conditioned or delayed.
(d) In order to provide for just and equitable contribution in circumstances in which the
indemnification provided for in this Section 2.4 is due in accordance with its terms but for any
reason is held to be unavailable to an Indemnified Party in respect to any losses, claims, damages
and liabilities referred to herein, then the Indemnifying Party shall, in lieu of indemnifying such
Indemnified Party, contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities to which such party may be subject in such
proportion as is appropriate to reflect the relative fault of the Company on the one hand and the
Investor on the other in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company and the Investor shall be determined by
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reference to, among other things, whether the untrue or alleged untrue statement of material
fact related to information supplied by the Company or the Investor and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission. The Company and the Investor agree that it would not be just and equitable if
contribution pursuant to this Section 2.4(d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 2.4(d), in connection with the sale of Registrable
Shares pursuant to a Registration Statement, in no case shall the Investor be liable or responsible
for any amount in excess of the net proceeds received by the Investor from the offering of
Registrable Shares; provided, however, that 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. Any party
entitled to contribution will, promptly after receipt of notice of commencement of any action, suit
or proceeding against such party in respect of which a claim for contribution may be made against
another party or parties under this Section 2.4(d), notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve such party from any other obligation it or they may
have thereunder or otherwise under this Section 2.4(d). No party shall be liable for contribution
with respect to any action, suit, proceeding or claim settled without its prior written consent,
which consent shall not be unreasonably withheld, conditioned or delayed.
(e) The rights and obligations of the Company and the Investor under this Section 2.4 shall
survive the termination of this Agreement.
2.5 Other Matters with Respect to Underwritten Offerings. In the event that
Registrable Shares are sold pursuant to a Registration Statement in an underwritten offering
pursuant to Section 2.1, the Company agrees to (a) enter into an underwriting agreement containing
customary representations and warranties with respect to the business and operations of the Company
and customary covenants and agreements to be performed by the Company, including without limitation
customary provisions with respect to indemnification by the Company of the underwriters of such
offering; (b) use its best efforts to cause its legal counsel to render customary opinions to the
underwriters with respect to the Registration Statement; and (c) use its best efforts to cause its
independent public accounting firm to issue customary “cold comfort letters” to the underwriters
with respect to the Registration Statement.
2.6 Information by Investor. The Investor shall furnish to the Company such
information regarding the Investor as the Company may reasonably request and as shall be required
in connection with any registration, qualification or compliance referred to in this Agreement.
Such information provided by the Investor shall not contain any untrue statement of a material fact
or omit any material fact required to be stated in the related registration statement or necessary
to make the statements therein with respect to the Investor not misleading.
2.7 Confidentiality of Notices. In the event the Investor receives any written
notice from the Company regarding the Company’s plans to file a Registration Statement, the
Investor shall treat such notice confidentially and shall not disclose such information to any
person other than as necessary to exercise its rights under this Agreement.
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2.8 Rule 144 Requirements. After the earliest of (i) the closing of the sale of
securities of the Company pursuant to a Registration Statement, (ii) the registration by the
Company of a class of securities under Section 12 of the Exchange Act, or (iii) the issuance by the
Company of an offering circular pursuant to Regulation A under the Securities Act, the Company
agrees to:
(a) make and keep current public information about the Company available, as those terms are
understood and defined in Rule 144; and
(b) use its best efforts to file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act (at any time after
it has become subject to such reporting requirements).
2.9 Termination. All of the Company’s obligations to register Registrable Shares
under Section 2.1 shall terminate upon the earliest of (a) five years after the closing of the
Initial Public Offering or (b) the date on which the Investor holds no Registrable Shares.
3. Transfers of Rights. This Agreement, and the rights and obligations of the
Investor hereunder, may not be assigned by the Investor.
4. General.
4.1 Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
4.2 Specific Performance. In addition to any and all other remedies that may be
available at law in the event of any breach of this Agreement, the Investor shall be entitled to
specific performance of the agreements and obligations of the Company hereunder and to such other
injunctive or other equitable relief as may be granted by a court of competent jurisdiction.
4.3 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
4.4 Notices. All notices, requests, consents and other communications under this
Agreement shall be in writing and shall be deemed delivered (i) three business days after being
sent by registered or certified mail, return receipt requested, postage prepaid or (ii) one
business day after being sent via a reputable nationwide overnight courier service guaranteeing
next business day delivery, in each case to the intended recipient as set forth below:
If to the Company, at 0000 Xxxxxxxx Xxx. XX, Xxxxx 000, Xxxxxxxxxx, XX 00000, Attention:
General Counsel, or at such other address as may have been furnished in writing by the
Company to the Investor; or
If to the Investor, at 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or
at such other address as may have been furnished in writing by the Investor to the other
parties hereto, with a copy to Xxxxxxx X. Xxxxxx, Esq., 000 Xxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, XX 00000.
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Any party may give any notice, request, consent or other communication under this Agreement
using any other means (including, without limitation, personal delivery, messenger service,
telecopy, first class mail or electronic mail), but no such notice, request, consent or other
communication shall be deemed to have been duly given unless and until it is actually received by
the party for whom it is intended. Any party may change the address to which notices, requests,
consents or other communications hereunder are to be delivered by giving the other parties notice
in the manner set forth in this Section 4.4.
4.5 Complete Agreement. This Agreement constitutes the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings relating to such subject matter.
4.6 Amendments and Waivers. This Agreement may be amended or terminated and the
observance of any term of this Agreement may be waived with the written consent of the Company and
the Investor. No waivers of or exceptions to any term, condition or provision of this Agreement,
in any one or more instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.
4.7 Pronouns. Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns
and pronouns shall include the plural, and vice versa.
4.8 Counterparts; Facsimile Signatures. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of which together shall
constitute one and the same document. This Agreement may be executed by facsimile signatures.
4.9 Section Headings and References. The section headings are for the convenience of
the parties and in no way alter, modify, amend, limit or restrict the contractual obligations of
the parties. Any reference in this agreement to a particular section or subsection shall refer to
a section or subsection of this Agreement, unless specified otherwise.
[Signatures on following page]
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Executed as of the date first written above.
| GLOBAL SECURE CORP. | |||||||
| By: | /s/ Xxxxx X. Xxxxxx | ||||||
| Print Name: | Xxxxx X. Xxxxxx | ||||||
| Print Title: | President and CEO | ||||||
| /s/ Xxxx X. Xxxxxxx | |||||||
| Xxxx X. Xxxxxxx | |||||||
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