EXHIBIT 4.24
ABLE TELCOM HOLDING CORP.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of
February 4, 2000 between ABLE TELCOM HOLDING CORP., a Florida corporation with
offices at 0000 Xxxxxxx Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (the
"Company") and each of the entities listed under "Investors" on the signature
page hereto (each an "Investor" and collectively the "Investors"), each with
offices at the address listed under such Investor's name on SCHEDULE I hereto.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Convertible Preferred Stock Purchase
Agreement by and between the Company and the Investors dated as of February 4,
2000 (the "Purchase Agreement"), the Company initially has agreed to sell and
issue to the Investors, and the Investors have agreed to purchase from the
Company, an aggregate of 5,000 shares of Series C Preferred Stock (the "Series C
Preferred Stock") at an aggregate price of $15,000,000 on the terms and
conditions set forth therein;
WHEREAS, the Purchase Agreement contemplates that the Series C
Preferred Stock will be convertible into shares (the "Common Shares") of common
stock, $0.001 par value, of the Company ("Common Stock") pursuant to the terms
and conditions set forth in the Articles of Amendment to the Articles of
Incorporation of Able Telcom Holding Corp. (the "Articles of Amendment");
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investors' agreement to enter into the Purchase Agreement, the Company has
agreed to issue to the Investors warrants exercisable for 200,000 shares of
Common Stock in the form attached as EXHIBIT 1.1B; and
WHEREAS, pursuant to that certain Series B Preferred Stock Exchange
Agreement (the "Exchange Agreement") dated as of February 4, 2000 among certain
of the Investors named therein and the Company, such Investors currently hold
301,787 shares of Common Stock (the "Secondary Conversion Shares") and warrants
(the "Secondary Warrants") exercisable for shares of Common Stock (collectively
with the Secondary Conversion Shares, the "Secondary Common Shares");
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the Purchase
Agreement and this Agreement, the Company and the Investors agree as follows:
1. CERTAIN DEFINITIONS.
(a) Capitalized terms used herein and not otherwise defined
shall have the meaning ascribed thereto in the Purchase Agreement, Warrants or
the Articles of Amendment. As used in this Agreement, the following terms shall
have the following respective meanings:
"APPROVED MARKET" shall mean the Nasdaq National Market or the
American Stock Exchange or the New York Stock Exchange.
"BEST EFFORTS" means as to any party obligated to use its Best
Efforts to accomplish a particular objective that the obligated party is
required to make diligent, good faith, prompt, substantial and persistent
efforts as a prudent person desiring to achieve the applicable objective would
use in order to ensure that such objective is achieved as expeditiously as
possible; PROVIDED, HOWEVER, that an obligation to use Best Efforts shall not be
construed to limit the applicability of any remedy for default or delay by such
party under the terms of any Transaction Document, including any applicable
default payments and mandatory redemptions).
"CLOSING" and "CLOSING DATE" shall have the meanings ascribed
to such terms in the Purchase Agreement.
"COMMISSION" or "SEC" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
"DAY" shall mean calendar day.
"HOLDER" and "HOLDERS" shall include any Investor or the
Investors, respectively, and any permitted transferee of the Secondary Common
Shares, Series C Preferred Stock, Warrants, Warrant Shares or Common Shares or
Registrable Securities which have not been sold to the public to whom the
registration rights conferred by this Agreement have been transferred in
compliance with this Agreement.
"NOTICE OF REDEMPTION" means any written notice by a Holder
with respect to such Holder's redemption of any such shares of Series C
Preferred Stock pursuant to the provisions of the Articles of Amendment.
"REGISTRABLE SECURITIES" shall mean: (i) the Secondary Common
Shares, Common Shares and Warrant Shares issued to any Holder or its permitted
transferee or designee pursuant to the Exchange Agreement or upon conversion of
the Series C Preferred Stock or exercise of the Warrants, as applicable, or upon
any stock split, stock dividend, recapitalization or similar event with respect
to such Secondary Common Shares, Common Shares or Warrant Shares; (ii) any
securities issued or issuable to each Holder upon the conversion, exercise or
exchange of any Secondary Common Shares, Series C Preferred Stock, Warrants,
Warrant Shares, or Common Shares; and (iii) any other security of the Company
issued as a dividend or other distribution with respect to, or upon conversion
or exchange of or in replacement of Registrable Securities.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" shall
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such registration statement.
"REGISTRATION DEADLINE" shall mean the earliest date following
the filing of the Company's 1999 Form 10-K with the Commission on which the
Company, using its Best Efforts, is able to secure the effectiveness of the
Registration Statement (defined herein); PROVIDED, HOWEVER, that in no event
shall the Registration Deadline extend beyond October 31, 2000.
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"REGISTRATION EXPENSES" shall mean all expenses to be incurred
by the Company in connection with each Holder's registration rights under this
Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, "Blue Sky"
fees and expenses, and the expense of any audited financial statements incident
to or required by any such registration (but excluding the compensation of
regular employees of the Company, which shall be paid in any event by the
Company).
"REGISTRATION STATEMENT" shall have the meaning set forth in
Section 2(a) herein.
"REGULATION D" shall mean Regulation D as promulgated pursuant
to the Securities Act, and as subsequently amended.
"SECURITIES ACT" or "ACT" shall mean the Securities Act of
1933, as amended.
"SELLING EXPENSES" shall mean all reasonable underwriting
discounts and selling commissions applicable to the sale of Registrable
Securities and all reasonable fees and disbursements of counsel for Holders not
included within "Registration Expenses".
"SUSPENSION GRACE PERIOD" shall mean five (5) consecutive
Trading Days or ten (10) Trading Days in any 365-day period; PROVIDED, HOWEVER,
that upon receipt by the Holders of a written notice signed by the chief
executive officer or chief financial officer of the Company to the effect set
forth below, the Suspension Grace Period may be extended for a reasonable period
of time, but not in excess of thirty (30) days per 365-day period, (i) in order
to comply with the reasonable request of the lead underwriter in an underwritten
public offering of equity securities of the Company for the account of the
Company, or (ii) if, in connection with any pending material financing,
acquisition or corporate reorganization or other material corporate development
involving the Company, the Company determines in good faith that it must delay
or restate the disclosure of its financial statements contained in the
Registration Statement in order to make such disclosure not materially incorrect
or misleading.
"TRADING DAY" shall mean any day in which the Nasdaq Market or
other Approved Market on which the Common Stock is then listed or quoted is open
for trading; PROVIDED, HOWEVER, that in the event that the Common Stock is not
listed or quoted on an Approved Market, then Trading Day shall mean any weekday
(except any day which shall be a federal legal holiday or a day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close).
"TRANSACTION DOCUMENT," individually, and, "TRANSACTION
DOCUMENTS," collectively, shall have the meaning attributable to such term by
the Purchase Agreement.
"WARRANTS" shall mean the warrants in form and substance of
EXHIBIT 1.1B to the Purchase Agreement between the Company and the Investors
dated as of the date hereof.
"WARRANT SHARES" shall mean shares of Common Stock of the
Company issued and issuable upon exercise of the Warrants.
(b) OTHER DEFINITIONS. Each of the following terms is defined
in the Section opposite such term:
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DEFINED TERM SECTION
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AGREEMENT Preamble
ARTICLES OF AMENDMENT Preamble
COMMON SHARES Preamble
COMMON STOCK Preamble
COMPANY Preamble
CONVERSION BENEFIT 2(b)(iii)
CONVERSION DEFICIENCY 2(b)(iv)
CONVERSION NOTICE 2(b)(iv)
CONVERSION PRICE 2(a)(i)
EXCHANGE AGREEMENT Preamble
FAIR MARKET VALUE 2(b)(iv)(B)(II)
FIRST CONVERSION PRICE 2(b)(i)
FORCE MAJEURE 13(l)
INDEMNIFIED PARTY 6(c)
INDEMNIFYING PARTY 6(c)
INTERFERING EVENTS 2(b)
INVESTORS Preamble
MATURITY DATE 2(b)(vii)
NOTICE OF REDEMPTION 2(b)(i)
PREMIUM REDEMPTION PRICE 2(b)(iii)
PURCHASE AGREEMENT Preamble
PURCHASE PRICE 2(b)(iv)(B)(II)
SECONDARY COMMON SHARES Preamble
SECONDARY CONVERSION SHARES Preamble
SECONDARY WARRANTS Preamble
SERIES C PREFERRED STOCK Preamble
SUBSCRIPTION NOTICE 2(b)(iv)
TRIGGERING EVENT REDEMPTION PRICE 2(b)(iv)(B)(I)
2. REGISTRATION REQUIREMENTS. The Company shall use its Best Efforts
(as defined in the Articles of Amendment) to effect the registration of the
Registrable Securities (including without limitation the execution of an
undertaking to file post-effective amendments, appropriate qualification under
applicable blue sky or other state securities laws and appropriate compliance
with applicable regulations issued under the Securities Act) as would permit or
facilitate the sale or distribution of all the Registrable Securities in the
manner (including manner of sale) and in all states reasonably requested by the
Holder on an Approved Market. Such Best Efforts by the Company shall include the
following:
(a) The Company shall, as expeditiously as reasonably possible
after the Closing Date:
(i) Prepare and file a registration statement with the
Commission pursuant to Rule 415 under the Securities Act on Form S-3 under the
Securities Act (or in the event
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that the Company is ineligible to use such form, such other form as the Company
is eligible to use under the Securities Act) covering the Registrable Securities
("Registration Statement") which Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein not
misleading. Such Registration Statement shall, in addition and without
limitation, register (pursuant to Rule 416 under the Securities Act, or
otherwise) such additional indeterminate number of Registrable Securities as
shall be necessary to permit the conversion in full of the Series C Preferred
Stock or exercise of the Warrants (A) to prevent dilution resulting from stock
splits, stock dividends or similar transactions or (B) by reason of changes in
the Conversion Price (as defined in Section 3(b) of the Articles of Amendment).
Thereafter, the Company shall use its Best Efforts to cause such Registration
Statement and other filings to be declared effective as soon as possible, and in
any event on or prior to the Registration Deadline. The number of shares of
Common Stock initially included in such Registration Statement shall be no less
than the total outstanding Secondary Common Shares, plus (x) the number of
shares of Common Stock for which the Series C Preferred Stock are at any time
convertible in full, assuming a Conversion Price of $4.00 and (y) 105% of the
number of Warrant Shares that are then issuable upon the exercise of the
Warrants, in each case, without regard to any limitation on the Investor's
ability to convert the Series C Preferred Stock or exercise the Warrants. The
Company acknowledges that such number of shares of Common Stock to be initially
included in the Registration Statement includes a good faith estimate of the
maximum number of shares issuable upon conversion of the Series C Preferred
Stock and exercise of the Warrants.
(ii) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in connection
with such Registration Statement as may be necessary to keep the Registration
Statement effective and to comply with the provisions of the Act with respect to
the disposition of all securities covered by such Registration Statement until
such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement and notify the Holders of the
filing and effectiveness of such Registration Statement and any amendments or
supplements. In the event the number of shares available under a Registration
Statement filed pursuant to this Agreement is insufficient to cover all of the
Registrable Securities issued or issuable upon conversion of the Series C
Preferred Stock and exercise of the Warrants, the Company shall amend the
Registration Statement, or file a new Registration Statement (on the short form
available therefore, if applicable), or both, so as to cover all of the
Registrable Securities, in each case, as soon as practicable, but in any event
within twenty (20) Trading Days after the necessity therefor arises (based on
the market price of the Common Stock and other relevant factors on which the
Company reasonably elects to rely). The Company shall use its Best Efforts to
cause such amendment and/or new Registration Statement to become effective as
soon as practicable following the filing thereof. The provisions of Section
2(b)(i) below shall be applicable with respect to such obligation.
(iii) Furnish to each Holder such numbers of copies of a
current prospectus conforming with the requirements of the Act, copies of the
Registration Statement, any amendment or supplement thereto and any documents
incorporated by reference therein and such other documents as such Holder may
reasonably require in order to facilitate the disposition of Registrable
Securities owned by such Holder and, in the case of the Registration Statement
referred to in Section 2(a)(i), each letter written by or on behalf of the
Company to the SEC or the staff of
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the SEC, and each item of correspondence from the SEC or the staff of the SEC,
in each case relating to such Registration Statement (other than any portion of
any thereof which contains information for which the Company has sought
confidential treatment). The Company will immediately notify each Investor by
facsimile of the effectiveness of the Registration Statement or any
post-effective amendment. The Company will promptly respond to any and all
comments received from the SEC, with a view towards causing any Registration
Statement or any amendment thereto to be declared effective by the SEC as soon
as practicable and shall promptly file an acceleration request as soon as
practicable following the resolution or clearance of all SEC comments or, if
applicable, following notification by the SEC that the Registration Statement or
any amendment thereto will not be subject to review.
(iv) (a) Register and qualify, or obtain an appropriate
exemption from registration or qualification, the securities covered by such
Registration Statement under such other securities or "Blue Sky" laws of such
jurisdictions as shall be reasonably requested by each Holder (b) prepare and
file in those jurisdictions such supplements (including post-effective
amendments) and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof, (c) take such other actions as
may be necessary to maintain such registrations and qualifications in effect at
all times, and (iv) take all other actions reasonably necessary or advisable to
qualify the Registrable Securities for sale in such jurisdictions; PROVIDED that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions, and shall not be required to
register or qualify in any jurisdiction where such registration or qualification
is not permitted or approved by such jurisdiction following the Company's Best
Efforts to obtain such permission or approval.
(v) Notify each Holder immediately of the happening of any
event as a result of which the prospectus (including any supplements thereto or
thereof) included in such Registration Statement, as then in effect, includes an
untrue statement of material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and use its Best Efforts to promptly
update and/or correct such prospectus to correct such untrue statement or
omission, and deliver such number of copies of such supplement or amendment to
each Holder as such Holder may reasonably request.
(vi) Notify each Holder immediately of the issuance by the
Commission or any state securities commission or agency of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose. The Company shall take all reasonable actions
necessary to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible time.
(vii) Permit a single firm of counsel, designated as
Holders' counsel by a majority-in-interest of the Registrable Securities
included in the Registration Statement, to review the Registration Statement and
all amendments and supplements thereto within a reasonable period of time prior
to each filing, and shall not file any document in a form to which such counsel
reasonably objects and will not request acceleration of the Registration
Statement without prior notice to such counsel. The sections of the Registration
Statement covering information with respect to the Investors, the Investor's
beneficial ownership of securities of the Company or the
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Investors' intended method of disposition of Registrable Securities shall,
subject to applicable requirements of the Securities Act and SEC rules
thereunder, conform to the information provided to the Company by each of the
Investors.
(viii) List the Registrable Securities covered by such
Registration Statement with all securities exchange(s) and/or markets on which
the Common Stock is then listed and prepare and file any required filings with
the National Association of Securities Dealers, Inc. or any exchange or market
where the shares of Common Stock are traded.
(ix) If applicable, take all steps necessary to enable
Holders to avail themselves of the prospectus delivery mechanism set forth in
Rule 153 (or successor thereto) under the Act.
(x) The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(a) disclosure of such information is necessary to comply with federal or state
securities laws, (b) the disclosure of such information is necessary to avoid or
correct a misstatement or omission in any Registration Statement, (c) the
release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction, or (d) such
information has been made generally available to the public other than by
disclosure in violation of this or any other agreement. The Company agrees that
it shall, upon learning that disclosure of such information concerning an
Investor is sought in or by a court of governmental body of competent
jurisdiction or through other means, give prompt notice to such Investor prior
to making such disclosure, and allow the Investor, at its expense, to undertake
appropriate action to prevent disclosure of, or obtain a protective order for,
such information.
(xi) The Company shall provide a transfer agent and
registrar, which may be a single entity, for the Registrable Securities not
later than the effective date of the Registration Statement.
(xii) The Company shall cooperate with the Investors who
hold Registrable Securities being offered and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends with respect to
transferability) representing Registrable Securities to be offered pursuant to
the Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the managing underwriter or
underwriters, if any, or the Investors may reasonably request and registered in
such names as the managing underwriter or underwriters, if any, or the Investors
may request, and, within three (3) Trading Days after a Registration Statement
which includes Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel selected by the Company to
deliver, to the transfer agent for the Registrable Securities (with copies to
the Investors whose Registrable Securities are included in such Registration
Statement) an instruction in the form attached hereto as EXHIBIT 1 and an
opinion of such counsel in the form attached hereto as EXHIBIT 2.
(xiii) At the reasonable request of the holders of a
majority-in-interest of the Registrable Securities, the Company shall prepare
and file with the SEC such amendments (including post-effective amendments) and
supplements to a Registration Statement and the
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prospectus used in connection with the Registration Statement as may be
necessary in order to change the plan of distribution set forth in such
Registration Statement.
(xiv) From and after the date of this Agreement, the
Company shall not, and shall not agree to, allow the holders of any securities
of the Company to include any of their securities in any Registration Statement
under Section 2(a) hereof or any amendment or supplement thereto under Section
3(b) hereof without the consent of the holders of a majority-in-interest of the
Registrable Securities.
(xv) The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by the Investors of Registrable
Securities pursuant to the Registration Statement.
(b) Set forth below in this Section 2(b) are (i) events that
may arise that the Investors consider will interfere with the full enjoyment of
their rights under the Articles of Amendment, the Purchase Agreement and this
Agreement (the "Interfering Events"), and (ii) certain remedies applicable in
each of these events.
Paragraphs (i) through (iv) of this Section 2(b) describe
the Interfering Events, provide a remedy to the Investors if an Interfering
Event occurs and provide that the Investors may require that the Company redeem
outstanding shares of Series C Preferred Stock at a specified price if certain
Interfering Events are not timely cured.
Paragraph (v) provides, INTER ALIA, that if cash payments
required as the remedy in the case of certain of the Interfering Events are not
paid when due, the Company may be required by the Investors to redeem
outstanding shares of Series C Preferred Stock at a specified price.
Paragraph (vi) provides, INTER ALIA, that the Investors
have the right to specific performance.
The preceding paragraphs in this Section 2(b) are meant to
serve only as an introduction to this Section 2(b), are for convenience only,
and are not to be considered in applying, construing or interpreting this
Section 2(b).
(i) DELAY IN EFFECTIVENESS OF REGISTRATION STATEMENT. The
Company agrees that it shall file the Registration Statement complying with the
requirements of this Agreement as expeditiously as possible following the date
of the closing of the Purchase Agreement (the "Closing Date") and shall use its
Best Efforts to cause such Registration Statement to become effective on or
before the Registration Deadline. In the event the Registration Statement has
not been declared effective by the Commission on or before the Registration
Deadline, then the Conversion Price shall be reduced by 10% on the day following
the Registration Deadline and shall be further reduced by an additional 1% on
the last day of each successive 30-day period after the Registration Deadline
until the Registration Statement has been declared effective. For example, if
the Registration Statement does not become effective until 70 days from the
Registration Deadline, the Conversion Price during days 1 through 30 shall be
equal to 90% of the Conversion Price in effect on the Registration Deadline (the
"first Conversion Price"). The Conversion Price from day 31 through day 60 shall
be equal
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to 89% of the first Conversion Price; and from day 61 and thereafter the
Conversion Price shall be equal to 88% of the first Conversion Price. In each
case, the Conversion Price shall be subject to further adjustment as set forth
in the Articles of Amendment.
(ii) NO LISTING; PREMIUM PRICE REDEMPTION FOR DELISTING OF
CLASS OF SHARES. In the event that shares of Common Stock of the Company are
delisted from the Nasdaq National Market (or any other Approved Market where
they are currently listed) at any time following the Closing Date and remain
delisted for more than the Suspension Grace Period, then at the option of each
Holder and to the extent such Holder so elects, the Company shall redeem the
Series C Preferred Stock and/or Registrable Securities held by such Holder, in
whole or in part, in accordance with Sections 4(b), 4(d)(iii) and 4(f) of the
Articles of Amendment; PROVIDED, HOWEVER, that the delisting of the Common Stock
from one Approved Market concurrently with the listing of the Common Stock on
another Approved Market shall not provide a Holder with the right to redeem
Series C Preferred Stock and/or Registrable Securities under this paragraph.
(iii) BLACKOUT PERIODS. At any time after the effective
date of the Registration Statement, in the event that the effectiveness of the
Registration Statement is suspended for more than the Suspension Grace Period,
including without limitation by reason of any suspension or stop order with
respect to the Registration Statement or the fact that an event has occurred as
a result of which the prospectus (including any supplements thereto) included in
such Registration Statement then in effect includes an untrue statement of
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, then the Company shall pay in cash to each Holder
an amount equal to three percent (3%) of the Liquidation Value for the Series C
Preferred Stock held by such Holder for each 30-day period (prorated for any
partial period) from and after the expiration of the Suspension Grace Period. At
any time after the fifth (5th) Trading Day following the expiration of the
Suspension Grace Period, a Holder shall have the right to have the Company
redeem its Series C Preferred Stock and/or Registrable Securities, in whole or
in part, as follows: (I) in the case of Series C Preferred Stock, such shares
shall be redeemable at a price per share equal to the Triggering Event
Redemption Price and in accordance with Sections 4(b), 4(d)(ii) and 4(f) of the
Articles of Amendment; and (II) in the case of Registrable Securities, such
shares shall be redeemed in accordance with the procedures in Section 4(f) of
the Articles of Amendment at a redemption price (the "Premium Redemption Price")
equal to the greater of (1) 1.2 times the dollar amount that is the product of
(x) the number of shares so to be redeemed pursuant to this clause, and (y) the
Conversion Price as of the date of delivery of the Notice of Redemption (as
defined in Section 3(b) of the Articles of Amendment), or (2) the Conversion
Benefit (as defined in Section 4(b) of the Articles of Amendment).
(iv) CONVERSION DEFICIENCY; PREMIUM PRICE REDEMPTION FOR
CONVERSION DEFICIENCY. In the event that the Company does not have a sufficient
number of shares of Common Stock registered for resale under the Registration
Statement (or which are exempt from the registration requirements under Act
pursuant to Rule 144(k) under the Act) available to satisfy the Company's
obligations to any Holder upon receipt of a Conversion Notice (as defined in the
Articles of Amendment) or Subscription Notice (as defined in the Warrant) or is
otherwise unable or unwilling to issue such shares of Common Stock (including
without limitation by reason of the limit described in Section 10 below) in
accordance with the terms of the Articles of Amendment for any reason after
receipt of a Conversion Notice (each, a "Conversion Deficiency") then:
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(A) The Company shall pay in cash to each Holder an
amount equal to three percent (3%) of the Liquidation Value for the Series C
Preferred Stock held by such Holder for each 30-day period (or portion thereof)
that the Company fails or refuses to issue Common Shares in accordance with the
terms of the Articles of Amendment; and
(B) At any time five (5) days after the commencement
of the running of the first 30-day period described above in clause (A) of this
paragraph (iv), each Holder, at such Holder's option by delivery to the Company
of a Notice of Redemption, shall: (I) in the case of a Conversion Deficiency
with respect to a Conversion Notice, have the right to have the Company either
(1) redeem from such Holder (i) the number shares of Series C Preferred Stock
equal to such Holder's pro rata share of the Deficiency (as defined below) at a
purchase price equal to the Triggering Event Redemption Price as of that
Conversion Date (if the failure to issue Common Shares results from the lack of
a sufficient number thereof), or (ii) all (or such portion as such Holder may
elect) of such Holder's shares of Series C Preferred Stock (if the failure to
issue Common Shares results from any other cause); and (II) in the case of a
Conversion Deficiency with respect to a Subscription Notice, pay such Holder an
amount in cash equal to the product of (1) the Deficiency and (2) the difference
between the "fair market value" (as defined in the Warrant and Secondary
Warrants) as of the Trading Day next immediately preceding the date of exercise
of the Warrant or Secondary Warrants, as applicable, and the Purchase Price (as
defined in the Warrant and Secondary Warrants). With respect to any Conversion
Deficiency relating to a Conversion Notice, the "Deficiency" shall be equal to
the number of Common Shares required to be issued upon receipt of a Conversion
Notice if all outstanding shares of Series C Preferred Stock eligible for
conversion were submitted for conversion at the Conversion Price as provided in
the Articles of Amendment as of the date the Deficiency is determined, less the
number of Common Shares available for issuance upon receipt of such Conversion
Notice. With respect to any Conversion Deficiency relating to a Subscription
Notice, the "Deficiency" shall be equal to the number of shares of Common Stock
required to be issued upon receipt of a Subscription Notice if all outstanding
Warrants or Secondary Warrants, as applicable, eligible for exercise were
exercised at the Purchase Price as of the date the Deficiency is determined,
less the number of shares of Common Stock available for issuance upon receipt of
such Subscription Notice. Any request by a Holder pursuant to this paragraph
(iv)(B) shall be revocable by that Holder at any time prior to redemption of
such shares of Series C Preferred Stock.
(v) PREMIUM PRICE REDEMPTION FOR CASH PAYMENT DEFAULTS.
(A) The Company acknowledges that any failure, refusal
or inability by the Company described in the foregoing paragraphs (i) through
(iv) will cause the Holders to suffer damages in an amount that will be
difficult to ascertain, including without limitation damages resulting from the
loss of liquidity in the Registrable Securities and the additional investment
risk in holding the Registrable Securities. Accordingly, the parties agree that
it is appropriate to include in this Agreement the foregoing provisions for
default payments, discounts and mandatory redemptions in order to compensate the
Holders for such damages. The parties acknowledge and agree that the default
payments, discounts and mandatory redemptions set forth above represent the
parties' good faith effort to quantify such damages and, as such, agree that the
form and amount of such default payments, discounts and mandatory redemptions
are reasonable and will not constitute a penalty.
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(B) Each default payment provided for in the foregoing
paragraphs (ii) through (iv) shall be in addition to each other default payment.
All default payments (which payments shall be pro rata on a per diem basis for
any period of less than thirty (30) days) required to be made in connection with
the above provisions shall be paid in cash at any time upon demand, and whether
or not a demand is made, by the tenth (10th) day of each calendar month for each
partial or full 30-day period occurring prior to that date.
(C) In accordance with Section 3(e)(iv) of the
Articles of Amendment, in the event that the Company fails or refuses to pay any
default payment or honor any penalty or similar amounts when due, at any
Holder's option and request by delivery of a Notice of Redemption the Company
shall purchase all or a portion of the Series C Preferred Stock and/or
Registrable Securities held by such Holder (with any default payment penalty or
similar amounts accruing through the date of such purchase), within five (5)
Trading Days of such request, at a purchase price equal to the Premium
Redemption Price (as defined above); PROVIDED that such Holder may revoke such
request at any time prior to receipt of such payment of such purchase price.
Until such time as the Company purchases such Series C Preferred Stock at the
request of such Holder pursuant to the preceding sentence, at any Holder's
request and option the Company shall as to such Holder pay such amount by adding
and including the amount of such default payment to the Conversion Amount and
the Liquidation Value instead of in cash.
(vi) CUMULATIVE REMEDIES. The default payments and
mandatory redemptions provided for above are in addition to and not in lieu or
limitation of any other rights the Holders may have at law, in equity, including
without limitation the right to specific performance. Each Holder shall be
entitled to specific performance of any and all obligations of the Company in
connection with the registration rights of the Holders hereunder. The parties
hereto agree that default payments and mandatory redemptions applicable under
the circumstances and conditions specified in this Agreement shall be
complementary to, and not cumulative with, any substantially identical default
payments and mandatory redemptions applicable under the same such circumstances
and conditions by the terms of the Articles of Amendment.
(vii) DEFERRAL OF MATURITY DATE. In the event of a failure
of Effective Registration, including without limitation by reason of any of the
circumstances described in the foregoing clauses (i) through (iv) above, then
the Maturity Date (as defined in the Articles of Amendment) shall be deferred by
1.5 days for each day that any of the circumstances in clauses (i), (ii), (iii)
(without regard to the applicability of the Suspension Grace Period), or (iv)
exist.
(c) Subject to Section 2(b) above, the Company may suspend the
use of any prospectus used in connection with the Registration Statement only in
the event, and for such period of time as, such a suspension is required by the
rules and regulations of the Commission. The Company will use its Best Efforts
to cause such suspension to terminate at the earliest possible date.
(d) The Company shall file a Registration Statement with
respect to any newly authorized and/or reserved shares, if necessary to fulfill
its obligations under this Agreement within five (5) Trading Days of any
shareholders meeting authorizing same and shall use its Best Efforts to cause
such Registration Statement to become effective within sixty (60) days of such
shareholders meeting. If the Holders become entitled, pursuant to an event
described in clause (iii) of the definition of Registrable Securities, to
receive any securities in respect of Registrable Securities that
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were already included in a Registration Statement, subsequent to the date such
Registration Statement is declared effective, and the Company is unable under
the securities laws to add such securities to the then effective Registration
Statement, the Company shall promptly file, in accordance with the procedures
set forth herein, an additional Registration Statement with respect to such
newly Registrable Securities. The Company shall use its Best Efforts to (i)
cause any such additional Registration Statement, when filed, to become
effective under the Securities Act, and (ii) keep such additional Registration
Statement effective during the period described in Section 5 below. All of the
registration rights and remedies under this Agreement shall apply to the
registration of such newly reserved shares and such new Registrable Securities,
including without limitation the provisions providing for default payments
contained herein.
(e) If the Holder(s) intend to distribute the Registrable
Securities by means of an underwriting, the Holder(s) shall so advise the
Company. Any such underwriting may only be administered by investment bankers
reasonably satisfactory to the Company. The Company shall only be obligated to
permit one underwritten offering, which offering shall be determined by a
majority-in-interest of the Holders.
(f) In the event of an underwriting pursuant to Section 2(e),
the Company shall enter into such customary agreements for a secondary offering
and take all such other reasonable actions reasonably requested by the Holders
in connection therewith in order to expedite or facilitate the disposition of
such Registrable Securities and in such connection, whether or not an
underwriting agreement is entered into and whether or not the Registrable
Securities are to be sold in an underwritten offering:
(i) make such representations and warranties to the
Holders and the underwriter or underwriters, if any, in form, substance and
scope as are customarily made by issuers to underwriters in secondary offerings;
(ii) use its Best Efforts to cause to be delivered to the
sellers of Registrable Securities and the underwriter or underwriters, if any,
opinions of independent counsel to the Company, on and dated as of the effective
day (or in the case of an underwritten offering, dated the date of delivery of
any Registrable Securities sold pursuant thereto) of the Registration Statement,
and within 90 days following the end of each fiscal year thereafter, which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Holders and the underwriter(s), if any, and their counsel
and covering, without limitation, such matters as the due authorization and
issuance of the securities being registered and compliance with securities laws
by the Company in connection with the authorization, issuance and registration
thereof and other matters that are customarily given to underwriters in
underwritten offerings, addressed to the Holders and each underwriter, if any;
(iii) cause to be delivered, immediately prior to the
effectiveness of the Registration Statement (and, in the case of an underwritten
offering, at the time of delivery of any Registrable Securities sold pursuant
thereto), and at the beginning of each fiscal year following a year during which
the Company's independent certified public accountants shall have reviewed any
of the Company's books or records, a "comfort" letter and updates thereof from
the Company's independent certified public accountants addressed to the Holders
and each underwriter, if any, stating that such accountants are independent
public accountants within the
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meaning of the Securities Act and the applicable published rules and regulations
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 secondary offerings,
and each such letter and update thereof, if any, shall be reasonably
satisfactory to the Holders;
(iv) if an underwriting agreement is entered into, the
same shall include customary indemnification and contribution provisions to and
from the underwriters and procedures for secondary underwritten offerings;
(v) deliver such documents and certificates as may be
reasonably requested by the Holders of the Registrable Securities being sold or
the managing underwriter or underwriters, if any, to evidence compliance with
clause (i) above and with any customary conditions contained in the underwriting
agreement, if any; and
(vi) deliver to the Holders on the effective day (or in
the case of an underwritten offering, dated the date of delivery of any
Registrable Securities sold pursuant thereto) of the Registration Statement, and
at the beginning of each fiscal quarter thereafter, a certificate in form and
substance as shall be reasonably satisfactory to the Holders, executed by an
executive officer of the Company and to the effect that all the representations
and warranties of the Company contained in the Purchase Agreement are still true
and correct except as disclosed in such certificate; the Company shall, as to
each such certificate delivered at the beginning of each fiscal quarter, update
or cause to be updated each such certificate during such quarter so that it
shall remain current, complete and correct throughout such quarter; and such
updates received by the Holders during such quarter, if any, shall have been
reasonably satisfactory to the Holders.
3. EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance with registration
pursuant to this Agreement shall be borne by the Company, and all Selling
Expenses of a Holder shall be borne by such Holder.
4. REGISTRATION ON FORM S-3. The Company shall seek to qualify or
continue to qualify for registration on Form S-3 or any comparable or successor
form or forms, or in the event that the Company is ineligible to use such form,
such form as the Company is eligible to use under the Securities Act.
5. REGISTRATION PERIOD. In the case of the registration effected by the
Company pursuant to this Agreement, the Company will use its Best Efforts to
keep such registration effective until all the Holders have completed the sales
or distribution described in the Registration Statement relating thereto or, if
earlier, until such Registrable Securities may be sold under Rule 144(k)
(PROVIDED that the Company's transfer agent has accepted an instruction from the
Company to such effect).
6. INDEMNIFICATION.
(a) THE COMPANY INDEMNITY. The Company will indemnify each Holder,
each of its officers, directors and partners, and each person controlling each
Holder, within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder with respect to which
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registration, qualification or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls, within
the meaning of Section 15 of the Securities Act and the rules and regulations
thereunder, any underwriter, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by the Company of the
Securities Act or any state securities law or in either case, any rule or
regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each Holder, each of its
officers, directors and partners, and each person controlling such Holder, each
such underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
PROVIDED that the Company will not be liable in any such case to a Holder to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission based upon written information
furnished to the Company by such Holder or the underwriter (if any) therefor and
stated to be specifically for use therein. The indemnity agreement contained in
this Section 6(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company (which consent will not be unreasonably withheld).
(b) HOLDER INDEMNITY. Each Holder will, severally and not jointly,
if Registrable Securities held by it are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors, officers, partners, and each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder, each
other Holder (if any), and each of their officers, directors and partners, and
each person controlling such other Holder(s) against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statement therein not
misleading, and will reimburse the Company and such other Holder(s) and their
directors, officers and partners, underwriters or control persons for any legal
or any other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
and stated to be specifically for use therein, and PROVIDED that the maximum
amount for which such Holder shall be liable under this indemnity shall not
exceed the net proceeds received by such Holder from the sale of the Registrable
Securities. The indemnity agreement contained in this Section 6(b) shall not
apply to amounts paid in settlement of any such claims, losses, damages or
liabilities if such settlement is effected without the consent of such Holder
(which consent shall not be unreasonably withheld).
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(c) PROCEDURE. Each party entitled to indemnification under this
Article (the "Indemnified Party") shall give notice to the party required to
provide indemnification (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 in any litigation resulting therefrom, PROVIDED that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at such party's expense, 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 Article
except to the extent that the Indemnifying Party is materially and adversely
affected by such failure to provide notice. 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 to such claim or litigation. Each Indemnified Party shall furnish
such information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
7. CONTRIBUTION. If the indemnification provided for in Section 6
herein is unavailable to the Indemnified Parties in respect of any losses,
claims, damages or liabilities referred to herein (other than by reason of the
exceptions provided therein), 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 losses, claims, damages or
liabilities as between the Company on the one hand and any Holder on the other,
in such proportion as is appropriate to reflect the relative fault of the
Company and of such Holder 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 on the one
hand and of any Holder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Holder.
In no event shall the obligation of any Indemnifying Party to
contribute under this Section 7 exceed the amount that such Indemnifying Party
would have been obligated to pay by way of indemnification if the
indemnification provided for under Section 6(a) or 6(b) hereof had been
available under the circumstances.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by PRO RATA
allocation (even if the Holders or the underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraphs shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this section, no Holder or underwriter shall
be required to contribute any amount in excess of the amount by which (i) in the
case of any Holder, the net
-15-
proceeds received by such Holder from the sale of Registrable Securities or (ii)
in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such Holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person liable for
or 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 liable for or guilty of such fraudulent misrepresentation.
8. SURVIVAL. The indemnity and contribution agreements contained in
Sections 6 and 7 shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement or the Purchase Agreement or any
underwriting agreement, (ii) any investigation made by or on behalf of any
Indemnified Party or by or on behalf of the Company, and (iii) the consummation
of the sale or successive resales of the Registrable Securities.
9. INFORMATION BY HOLDERS. Each Holder shall furnish to the Company
such information regarding such Holder and the distribution and/or sale proposed
by such Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Agreement. The intended method or methods of
disposition and/or sale (Plan of Distribution) of such securities as so provided
by such Investor shall be included without alteration in the Registration
Statement covering the Registrable Securities and shall not be changed without
written consent of such Holder or its designated representative.
10. NASDAQ LIMIT ON STOCK ISSUANCES. Notwithstanding anything to the
contrary herein, the Company shall not be obligated to issue or register with
the SEC any shares of Common Stock to the extent that such issuance or
registration is prohibited by any rule, regulation or policy of Nasdaq or any
exchange or market upon which the Common Stock may be traded.
11. REPLACEMENT CERTIFICATES. The certificate(s) representing the
Common Shares or Warrant Shares held by any Investor (or then Holder) may be
exchanged by such Investor (or such Holder) at any time and from time to time
for certificates with different denominations representing an equal aggregate
number of Common Shares or Warrant Shares, as reasonably requested by such
Investor (or such Holder) upon surrendering the same. No service charge will be
made for such registration or transfer or exchange.
12. TRANSFER OR ASSIGNMENT. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the Investors by
the Company under this Agreement to cause the Company to register Registrable
Securities may be transferred or assigned (in whole or in part) to a transferee
or assignee of Series C Preferred Stock or Warrants which transfer has been
effected in compliance with the Articles of Amendment and Warrants, and all
other rights granted to the Investors by the Company hereunder may be
transferred or assigned to any transferee or assignee of any Series C Preferred
Stock or Warrants; PROVIDED that in each case that the Company must be given
written notice by the such Investor at the time of or within a reasonable time
after said transfer or assignment, stating the name and address of said
transferee or assignee and identifying the securities with respect to which such
registration rights are being transferred or assigned; and PROVIDED,
-16-
FURTHER, that the transferee or assignee of such rights agrees in writing to be
bound by the registration provisions of this Agreement.
13. MISCELLANEOUS.
(a) REMEDIES. The Company and the Investors acknowledge and agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof, this being in addition to any other remedy to which any of
them may be entitled by law or equity.
(b) JURISDICTION. THE COMPANY AND EACH OF THE INVESTORS (I) HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT, THE NEW YORK STATE COURTS AND OTHER COURTS OF THE UNITED STATES SITTING
IN NEW YORK COUNTY, NEW YORK FOR THE PURPOSES OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND (II) HEREBY WAIVES, AND AGREES
NOT TO ASSERT IN ANY SUCH SUIT ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER. THE COMPANY AND EACH OF THE INVESTORS CONSENTS
TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY
THEREOF TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS
AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING IN THIS PARAGRAPH SHALL AFFECT OR
LIMIT ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
(c) NOTICES. Any notice or other communication required or
permitted to be given hereunder shall be in writing by facsimile, mail or
personal delivery and shall be effective upon actual receipt of such notice. The
addresses for such communications shall be:
to the Company:
Able Telcom Holding Corp.
0000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxx
President and Chief Executive Officer
with copies to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
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to the Investors:
The Palladin Group, L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
with copies to:
Xxxxxx & Xxxxxx
000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: X. Xxxxxxxxx Xxxxxx, Esq.
Any party hereto may from time to time change its address for notices by giving
at least ten (10) days' written notice of such changed address to the other
parties hereto.
(d) WAIVERS. No waiver by any party of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter. The representations and warranties and the agreements and
covenants of the Company and each Investor contained herein shall survive the
Closing.
(e) EXECUTION. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, it
being understood that all parties need not sign the same counterpart.
(f) PUBLICITY. The Company agrees that it will not disclose, and
will not include in any public announcement, the name of any Investor without
its consent, unless and until such disclosure is required by law or applicable
regulation, and then only to the extent of such requirement.
(g) ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement, the Articles of Amendment and the Warrants and the agreements and
documents contemplated hereby and thereby, contains the entire understanding and
agreement of the parties, and may not be modified or terminated except by a
written agreement signed by both parties. In the event of a conflict or
inconsistency between this Agreement and any term of the Articles of Amendment,
the Articles of Amendment shall prevail.
-18-
(h) GOVERNING LAW; CONSENT OF JURISDICTION. THIS AGREEMENT AND THE
VALIDITY AND PERFORMANCE OF THE TERMS HEREOF SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED ENTIRELY IN SUCH STATE AND,
WHERE APPLICABLE, FEDERAL LAW.
(i) SEVERABILITY. The parties acknowledge and agree that the
Investors are not agents, affiliates or partners of each other, that all
representations, warranties, covenants and agreements of the Investors hereunder
are several and not joint, that no Investor shall have any responsibility or
liability for the representations, warrants, agreements, acts or omissions of
any other Investor, and that any rights granted to Investors hereunder shall be
enforceable by each Investor hereunder.
(j) JURY TRIAL. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY
JURY.
(k) TITLES. The titles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
(l) FORCE MAJEURE. The Company shall not be liable for any default
or delay in the performance of its obligations under this Agreement if and only
to the extent such delay or default is caused by Force Majeure (as defined in
the Articles of Amendment); PROVIDED, HOWEVER, that no event of Force Majeure
shall excuse any such default or delay for longer than an aggregate of thirty
(30) days in any calendar year.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ABLE TELCOM HOLDING CORP.
By:
-------------------------------------------------
Name:
Title:
INVESTORS:
HALIFAX FUND, L.P.
By: The Palladin Group, L.P., as
Investment Manager
By:
-------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
THE GLENEAGLES FUND COMPANY
By: The Palladin Group, L.P., as
Investment Manager
By:
-------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
-20-
PALLADIN OVERSEAS FUND LIMITED
By: The Palladin Group, L.P., as
Investment Manager
By:
-------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
PALLADIN PARTNERS I, L.P.
By: Palladin Asset Management, LLC,
as Investment Manager
By:
-------------------------------------------------
Name:
Title:
LANCER SECURITIES (CAYMAN) LIMITED
By: The Palladin Group, L.P., as
Investment Manager
By:
-------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
PGEP III, LLC
By: The Palladin Group, L.P., as
Investment Manager
By:
-------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
-21-
QUATTRO FUND LIMITED
By: Quattro Investors LP
By:
-------------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Principal
[SIGNATURE PAGES TO ABLE TELECOM HOLDING CORP. REGISTRATION RIGHTS AGREEMENT]
-22-
SCHEDULE 1
-23-
EXHIBIT 1
TO REGISTRATION
RIGHTS AGREEMENT
[Company Letterhead]
[Date]
[Name and address of Transfer Agent]
Ladies and Gentlemen:
This letter shall serve as our irrevocable authorization and direction
to you (1) to transfer or re-register (or at the holders request to reissue to
the holder thereof without any restrictive legend) the certificates for the
shares of Common Stock, par value $0.001 per share (the "COMMON STOCK"), of Able
Telcom Holding Corp., a Florida corporation (the "COMPANY") represented by
certificate numbers ____ for an aggregate of ____ shares (the "OUTSTANDING
SHARES") of Common Stock presently registered in the name of [Name of Investor]
(the "INVESTOR") (which shares were previously issued pursuant to the Settlement
Agreement dated February , 2000 among the Company and [Name of Investor] and
other parties thereto, or upon conversion of the Preferred Shares (as
hereinafter defined) or exercise of the Warrants (as hereinafter defined)), upon
surrender of such certificates to you, notwithstanding the legend appearing on
such certificates, (2) to issue shares (the "CONVERSION SHARES") of Common Stock
to or upon the order of the registered holder from time to time of shares of
Series C Convertible Preferred Stock of the Company (the "PREFERRED SHARES")
upon surrender to you of a properly completed and duly executed Conversion
Notice notwithstanding the legend appearing on such certificates and (3) to
issue shares (the "WARRANT SHARES") of Common Stock to or upon the order of the
registered holder from time to time of the Warrants of the Company (the
"WARRANTS") upon surrender to you of a properly completed and duly executed
Subscription Notice and such Warrants notwithstanding the legend appearing on
such Warrants. The transfer or re-registration of the certificates for the
Outstanding Shares by you should be made at such time as you are requested to do
so by the record holder of the Outstanding Shares. The certificate issued upon
such transfer or re-registration should be registered in such name as requested
by the holder of record of the certificate surrendered to you and should not
bear any legend which would restrict the transfer of the shares represented
thereby. In addition, you are hereby directed to remove any stop-transfer
instruction relating to the Outstanding Shares. Certificates for the Conversion
Shares and Warrant Shares should not bear any restrictive legend and should not
be subject to any stop-transfer restriction.
-24-
Pursuant to applicable securities laws or certain agreements between
the Company and the Investor, the Investor may be prohibited during certain
limited periods of time from selling its Outstanding Shares or other shares of
Common Stock issuable upon conversion of the Preferred Shares and exercise of
the Warrants under the Registration Statement; PROVIDED, HOWEVER, that such
Investor may continue to sell such securities pursuant to an exemption from
registration under the Securities Act of 1933, as amended (the "SECURITIES
ACT"). The Company may, during such periods, deliver a notice to you advising
you to refrain from transferring any Outstanding Shares pursuant to such
Registration Statement, PROVIDED that such notice shall not prohibit the
transfer of such shares pursuant to an exemption from registration under the
Securities Act during such periods.
Contemporaneous with the delivery of this letter, the Company is
delivering to you a letter of ____________________ as to registration of the
Outstanding Shares and the Conversion Shares under the Securities Act of 1933,
as amended.
Should you have any questions concerning this matter, please contact
me.
Very truly yours,
ABLE TELECOM HOLDING CORP.
By:
-------------------------------------------------
Name:
Title:
Enclosures:
cc: [Name of Investor]
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EXHIBIT 2
TO REGISTRATION
RIGHTS AGREEMENT
[Date]
[Name and address
of Transfer Agent]
RE: ABLE TELCOM HOLDING CORP.
Ladies and Gentlemen:
We are counsel to Able Telcom Holding Corp., a Florida corporation (the
"COMPANY"), and we understand that [Name of Investor] (the "HOLDER") has
purchased from the Company shares of the Company's Series C Convertible
Preferred Stock (the "PREFERRED STOCK") and warrants (the "WARRANTS") that are
convertible or exercisable into the Company's Common Stock, par value $0.001 per
share (the "COMMON STOCK"). The Preferred Stock and Warrants were purchased by
the Holder pursuant to a Preferred Stock Purchase Agreement, dated as of
February , 2000, between the Holder and the Company (the "AGREEMENT") or a
Settlement Agreement between the Holder and the Company. Pursuant to a
Registration Rights Agreement, dated as of February , 2000, between the Company
and the Holder (the "REGISTRATION RIGHTS AGREEMENT"), the Company agreed with
the Holder, among other things, to register the Registrable Securities (as that
term is defined in the Registration Rights Agreement) under the Securities Act
of 1933, as amended (the "SECURITIES ACT"), upon the terms provided in the
Registration Rights Agreement. In connection with the Company's obligations
under the Registration Rights Agreement, on _______, 20 , the Company filed a
Registration Statement on Form S-[ ] (File No. 333-___________) (the
"REGISTRATION STATEMENT") with the Securities and Exchange Commission relating
to the Registrable Securities, which names the Holder as a selling stockholder
thereunder.
[Other introductory language to be inserted]
Based on the foregoing, we are of the opinion that the Registrable
Securities have been registered under the Securities Act.
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[Other appropriate language to be included.]
Very truly yours,
cc: [Name of investor]
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