Contract
Exhibit
10.12
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the
day of
,
2005, by and among: Fortress America Acquisition Corporation, a Delaware
corporation (the “Company”); and the undersigned parties listed under Investors
on the signature page hereto (each, an “Investor” and collectively, the
“Investors”).
WHEREAS,
the Investors currently hold all of the issued and outstanding securities of the
Company;
WHEREAS,
the Investors and the Company desire to enter into this Agreement to provide the
Investors with certain rights relating to the registration of shares of Common
Stock held by them;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS.
The following capitalized terms used herein have the following
meanings:
“Agreement” means
this Agreement, as amended, restated, supplemented, or otherwise modified from
time to time.
“Commission” means
the Securities and Exchange Commission, or any other federal agency then
administering the Securities Act or the Exchange Act.
“Common
Stock” means
the common stock, par value $0.0001 per share, of the Company.
“Company” is
defined in the preamble to this Agreement.
“Demand
Registration” is
defined in Section 2.1.1.
“Demanding
Holder” is
defined in Section 2.1.1.
“Exchange
Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder, all as the same shall be in effect at
the time.
“Form
S-3” is
defined in Section 2.3.
“Indemnified
Party” is
defined in Section 4.3.
“Indemnifying
Party” is
defined in Section 4.3.
“Investor” is
defined in the preamble to this Agreement.
“Investor
Indemnified Party” is
defined in Section 4.1.
“Maximum
Number of Shares” is
defined in Section 2.1.4.
“Notices” is
defined in Section 6.3.
“Piggy-Back
Registration” is
defined in Section 2.2.1.
“Register,”
“registered” and
“registration” mean a
registration effected by preparing and filing a registration statement or
similar document in compliance with the requirements of the Securities Act, and
the applicable rules and regulations promulgated thereunder, and such
registration statement becoming effective.
“Registrable
Securities” mean
all of the shares of Common Stock owned or held by Investors. Registrable
Securities include any warrants, shares of capital stock or other securities of
the Company issued as a dividend or other distribution with respect to or in
exchange for or in replacement of such shares of Common Stock. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when: (a) a Registration Statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been sold, transferred, disposed of or exchanged in
accordance with such Registration Statement; (b) such securities shall have
been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not require registration under the
Securities Act; (c) such securities shall have ceased to be outstanding, or
(d) the Securities and Exchange Commission makes a definitive determination to
the Company that the Registrable Securities are salable under Rule
144(k).
“Registration
Statement” means a
registration statement filed by the Company with the Commission in compliance
with the Securities Act and the rules and regulations promulgated thereunder for
a public offering and sale of Common Stock (other than a registration statement
on Form S-4 or Form S-8, or their successors, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another entity).
“Release
Date” means
the date on which shares of Common Stock are disbursed from escrow pursuant to
Section 3 of that certain Stock Escrow Agreement dated as of
,
2005 by and among the parties hereto and Continental Stock Transfer & Trust
Company.
“Securities
Act” means
the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.
“Underwriter” means a
securities dealer who purchases any Registrable Securities as principal in an
underwritten offering and not as part of such dealer’s market-making
activities.
2.
REGISTRATION RIGHTS.
2.1
Demand Registration.
2.1.1.
Request for Registration.
At any time and from time to time on or after the Release Date, the holders of a
majority-in-interest of the Registrable Securities held by the Investors or the
transferees of the Investors, may make a written demand for registration under
the Securities Act of all or part of their Registrable Securities (a
“Demand
Registration”).
Any demand for a Demand Registration shall specify the number of shares of
Registrable Securities proposed to be sold and the intended method(s) of
distribution thereof. The Company will notify all holders of Registrable
Securities of the demand, and each holder of Registrable Securities who wishes
to include all or a portion of such holder’s Registrable Securities in the
Demand Registration (each such holder including shares of Registrable Securities
in such registration, a “Demanding
Holder”) shall
so notify the Company within fifteen (15) days after the receipt by the holder
of the notice from the Company. Upon any such request, the Demanding
Holders shall be entitled to have their Registrable Securities included in the
Demand Registration, subject to Section 2.1.4 and the provisos set forth in
Section 3.1.1. The Company shall not be obligated to effect more than
an aggregate of two (2) Demand Registrations under this Section 2.1.1 in
respect of Registrable Securities.
2.1.2.
Effective Registration. A
registration will not count as a Demand Registration until the Registration
Statement filed with the Commission with respect to such Demand Registration has
been declared effective and the Company has complied with all of its obligations
under this Agreement with respect thereto;
provided,
however, that
if, after such Registration Statement has been declared effective, the offering
of Registrable Securities pursuant to a Demand Registration is interfered with
by any stop order or injunction of the Commission or any other governmental
agency or court, the Registration Statement with respect to such Demand
Registration will be deemed not to have been declared effective, unless and
until, (i) such stop order or injunction is removed, rescinded or otherwise
terminated, and (ii) a majority-in-interest of the Demanding Holders thereafter
elect to continue the offering;
provided,
further, that
the Company shall not be obligated to file a second Registration Statement until
a Registration Statement that has been filed is counted as a Demand Registration
or is terminated.
2.1.3.
Underwritten Offering.
If a majority-in-interest of the Demanding Holders so elect and such holders so
advise the Company as part of their written demand for a Demand Registration,
the offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of an underwritten offering. In such event, the right of
any holder to include its Registrable Securities in such registration shall be
conditioned upon such holder’s participation in such underwriting and the
inclusion of such holder’s Registrable Securities in the underwriting to the
extent provided herein. All Demanding Holders proposing to distribute
their securities through such underwriting shall enter into an underwriting
agreement in customary form with the Underwriter or Underwriters selected for
such underwriting by a majority-in-interest of the holders initiating the Demand
Registration.
2.1.4.
Reduction of Offering.
If the managing Underwriter or Underwriters for a Demand Registration that is to
be an underwritten offering advises the Company and the Demanding Holders in
writing that the dollar amount or number of shares of Registrable Securities
which the Demanding Holders desire to sell, taken together with all other shares
of Common Stock or other securities which the Company desires to sell and the
shares of Common Stock, if any, as to which registration has been requested
pursuant to written contractual piggy-back registration rights held by other
shareholders of the Company who desire to sell, exceeds the maximum dollar
amount or maximum number of shares that can be sold in such offering without
adversely affecting the proposed offering price, the timing, the distribution
method, or the probability of success of such offering (such maximum dollar
amount or maximum number of shares, as applicable, the “Maximum
Number of Shares”), then
the Company shall include in such registration: (i) first, the Registrable
Securities as to which Demand Registration has been requested by the Demanding
Holders (pro
rata in
accordance with the number of shares of Registrable Securities which such
Demanding Holder has requested be included in such registration, regardless of
the number of shares of Registrable Securities held by each Demanding Holder)
that can be sold without exceeding the Maximum Number of Shares; (ii) second, to
the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (i), the shares of Common Stock or other securities that the
Company desires to sell that can be sold without exceeding the Maximum Number of
Shares; (iii) third, to the extent that the Maximum Number of Shares has not
been reached under the foregoing clauses (i) and (ii), the shares of Common
Stock for the account of other persons that the Company is obligated to register
pursuant to written contractual arrangements with such persons and that can be
sold without exceeding the Maximum Number of Shares; and (v) fourth, to the
extent that the Maximum Number of Shares have not been reached under the
foregoing clauses (i), (ii), and (iii), the shares of Common Stock that other
shareholders desire to sell that can be sold without exceeding the Maximum
Number of Shares.
2.1.5.
Withdrawal. If a
majority-in-interest of the Demanding Holders disapprove of the terms of any
underwriting or are not entitled to include all of their Registrable Securities
in any offering, such majority-in-interest of the Demanding Holders may elect to
withdraw from such offering by giving written notice to the Company and the
Underwriter or Underwriters of their request to withdraw prior to the
effectiveness of the Registration Statement filed with the Commission with
respect to such Demand Registration. If the majority-in-interest of the
Demanding Holders withdraws from a proposed offering relating to a Demand
Registration, then such registration shall not count as a Demand Registration
provided for in Section 2.1.1.
2.2
Piggy-Back Registration.
2.2.1.
Piggy-Back Rights.
If at any time on or after the Release Date the Company proposes to file a
Registration Statement under the Securities Act with respect to an offering of
equity securities, or securities or other obligations exercisable or
exchangeable for, or convertible into, equity securities, by the Company for its
own account or for shareholders of the Company for their account (or by the
Company and by shareholders of the Company including, without limitation,
pursuant to Section 2.1), other than a Registration Statement (i) filed in
connection with any employee stock option or other benefit plan, (ii) for an
exchange offer or offering of securities solely to the Company’s existing
shareholders, (iii) for an offering of debt that is convertible into equity
securities of the Company or (iv) for a dividend reinvestment plan, then
the Company shall (x) give written notice of such proposed filing to the holders
of Registrable Securities as soon as practicable but in no event less than ten
(10) days before the anticipated filing date, which notice shall describe the
amount and type of securities to be included in such offering, the intended
method(s) of distribution, and the name of the proposed managing Underwriter or
Underwriters, if any, of the offering, and (y) offer to the holders of
Registrable Securities in such notice the opportunity to register the sale of
such number of shares of Registrable Securities as such holders may request in
writing within fifteen (15) days following receipt of such notice (a
“Piggy-Back
Registration”).
The Company shall cause such Registrable Securities to be included in such
registration and shall use its best efforts to cause the managing Underwriter or
Underwriters of a proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggy-Back Registration to be included
on the same terms and conditions as any similar securities of the Company and to
permit the sale or other disposition of such Registrable Securities in
accordance with the intended method(s) of distribution thereof. All
holders of Registrable Securities proposing to distribute their securities
through a Piggy-Back Registration that involves an Underwriter or Underwriters
shall enter into an underwriting agreement in customary form with the
Underwriter or Underwriters selected for such Piggy-Back
Registration.
2.2.2.
Reduction of Offering.
If the managing Underwriter or Underwriters for a Piggy-Back Registration that
is to be an underwritten offering advises the Company and the holders of
Registrable Securities in writing that the dollar amount or number of shares of
Common Stock which the Company desires to sell, taken together with shares of
Common Stock, if any, as to which registration has been demanded pursuant to
written contractual arrangements with persons other than the holders of
Registrable Securities hereunder, the Registrable Securities as to which
registration has been requested under this Section 2.2, and the shares of
Common Stock, if any, as to which registration has been requested pursuant to
the written contractual piggy-back registration rights of other shareholders of
the Company, exceeds the Maximum Number of Shares, then the Company shall
include in any such registration:
(i) If the
registration is undertaken for the Company’s account: (A) first, the shares of
Common Stock or other securities that the Company desires to sell that can be
sold without exceeding the Maximum Number of Shares; (B) second, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clause (A), the shares of Common Stock, if any, including the Registrable
Securities, as to which registration has been requested pursuant to written
contractual piggy-back registration rights of security holders (pro rata in
accordance with the number of shares of Common Stock which each such person has
actually requested to be included in such registration, regardless of the number
of shares of Common Stock with respect to which such persons have the right to
request such inclusion) that can be sold without exceeding the Maximum Number of
Shares; and
(ii) If the
registration is a “demand” registration undertaken at the demand of persons
other than the holders of Registrable Securities pursuant to written contractual
arrangements with such persons, (A) first, the shares of Common Stock for the
account of the demanding persons that can be sold without exceeding the Maximum
Number of Shares; (B) second, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clause (A), the shares of Common Stock
or other securities that the Company desires to sell that can be sold without
exceeding the Maximum Number of Shares; and (C) third, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clauses (A)
and (B), the Registrable Securities as to which registration has been requested
under this Section 2.2 (pro
rata in
accordance with the number of shares of Registrable Securities held by each such
holder); and (D) fourth, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clauses (A), (B) and (C), the
shares of Common Stock, if any, as to which registration has been requested
pursuant to written contractual piggy-back
registration rights which other shareholders desire to sell that can be sold
without exceeding the Maximum Number of Shares.
2.2.3.
Withdrawal.
Any holder of Registrable Securities may elect to withdraw such holder’s request
for inclusion of Registrable Securities in any Piggy-Back Registration by giving
written notice to the Company of such request to withdraw prior to the
effectiveness of the Registration Statement. The Company may also elect to
withdraw a registration statement at any time prior to the effectiveness of the
Registration Statement. Notwithstanding any such withdrawal, the Company
shall pay all expenses incurred by the holders of Registrable Securities in
connection with such Piggy-Back Registration as provided in
Section 3.3.
2.3
Registrations on Form S-3.
The holders of Registrable Securities may at any time and from time to time,
request in writing that the Company register the resale of any or all of such
Registrable Securities on Form S-3 or any similar short-form registration which
may be available at such time (“Form
S-3”);
provided,
however, that
the Company shall not be obligated to effect such request through an
underwritten offering. Upon receipt of such written request, the Company
will promptly give written notice of the proposed registration to all other
holders of Registrable Securities, and, as soon as practicable thereafter,
effect the registration of all or such portion of such holder’s or holders’
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other holder or holders
joining in such request as are specified in a written request given within
fifteen (15) days after receipt of such written notice from the
Company;
provided,
however, that
the Company shall not be obligated to effect any such registration pursuant to
this Section 2.3: (i) if Form S-3 is not available for such offering; or
(ii) if the holders of the Registrable Securities, together with the holders of
any other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at any
aggregate price to the public of less than $500,000. Registrations effected
pursuant to this Section 2.3 shall not be counted as Demand Registrations
effected pursuant to Section 2.1.
3.
REGISTRATION PROCEDURES.
3.1
Filings; Information.
Whenever the Company is required to effect the registration of any Registrable
Securities pursuant to Section 2, the Company shall use its best efforts to
effect the registration and sale of such Registrable Securities in accordance
with the intended method(s) of distribution thereof as expeditiously as
practicable, and in connection with any such request:
3.1.1.
Filing Registration Statement.
The Company shall, as expeditiously as possible and in any event within sixty
(60) days after receipt of a request for a Demand Registration pursuant to
Section 2.1, prepare and file with the Commission a Registration Statement
on any form for which the Company then qualifies or which counsel for the
Company shall deem appropriate and which form shall be available for the sale of
all Registrable Securities to be registered thereunder in accordance with the
intended method(s) of distribution thereof, and shall use its best efforts to
cause such Registration Statement to become and remain effective for the period
required by Section 3.1.3;
provided,
however, that
the Company shall have the right to defer any Demand Registration for up to
thirty (30) days, and any
Piggy-Back Registration for such period as may be applicable to deferment of any
demand registration to which such Piggy-Back Registration relates, in each case
if the Company shall furnish to the holders a certificate signed by the Chief
Executive Officer of the Company stating that, in the good faith judgment of the
Board of Directors of the Company, it would be materially detrimental to the
Company and its shareholders for such Registration Statement to be effected at
such time;
provided further,
however, that
the Company shall not have the right to exercise the right set forth in the
immediately preceding proviso more than once in any 365-day period in respect of
a Demand Registration hereunder.
3.1.2.
Copies.
The Company shall, prior to filing a Registration Statement or prospectus, or
any amendment or supplement thereto, furnish without charge to the holders of
Registrable Securities included in such registration, and such holders’ legal
counsel, copies of such Registration Statement as proposed to be filed, each
amendment and supplement to such Registration Statement (in each case including
all exhibits thereto and documents incorporated by reference therein), the
prospectus included in such Registration Statement (including each preliminary
prospectus), and such other documents as the holders of Registrable Securities
included in such registration or legal counsel for any such holders may request
in order to facilitate the disposition of the Registrable Securities owned by
such holders.
3.1.3.
Amendments and Supplements.
The Company shall prepare and file with the Commission such amendments,
including post-effective amendments, and supplements to such Registration
Statement and the prospectus used in connection therewith as may be necessary to
keep such Registration Statement effective and in compliance with the provisions
of the Securities Act until all Registrable Securities and other securities
covered by such Registration Statement have been disposed of in accordance with
the intended method(s) of distribution set forth in such Registration Statement
(which period shall not exceed the sum of one hundred eighty (180) days plus any
period during which any such disposition is interfered with by any stop order or
injunction of the Commission or any governmental agency or court) or such
securities have been withdrawn.
3.1.4.
Notification.
After the filing of a Registration Statement, the Company shall promptly, and in
no event more than two (2) business days after such filing, notify the holders
of Registrable Securities included in such Registration Statement of such
filing, and shall further notify such holders promptly and confirm such advice
in writing in all events within two (2) business days of the occurrence of any
of the following: (i) when such Registration Statement becomes
effective; (ii) when any post-effective amendment to such Registration
Statement becomes effective; (iii) the issuance or threatened issuance by
the Commission of any stop order (and the Company shall take all actions
required to prevent the entry of such stop order or to remove it if entered);
and (iv) any request by the Commission for any amendment or supplement to
such Registration Statement or any prospectus relating thereto or for additional
information or of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of the securities covered by such Registration Statement, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and promptly make available to the holders of
Registrable Securities included in such Registration Statement any such
supplement or amendment; except that before filing with the Commission a
Registration Statement or
prospectus or any amendment or supplement thereto, including documents
incorporated by reference, the Company shall furnish to the holders of
Registrable Securities included in such Registration Statement and to the legal
counsel for any such holders, copies of all such documents proposed to be filed
sufficiently in advance of filing to provide such holders and legal counsel with
a reasonable opportunity to review such documents and comment thereon, and the
Company shall not file any Registration Statement or prospectus or amendment or
supplement thereto, including documents incorporated by reference, to which such
holders or their legal counsel shall object.
3.1.5. State
Securities Laws Compliance.
The Company shall use its best efforts to (i) register or qualify the
Registrable Securities covered by the Registration Statement under such
securities or “blue sky” laws of such jurisdictions in the United States as the
holders of Registrable Securities included in such Registration Statement (in
light of their intended plan of distribution) may request and (ii) take
such action necessary to cause such Registrable Securities covered by the
Registration Statement to be registered with or approved by such other
Governmental Authorities as may be necessary by virtue of the business and
operations of the Company and do any and all other acts and things that may be
necessary or advisable to enable the holders of Registrable Securities included
in such Registration Statement to consummate the disposition of such Registrable
Securities in such jurisdictions;
provided,
however, that
the Company shall not be required to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (e) or subject itself to taxation in any such
jurisdiction.
3.1.6.
Agreements for Disposition.
The Company shall enter into customary agreements (including, if applicable, an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities. The representations, warranties and covenants of
the Company in any underwriting agreement which are made to or for the benefit
of any Underwriters, to the extent applicable, shall also be made to and for the
benefit of the holders of Registrable Securities included in such registration
statement. No holder of Registrable Securities included in such
registration statement shall be required to make any representations or
warranties in the underwriting agreement except, if applicable, with respect to
such holder’s organization, good standing, authority, title to Registrable
Securities, lack of conflict of such sale with such holder’s material agreements
and organizational documents, and with respect to written information relating
to such holder that such holder has furnished in writing expressly for inclusion
in such Registration Statement.
3.1.7.
Cooperation.
The principal executive officer of the Company, the principal financial officer
of the Company, the principal accounting officer of the Company and all other
officers and members of the management of the Company shall cooperate fully in
any offering of Registrable Securities hereunder, which cooperation shall
include, without limitation, the preparation of the Registration Statement with
respect to such offering and all other offering materials and related documents,
and participation in meetings with Underwriters, attorneys, accountants and
potential investors.
3.1.8.
Records.
The Company shall make available for inspection by the holders of Registrable
Securities included in such Registration Statement, any Underwriter
participating in any disposition pursuant to such registration statement and any
attorney, accountant or other professional retained by any holder of Registrable
Securities included in such Registration Statement or any Underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, as shall be necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors and employees to
supply all information requested by any of them in connection with such
Registration Statement.
3.1.9.
Opinions and Comfort Letters.
The Company shall furnish to each holder of Registrable Securities included in
any Registration Statement a signed counterpart, addressed to such holder, of
(i) any opinion of counsel to the Company delivered to any Underwriter and
(ii) any comfort letter from the Company’s independent public accountants
delivered to any Underwriter. In the event no legal opinion is delivered
to any Underwriter, the Company shall furnish to each holder of Registrable
Securities included in such Registration Statement, at any time that such holder
elects to use a prospectus, an opinion of counsel to the Company to the effect
that the Registration Statement containing such prospectus has been declared
effective and that no stop order is in effect.
3.1.10.
Earnings Statement.
The Company shall comply with all applicable rules and regulations of the
Commission and the Securities Act, and make available to its shareholders, as
soon as practicable, an earnings statement covering a period of twelve (12)
months, beginning within three (3) months after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158
thereunder.
3.1.11.
Listing.
The Company shall use its best efforts to cause all Registrable Securities
included in any registration to be listed on such exchanges or otherwise
designated for trading in the same manner as similar securities issued by the
Company are then listed or designated or, if no such similar securities are then
listed or designated, in a manner satisfactory to the holders of a majority of
the Registrable Securities included in such registration.
3.2
Obligation to Suspend Distribution.
Upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 3.1.4(iv), or, in the case of a resale
registration on Form S-3 pursuant to Section 2.3 hereof, upon any
suspension by the Company, pursuant to a written xxxxxxx xxxxxxx compliance
program adopted by the Company’s Board of Directors, of the ability of all
“insiders” covered by such program to transact in the Company’s securities
because of the existence of material non-public information and holder would be
deemed an “insider” under such program, each holder of Registrable Securities
included in any registration shall immediately discontinue disposition of such
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such holder receives the supplemented or amended
prospectus contemplated by Section 3.1.4(iv) or the restriction on the
ability of “insiders” to transact in the Company’s securities is removed or is
inapplicable to such holder, as applicable, and, if so directed by the Company,
each such holder will deliver to the Company all copies, other than permanent
file copies then in such holder’s possession, of the most recent prospectus
covering such Registrable Securities at the time of receipt of such
notice.
3.3
Registration Expenses.
The Company shall bear all costs and expenses incurred in connection with any
Demand Registration pursuant to Section 2.1, any Piggy-Back Registration
pursuant to Section 2.2, and any registration on Form S-3 effected pursuant
to Section 2.3, and all expenses incurred in performing or complying with
its other obligations under this Agreement, whether or not the Registration
Statement becomes effective, including, without limitation: (i) all
registration and filing fees; (ii) fees and expenses of compliance with
securities or “blue sky” laws (including fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities);
(iii) printing expenses; (iv) the Company’s internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees); (v) the fees and expenses incurred in connection with the
listing of the Registrable Securities as required by Section 3.1.11;
(vi) National Association of Securities Dealers, Inc. fees; (vii) fees
and disbursements of counsel for the Company and fees and expenses for
independent certified public accountants retained by the Company (including the
expenses or costs associated with the delivery of any opinions or comfort
letters requested pursuant to Section 3.1.9); (viii) the fees and
expenses of any special experts retained by the Company in connection with such
registration and (ix) the fees and expenses of one legal counsel
selected by the holders of a majority-in-interest of the Registrable Securities
included in such registration. The Company shall have no obligation to pay
any underwriting discounts or selling commissions or transfer taxes, if any,
attributable to the Registrable Securities being sold by the holders thereof,
which underwriting discounts or selling commissions or transfer taxes, if any,
shall be borne by such holders. Additionally, in an underwritten offering,
all selling shareholders and the Company shall bear the expenses of the
underwriter pro rata in proportion to the respective amount of shares each is
selling in such offering.
3.4
Information.
The holders of Registrable Securities shall provide such information as may
reasonably be requested by the Company, or the managing Underwriter, if any, in
connection with the preparation of any Registration Statement, including
amendments and supplements thereto, in order to effect the registration of any
Registrable Securities under the Securities Act pursuant to Section 2 and
in connection with the Company’s obligation to comply with federal and
applicable state securities laws.
4.
INDEMNIFICATION AND CONTRIBUTION.
4.1
Indemnification by the Company.
The Company agrees to indemnify and hold harmless each Investor and each other
holder of Registrable Securities, and each of their respective officers,
employees, affiliates, directors, partners, members and agents, and each person,
if any, who controls an Investor and each other holder of Registrable Securities
(within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) (each, an “Investor
Indemnified Party”), from
and against any expenses, losses, judgments, claims, damages or liabilities,
whether joint or several, arising out of or based upon any untrue statement (or
allegedly untrue statement) of a material fact contained in any Registration
Statement under which the sale of such Registrable Securities was registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arising out of or based upon any
omission (or alleged omission) to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
promulgated thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration; and the Company shall promptly
reimburse the Investor Indemnified Party for any legal and any other expenses
reasonably incurred by such Investor Indemnified Party in connection with
investigating and defending any such expense, loss, judgment, claim, damage,
liability or action;
provided,
however, that
the Company will not be liable in any such case to the extent that any such
expense, loss, claim, damage or liability arises out of or is based upon any
untrue statement or allegedly untrue statement or omission or alleged omission
made in such Registration Statement, preliminary prospectus, final prospectus,
or summary prospectus, or any such amendment or supplement, in reliance upon and
in conformity with information furnished to the Company, in writing, by such
selling holder expressly for use therein. The Company also shall indemnify
any Underwriter of the Registrable Securities, their officers, affiliates,
directors, partners, members and agents and each person who controls such
Underwriter on substantially the same basis as that of the indemnification
provided above in this Section 4.1.
4.2
Indemnification by Holders of Registrable Securities.
Each selling holder of Registrable Securities will, in the event that any
registration is being effected under the Securities Act pursuant to this
Agreement of any Registrable Securities held by such selling holder, indemnify
and hold harmless the Company, each of its directors and officers and each
underwriter (if any), and each other person, if any, who controls such selling
holder or such underwriter within the meaning of the Securities Act, against any
losses, claims, judgments, damages or liabilities, whether joint or several,
insofar as such losses, claims, judgments, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
allegedly untrue statement of a material fact contained in any Registration
Statement under which the sale of such Registrable Securities was registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or the alleged omission to state a material fact required to be stated
therein or necessary to make the statement therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by such selling holder expressly
for use therein, and shall reimburse the Company, its directors and officers,
and each such controlling person for any legal or other expenses reasonably
incurred by any of them in connection with investigation or defending any such
loss, claim, damage, liability or action. Each selling holder’s
indemnification obligations hereunder shall be several and not joint and shall
be limited to the amount of any net proceeds (after payment of all underwriting
fees, discounts, commissions and taxes) actually received by such selling holder
from the sale of Registrable Securities which gave rise to such indemnification
obligation.
4.3
Conduct of Indemnification Proceedings.
Promptly after receipt by any person of any notice of any loss, claim, damage or
liability or any action in respect of which indemnity may be sought pursuant to
Section 4.1 or 4.2, such person (the “Indemnified
Party”) shall,
if a claim in respect thereof is to be made against any other person for
indemnification hereunder, notify such other person (the “Indemnifying
Party”) in
writing of the loss, claim, judgment, damage, liability or action;
provided,
however, that
the failure by the Indemnified Party to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability which the Indemnifying Party
may have to such Indemnified Party hereunder, except and solely to the extent
the Indemnifying Party is actually prejudiced by such failure. If the
Indemnified Party is seeking indemnification with respect to any claim or action
brought against the
Indemnified Party, then the Indemnifying Party shall be entitled to participate
in such claim or action, and, to the extent that it wishes, jointly with all
other Indemnifying Parties, to assume control of the defense thereof with
counsel reasonably satisfactory to the Indemnified Party. After notice
from the Indemnifying Party to the Indemnified Party of its election to assume
control of the defense of such claim or action, the Indemnifying Party shall not
be liable to the Indemnified Party for any legal or other expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation;
provided,
however, that in
any action in which both the Indemnified Party and the Indemnifying Party are
named as defendants, the Indemnified Party shall have the right to employ
separate counsel (but no more than one such separate counsel) to represent the
Indemnified Party and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees and expenses of
such counsel to be paid by such Indemnifying Party if, based upon the written
opinion of counsel of such Indemnified Party, representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, consent to entry of judgment or effect
any settlement of any claim or pending or threatened proceeding in respect of
which the Indemnified Party is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such judgment or
settlement includes an unconditional release of such Indemnified Party from all
liability arising out of such claim or proceeding.
4.4
Contribution.
4.4.1. If the
indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3 is
unavailable to any Indemnified Party in respect of any loss, claim, damage,
liability or action referred to herein, then each such Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount paid
or payable by such Indemnified Party as a result of such loss, claim, damage,
liability or action in such proportion as is appropriate to reflect the relative
fault of the Indemnified Parties and the Indemnifying Parties in connection with
the actions or omissions which resulted in such loss, claim, damage, liability
or action, as well as any other relevant equitable considerations. The
relative fault of any Indemnified Party and any Indemnifying Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such Indemnified Party or
such Indemnifying Party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
4.4.2. The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.4 were determined by pro
rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
Section 4.4.1. The amount paid or payable by an Indemnified Party as
a result of any loss, claim, damage, liability or action referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 4.4, no
holder of Registrable Securities shall be required to contribute any amount in
excess of the dollar amount of the
net proceeds (after payment of all underwriting fees, discounts, commissions and
taxes) actually received by such holder from the sale of Registrable Securities
which gave rise to such contribution obligation. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
5.
UNDERWRITING AND DISTRIBUTION.
5.1
Rule 144.
The Company covenants that it shall file any reports required to be filed by it
under the Securities Act and the Exchange Act and shall take such further action
as the holders of Registrable Securities may reasonably request, all to the
extent required from time to time to enable such holders to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act, as such
Rules may be amended from time to time, or any similar Rule or regulation
hereafter adopted by the Commission.
6.
MISCELLANEOUS.
6.1 Other
Registration Rights.
The Company represents and warrants that no person, other than a holder of the
Registrable Securities, has any right to require the Company to register any
shares of the Company’s capital stock for sale or to include shares of the
Company’s capital stock in any registration filed by the Company for the sale of
shares of capital stock for its own account or for the account of any other
person.
6.2
Assignment; No Third Party Beneficiaries.
This Agreement and the rights, duties and obligations of the Company hereunder
may not be assigned or delegated by the Company in whole or in part. This
Agreement and the rights, duties and obligations of the holders of Registrable
Securities hereunder may be freely assigned or delegated by such holder of
Registrable Securities in conjunction with and to the extent of any transfer of
Registrable Securities by any such holder. This Agreement and the
provisions hereof shall be binding upon and shall inure to the benefit of each
of the parties and their respective successors and the permitted assigns of the
Investor or holder of Registrable Securities or of any assignee of the Investor
or holder of Registrable Securities. This Agreement is not intended to
confer any rights or benefits on any persons that are not party hereto other
than as expressly set forth in Article 4 and this
Section 6.2.
6.3
Notices. All
notices, demands, requests, consents, approvals or other communications
(collectively, “Notices”)
required or permitted to be given hereunder or which are given with respect to
this Agreement shall be in writing and shall be personally served, delivered by
reputable air courier service with charges prepaid, or transmitted by hand
delivery, telegram, telex or facsimile, addressed as set forth below, or to such
other address as such party shall have specified most recently by written
notice. Notice shall be deemed given on the date of service or
transmission if personally served or transmitted by telegram, telex or
facsimile;
provided, that if
such service or transmission is not on a business day or is after normal
business hours, then such notice shall be deemed given on the next business
day. Notice otherwise sent as provided herein shall be deemed given on the
next business day following timely delivery of such notice to a reputable air
courier service with an order for next-day delivery.
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To
the Company: | |
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0
Xxxxxxxx Xxxxx Xxxxxx
Xxxxx
000 | |
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Xxxxxxxx,
XX 00000 | |
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Attention:
Chairman | |
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with
a copy to: | |
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Squire,
Xxxxxxx & Xxxxxxx L.L.P. | |
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0000
Xxxxxx Xxxxxxxx Xxxxx, 00xx
Xxxxx | |
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Xxxxxx
Xxxxxx, XX 00000 | |
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Attn:
Xxxxx X. Xxxxxxx, Esq.; and | |
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Xxxxx
Xxxxx Xxxx Xxxxxx Xxxxxxx and Xxxxx, P.C. | |
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000
Xxxxx Xxxxxx | |
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Xxx
Xxxx, XX 00000 | |
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Attention:
Xxxxxxx X. Xxxx, Esq. | |
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To
an Investor, to: | |
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the
addresses listed on Exhibit A hereto |
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6.4
Severability.
This Agreement shall be deemed severable, and the invalidity or unenforceability
of any term or provision hereof shall not affect the validity or enforceability
of this Agreement or of any other term or provision hereof. Furthermore,
in lieu of any such invalid or unenforceable term or provision, the parties
hereto intend that there shall be added as a part of this Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be
possible and be valid and enforceable.
6.5
Counterparts.
This Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, and all of which taken together shall constitute one and the
same instrument.
6.6
Entire Agreement.
This Agreement (including all agreements entered into pursuant hereto and all
certificates and instruments delivered pursuant hereto and thereto) constitute
the entire agreement of the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements, representations,
understandings, negotiations and discussions between the parties, whether oral
or written.
6.7
Modifications and Amendments.
No amendment, modification or termination of this Agreement shall be binding
upon any party unless executed in writing by such party.
6.8
Titles and Headings.
Titles and headings of sections of this Agreement are for convenience only and
shall not affect the construction of any provision of this
Agreement.
6.9
Waivers and Extensions.
Any party to this Agreement may waive any right, breach or default which such
party has the right to waive,
provided that
such waiver will not be effective against the waiving party unless it is in
writing, is signed by such party, and specifically refers to this
Agreement. Waivers may be made in advance or after the right waived has
arisen or the breach or default waived has occurred. Any waiver may be
conditional. No waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach thereof
nor of any other agreement or provision herein contained. No waiver or
extension of time for performance of any obligations or acts shall be deemed a
waiver or extension of the time for performance of any other obligations or
acts.
6.10
Remedies Cumulative.
In the event that the Company fails to observe or perform any covenant or
agreement to be observed or performed under this Agreement, the Investor or any
other holder of Registrable Securities may proceed to protect and enforce its
rights by suit in equity or action at law, whether for specific performance of
any term contained in this Agreement or for an injunction against the breach of
any such term or in aid of the exercise of any power granted in this Agreement
or to enforce any other legal or equitable right, or to take any one or more of
such actions, without being required to post a bond. None of the rights,
powers or remedies conferred under this Agreement shall be mutually exclusive,
and each such right, power or remedy shall be cumulative and in addition to any
other right, power or remedy, whether conferred by this Agreement or now or
hereafter available at law, in equity, by statute or otherwise.
6.11
Governing Law. This
Agreement shall be governed by, interpreted under, and construed in accordance
with the internal laws of the State of Delaware applicable to agreements made
and to be performed within the State of Delaware, without giving effect to any
choice-of-law provisions thereof that would compel the application of the
substantive laws of any other jurisdiction.
6.12
Waiver of Trial by Jury.
Each party hereby irrevocably and unconditionally waives the right to a trial by
jury in any action, suit, counterclaim or other proceeding (whether based on
contract, tort or otherwise) arising out of, connected with or relating to this
Agreement, the transactions contemplated hereby, or the actions of the Investor
in the negotiation, administration, performance or enforcement
hereof.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to
be executed and delivered by their duly authorized representatives as of the
date first written above.
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A
Delaware corporation | ||||
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By:
____________________________________________ | |||
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Name:
Xxxxxx X. Xxxxx
Title:
President and Chief Executive Officer | |||
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INVESTORS: | ||||
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WASHINGTON
CAPITAL ADVISORS, LLC | |||
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By:
C. Xxxxxx XxXxxxxx
Title: | ||||
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Xxxxxx
X. Xxxxx | ||||
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Xxxxx
X. Xxxxxxxx | ||||
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________________________________________________ |
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Xxx
Xxxxxxxxxx | ||||
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_________________________________________________ |
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Xxxxxx
X. Xxxxxxx
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PALADIN
HOMELAND SECURITY FUND, L.P.
|
By: |
PALADIN
HOMELAND SECURITY HOLDINGS, LLC, its General
Partner |
By:
Xxxxxxx
X. Xxxxx, Authorized Signatory
PALADIN
HOMELAND SECURITY FUND (NY CITY), L.P.
|
By: |
PALADIN
HOMELAND SECURITY HOLDINGS, LLC, its General
Partner |
By:
Xxxxxxx
X. Xxxxx, Authorized Signatory
PALADIN
HOMELAND SECURITY FUND (CA), L.P.
|
By: |
PALADIN
HOMELAND SECURITY HOLDINGS, LLC, its General
Partner |
By:
Xxxxxxx
X. Xxxxx, Authorized Signatory
PALADIN
HOMELAND SECURITY FUND (CAYMAN ISLANDS), L.P.
|
By: |
PALADIN
HOMELAND SECURITY HOLDINGS (CAYMAN ISLANDS), LTD., its General
Partner |
By:
Xxxxxxx
X. Xxxxx, Authorized Signatory
