NOTE PURCHASE AGREEMENT
This Note
Purchase Agreement (this “Agreement”), dated as
of December 10, 2008, is entered into by and among Vector Investment Fund LLC, a
Delaware limited liability company (the “Borrower”), Centurion
Credit Group Master Fund L.P., a Delaware limited partnership (the “Lender”) and Vector
Intersect Security Acquisition Corp., a Delaware corporation (the “Company”).
RECITALS
WHEREAS, the Company is a
blank check company that was formed to acquire, through merger, capital stock
exchange, asset acquisition or other similar business combination, one or more
businesses in the homeland security, national security and/or command and
control industries or businesses relating to the manufacture of products for use
in such industries, and, as such (a “Business
Combination”), the Company entered into a stock purchase agreement, dated
February 14, 2008, as amended, by and among the Company, Cyalume Technologies,
Inc. (“Cyalume”), Cyalume
Acquisition Corp. and GMS Acquisition Partners Holdings, LLC, the sole
stockholder of Cyalume, pursuant to which Cyalume will become a wholly owned
subsidiary of the Company (the “Acquisition”);
WHEREAS, on or before December
26, 2008, the Company will hold a special stockholders’ meeting (the “Stockholders’
Meeting”) to vote on the Acquisition, at which meeting a majority of the
shares of the Company’s Common Stock (as defined below) must be voted to
authorize the Acquisition, and public stockholders owning less than 20% of the
shares of Common Stock sold in the Company’s April 2007 initial public offering
(the “Initial Public
Offering”) exercise their redemption rights (the “Redemption Rights”),
as provided for in the Company’s Fourth Amended and Restated Certificate of
Incorporation (the “Charter”);
WHEREAS, pursuant to the terms
of this Agreement, the Lender will provide a loan (the “Loan”) to the
Borrower, an entity controlled by an affiliate of the Company, in the principal
amount of up to Twelve Million Dollars (US$12,000,000) as evidenced by a
promissory note (the “Note”), the proceeds
of which may be employed exclusively to purchase Common Stock (as defined below)
in privately negotiated transactions from not more than ten (10) of the
Company’s Public Stockholders (as defined below) who hold Common Stock sold in
the Initial Public Offering, who would otherwise vote against the Acquisition,
and, accordingly, the Company will benefit from the Loan;
NOW, THEREFORE, in
consideration of the premises and the mutual agreements herein contained, the
parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
SECTION
1.1 Definitions. (a) As
used in this Agreement, the following terms (whether plural or singular) shall
each have the respective meanings set forth in this Article.
“Acquisition” has the
meaning set forth in the recitals.
“Business Combination”
has the meaning set forth in the recitals.
“Business Day” means a
day on which the New York Stock Exchange is open for trading for three or more
hours.
“Charter” has the
meaning set forth in the recitals.
“Closing” means when
the Note is delivered to the Lender and executed Transaction Documents, the
Prepaid Fee Note, and Legal Opinion are delivered as contemplated
therein.
“Closing Date” means
the date on which the Closing occurs.
“Common Stock” means
shares of common stock of the Company, par value $.001 per share.
“Cyalume” has the
meaning set forth in the recitals.
“Debt” means, as
applied to any Person, (i) all indebtedness for borrowed money, (ii) that
portion of obligations with respect to capital leases which is properly
classified as a liability on a balance sheet in conformity with US GAAP, (iii)
notes payable and drafts accepted representing extensions of credit whether or
not representing obligations for borrowed money, (iv) any obligation owed for
all or any part of the deferred purchase price of property or services which
purchase price is (y) due more than six months from the date of incurrence of
the obligation in respect thereof, or (z) evidenced by a note or similar written
instrument and (v) all indebtedness secured by any Lien on any property or asset
owned or held by that Person regardless of whether the indebtedness secured
thereby shall have been assumed by that Person or is nonrecourse to the credit
of that Person.
“Escrow Agent” means
Collateral Agents, LLC.
“Escrow Agreement”
means the escrow agreement, dated as of the date hereof, by and among the
Borrower, the Lender, the Company and Collateral Agents, LLC, as escrow
agent.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules promulgated
thereunder.
“Financing Fee” has
the meaning set forth in Section 2.2.
“Governmental
Authority” means the government of any nation, state, province, city,
locality or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
2
“Holder” has the
meaning set forth in Section 9.2.
“Initial Interest
Payment” means the initial interest payment payable to the Lender in the
amount of Twenty Thousand Dollars (US$20,000) as described in Section
2.2.
“Initial Public
Offering” has the meaning set forth in the recitals.
“IPO Registration
Statement” means the Company’s registration statement on Form S-1, which
was declared effective by the SEC on April 25, 2007.
“Legal Opinion” has
the meaning set forth in Section 3.2(b).
“Lien” means any lien,
mortgage, deed of trust, pledge, security interest, charge or encumbrance of any
kind (including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any security
interest).
“Liquidation” has the
meaning set forth in Section 8.2.
“Liquidation Rights”
means the right of the Public Stockholders of the Company to receive their pro
rata share in the Trust Account (as hereinafter defined), and certain other
assets of the Company, to the extent applicable, upon the dissolution of the
Company and the liquidation of the Trust Account as provided for in Paragraph
(D) of Article Fifth of the Charter.
“Loan” has the meaning
set forth in the recitals.
“Note” has the meaning
set forth in the recitals.
“Note
Shares” means the shares of Common Stock which were originally
issued by the Company in the Initial Public Offering and purchased with the
proceeds of the Loan pursuant to Section 7.1 of this Agreement, the holders of
record of such shares upon the effective date of the Liquidation to be deemed to
be Public Stockholders and, accordingly, have Liquidation Rights, subject to
compliance with applicable conditions thereof.
“Obligations” means
and includes all loans, advances, Debts, liabilities and obligations, howsoever
arising, owed by the Borrower to the Holder of every kind and description
(whether or not evidenced by any note or instrument and whether or not for the
payment of money), now existing or hereafter arising under or pursuant to the
terms of the Transaction Documents, including, all interest, fees, charges,
expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable
to and payable by the Borrower hereunder and thereunder, in each case, whether
direct or indirect, absolute or contingent, due or to become due, and whether or
not arising after the commencement of a proceeding under applicable bankruptcy
laws and regulations (including post-petition interest) and whether or not
allowed or allowable as a claim in any such proceeding.
“Person” or “person” means an
individual or a corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
Governmental Authority (or an agency or political subdivision thereof) or other
entity of any kind.
3
“Piggyback
Registration” has the meaning set forth in Section 9.2.
“Prepaid Fee Note” has
the meaning set forth in Section 2.2.
“Proxy Statement” has
the meaning set forth in Section 4.1.
“Public Reports” means
all public filings made by the Company with the SEC.
“Public Stockholders”
means the then holders of the 7,312,500 shares of Common Stock which were
originally issued by the Company in the Initial Public Offering and are
currently publicly traded, on any applicable record date so
designated.
“Purchase Price” has
the meaning set forth in Section 2.1.
“Redemption Rights”
has the meaning set forth in the recitals.
“Registrable
Securities” has the meaning set forth in Section 9.1.
“Requirement(s) of
Law” as to any Person, means any law, statute, treaty, rule, regulation,
right, privilege, qualification, license or franchise or determination of an
arbitrator or a court or other Governmental Authority or stock exchange, in each
case applicable or binding upon such Person or any of its property or to which
such Person or any of its property is subject or pertaining to any or all of the
transactions contemplated or referred to herein.
“SEC” means the
Securities and Exchange Commission.
“Section 9.7 Indemnified
Party” has the meaning set forth in Section 9.7.
“Section 9.7 Indemnifying
Party” has the meaning set forth in Section 9.7.
“Securities” means the
Note, the Warrant, the Warrant Shares, and the Stock Grant.
“Securities Act” means
the Securities Act of 1933, as amended, and the rules promulgated
thereunder.
“Security Agreement”
has the meaning set forth in Section 10.11.
“Stock Pledge
Agreement” has the meaning set forth in Section 10.11.
“Stock Grant” has the
meaning set forth in Section 8.4.
“Stockholders’
Meeting” has the meaning set forth in the recitals.
“Transaction
Document(s)” means this Agreement, the Note, the Escrow Agreement, the
Warrant, the Security Agreement, the Stock Pledge Agreement, and all schedules,
exhibits, annexes and attachments thereto.
4
“Trust Account” means
the trust account at XX Xxxxxx Xxxxx NY Bank maintained by Trustee, in which
$58,030,000 was deposited following the consummation of the Initial Public
Offering.
“Trustee” means
American Stock Transfer and Trust Company in its capacity as trustee of the
Trust Account.
“Underwriters” has the
meaning set forth in Section 10.1.
“Underwriters’ Maximum
Number” has the meaning set forth in Section 9.3.
“Warrant” has the
meaning set forth in Section 8.4.
“Warrant Shares” has
the meaning set forth in Section 8.4.
ARTICLE
II
PURCHASE
AND SALE OF THE NOTE
SECTION
2.1 Purchase and
Sale. Subject to and upon the terms and conditions hereof, the
Lender hereby agrees to purchase from the Borrower the Note in the principal
amount of up to Twelve Million Dollars (US$12,000,000) (the “Purchase Price”), and
the Borrower shall deliver the Note to the Lender on the Closing Date.
SECTION
2.2 Loan Fees. Cyalume
shall pay the Lender a financing fee in the amount of Two Hundred Thousand
Dollars (US$200,000) (the “Financing Fee”) and
the Initial Interest Payment. The Financing Fee is to be paid by
Cyalume on the first to occur of (i) the initial drawdown of the Loan, (ii) the
date of the Stockholders’ Meeting, or (iii) December 29, 2008. On the
Closing Date, Cyalume will deliver to Lender a promissory note (“Prepaid Fee Note”) in the form
of Exhibit H hereto. The Initial Interest Payment shall be paid on
the Closing Date. Borrower hereby unconditionally guarantees payment
of the Financing Fee when due. To the extent that Borrower never
draws down on the Note, or the actual interest accrued on the Note is less than
Twenty Thousand Dollars (US$20,000), then Lender shall return to Borrower the
full Twenty Thousand Dollars (US$20,000), or the difference between Twenty
Thousand Dollars (US$20,000) and the actual amount of interest accrued under the
Note through the Maturity Date. The Company hereby unconditionally
guarantees the payment of interest accrued under the Note.
ARTICLE
III
CLOSING
DELIVERIES
SECTION
3.1 Closing
Deliveries by Borrower. On the Closing Date, the Borrower
shall deliver the following items:
(a) the
Note;
5
(b) a
certificate of its Sole Member, dated the Closing Date, certifying that (a)
attached thereto are true and correct copies of its organizational documents,
which are in full force and effect and have not been amended, supplemented,
revoked or repealed since the date of certification; and (b) attached thereto
are true and correct copies of resolutions duly adopted by its board of
directors or similar governing body and continuing in effect, in form and
substance reasonably satisfactory to the Lender, which authorize the execution,
delivery and performance of this Agreement and the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby;
(c) a
certificate of its Sole Member certifying that each of the representations and
warranties of Article V have been satisfied as of the Closing Date;
and
(d) the
duly executed Escrow Agreement, Stock Pledge Agreement, and Security
Agreement.
SECTION
3.2 Closing
Deliveries by Company. On the Closing Date, the Company shall
deliver the following items:
(a) a
certificate of its Secretary, Assistant Secretary or other authorized officer,
dated the Closing Date, certifying that (a) attached thereto are true and
correct copies of its organizational documents, which are in full force and
effect and have not been amended, supplemented, revoked or repealed since the
date of certification; (b) attached thereto are true and correct copies of
resolutions duly adopted by its board of directors or similar governing body and
continuing in effect, in form and substance reasonably satisfactory to the
Lender, which authorize the execution, delivery and performance of this
Agreement and the Transaction Documents and the consummation of the transactions
contemplated hereby and thereby; and (c) attached thereto is an incumbency
certificate executed by its Secretary, Assistant Secretary or other authorized
officer, dated the Closing Date, certifying the incumbency, signatures and
authority of its officers authorized to execute and deliver this Agreement and
the Transaction Documents on its behalf and perform its obligations hereunder
and thereunder; and
(b) a
legal opinion of Loeb & Loeb LLP, counsel for the Company, dated the Closing
Date, addressed to the Lender, substantially in the form attached hereto as
Exhibit
A.
SECTION
3.3 Closing
Deliveries by Lender. On the Closing Date, the Lender shall
deliver the duly executed Escrow Agreement.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE LENDER
SECTION
4.1 Representations and
Warranties of the Lender. The Lender represents and warrants
to the Borrower that each of the following statements will be true on the date
hereof and the Closing Date:
(a) The
Lender has been duly formed and is validly existing in the state of its
formation with all requisite power and authority to enter into this Agreement,
to carry out the provisions and conditions hereof, and to consummate the
transactions contemplated hereby;
6
(b) The
execution, delivery and performance of this Agreement and the Escrow Agreement
by the Lender has been authorized by all necessary action and this Agreement is
a legal, valid and binding agreement of the Lender enforceable against the
Lender in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity);
(c) The
Lender is acquiring the Securities for the Lender’s own account as principal and
not with a view to, or for, resale, distribution or fractionalization thereof,
in whole, or in part, subject, however, to any Requirement of Law that the
disposition of such Lender’s property shall at all times be within its
control;
(d) The
Lender understands that (i) it must bear the economic risk of an investment in
the Securities for an indefinite period of time because, among other reasons,
the offer and sale of the Securities are intended to be exempt from registration
under the Securities Act by virtue of Section 4(2) of the Securities Act and are
intended to be exempt from registration under any applicable state securities
laws, and (ii) notwithstanding the consent of the Company, the Securities may
not be sold, transferred, hypothecated or pledged, except pursuant to an
effective registration statement under the Securities Act and under any
applicable state securities law, or pursuant to an available exemption from the
registration requirements of the Securities Act and any applicable state
securities laws, in all cases established to the reasonable satisfaction of the
Company, and that the Company is under no obligation to register the Securities,
except as provided in Article IX of this Agreement;
(e) The
Lender (i) has been furnished with, and hereby acknowledges the receipt of, a
copy of the documents which have been provided to the Lender upon the Lender’s
request concerning the Borrower and the Company, (ii) is an “accredited
investor,” as defined in Rule 501 promulgated under the Securities Act (which
definition is set forth on Exhibit B hereto),
(iii) understands the risks of, and other considerations relating to, a purchase
of the Securities and has read the Risk Factors relating to the Company
contained in the Company’s Preliminary Proxy Statement filed with the SEC on
November 14, 2008 (the “Proxy Statement”),
(iv) understands that, to the extent that any information set forth in the
material previously presented to it is inconsistent with the provisions of this
Agreement, the provisions of this Agreement shall prevail and supersede such
prior information, and (v) the Lender has been given the opportunity to obtain
such additional information that it believes is necessary to verify the accuracy
of the information contained in the documents referred to in clause (i)
above;
(f) The
Lender has such knowledge and experience in financial affairs such that it is
capable of evaluating the merits and risks of purchasing the Securities, and the
Lender has not relied in connection with this investment upon any
representations, warranties or agreements other than those set forth in this
Agreement;
(g) With
respect to the tax and other economic considerations related to the Securities,
the Lender has relied only on the advice of the Lender’s own tax, legal,
accounting and financial advisers;
7
(h) The
Lender consents to the placement of a legend on any certificate or other
document evidencing the Note and/or Warrant, as set forth on Exhibits C and D attached hereto,
respectively;
(i) The
Lender represents that the address furnished by the Lender in the Investor
Questionnaire attached hereto as Exhibit E is the
Lender’s principal residence if he is an individual or its principal business
address if it is a corporation or other entity. The Lender certifies
under penalties of perjury that (A) the Lender’s name, taxpayer identification
or social security number and address provided in the Investor Questionnaire are
correct, and (B) the Lender is not a non-resident alien individual, foreign
corporation, foreign partnership, foreign trust or foreign estate (as defined in
the Internal Revenue Code of 1986, as amended);
(j) The
Lender represents that neither the Lender nor any person having direct or
indirect beneficial interests in the Securities to be acquired pursuant to this
Agreement appears on the Specially Designated Nationals and Blocked Persons List
of the Office of Foreign Assets Control of the United States Department of the
Treasury or has been designated a “suspected terrorist” as defined in Executive
Order 13224. The Lender further represents that the Lender does not know or have
any reason to suspect that (A) the monies used to fund the Lender’s investment
in the Securities have been or will be derived from or related to any illegal
activities or (B) the proceeds, if any, from the Lender’s investment in the
Securities will be used to finance any illegal activities. Lender further
understands that the Borrower or the Company may release information about
Lender to proper authorities if the Borrower or the Company determines that it
is in the best interests of the Borrower or the Company in light of relevant
rules and regulations under the laws referenced above;
(k) The
Lender understands and acknowledges that the Securities have not been
recommended by any federal or state securities commission or regulatory
authority, that the foregoing authorities have not confirmed the accuracy or
determined the adequacy of any information concerning the Borrower or the
Company that has been supplied to the Lender and that any representation to the
contrary is a criminal offense; and
(l) The
Lender represents that the Lender was not induced to invest in the Securities by
any form of general solicitation or general advertising including, but not
limited to, the following: (a) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over the news or radio; and (b) any seminar or meeting whose attendees were
invited by any general solicitation or advertising.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES
OF
THE BORROWER
SECTION
5.1 Representations and
Warranties of the Borrower. The Borrower represents and
warrants to the Lender that each of the following statements will be true on the
date hereof and the Closing Date:
8
(a) The
Borrower has been duly formed and is validly existing under the laws of the
state of Delaware, with all requisite power and authority to enter into this
Agreement, to carry out the provisions and conditions hereof, and to consummate
the transactions contemplated hereby; and
(b) The
execution, delivery and performance of this Agreement, the Note and the Escrow
Agreement by the Borrower has been authorized by all necessary action and this
Agreement is a legal, valid and binding agreement of the Borrower enforceable
against the Borrower in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors’ rights and remedies generally and subject, as
to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES
OF
THE COMPANY
SECTION
6.1 Representations and
Warranties of the Company. The Company represents and warrants
to the Lender that each of the following statements will be true on the date
hereof and the Closing Date:
(a) The
Company has been duly formed and is validly existing under the laws of the state
of Delaware, with all requisite power and authority to enter into this
Agreement, to carry out the provisions and conditions hereof, and to consummate
the transactions contemplated hereby;
(b) The
execution, delivery and performance of this Agreement by the Company has been
authorized by all necessary action and this Agreement is a legal, valid and
binding agreement of the Company enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity); and
(c) Each
Public Report was at the time of its filing, in substantial compliance with the
requirements of its respective form as required under the Exchange Act, and none
of the Public Reports, as of their respective filing dates, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company
has timely filed all Public Reports required to have been filed by the Company
by any Governmental Authority.
(d) The
Securities upon issuance:
9
(i) are,
or will be, free and clear of any security interests, liens, claims or other
encumbrances, subject only to restrictions upon transfer under the Securities
Act and any applicable state securities laws;
(ii) have
been, or will be, duly and validly authorized and on the dates of issuance of
the Stock Grant and the Warrant Shares, such Stock Grant and Warrant Shares
(assuming, in the case of the Warrant Shares, payment of the exercise price)
will be duly and validly issued, fully paid and non-assessable and if registered
pursuant to the Securities Act and resold pursuant to an effective registration
statement or exempt from registration will be free trading, unrestricted and
unlegended;
(iii) will
not have been issued or sold in violation of any preemptive or other similar
rights of the holders of any securities of the Company or rights to acquire
securities of the Company;
(iv) will
not subject the holders thereof to personal liability by reason of being such
holders; and
(v) assuming
the representations warranties of the Subscribers as set forth in Article IV
hereof are true and correct, will not result in a violation of Section 5 under
the Securities Act.
(e) Neither
the Company, nor to its knowledge, any person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D under the Securities Act) in connection with the offer
or sale of the Securities.
(f) Since
April 25, 2007, except as disclosed in the Public Reports, no event or
circumstance has occurred or exists with respect to the Company or its
businesses, properties, operations or financial condition, that, under
applicable law, rule or regulation, requires public disclosure or announcement
prior to the date hereof by the Company but which has not been so publicly
announced or disclosed in the Public Reports. Other than the filing
of a Current Report on Form 8-K with respect to certain aspects of the
transactions contemplated by the Transaction Documents, which the Company
undertakes to file prior to 5:30 P.M., New York City time, on the third Business
Day following the Closing Date, the Company is not required to file any report
with the SEC or amend any Public Report as a result of the transactions
described in the Transaction Documents.
ARTICLE
VII
COVENANTS
OF THE BORROWER
SECTION
7.1 Use of
Proceeds. The Borrower shall apply the proceeds from the sale
of the Note exclusively towards the purchase of the Note Shares at a gross
purchase price of no greater than $8.03 per share and for no other
purpose.
10
ARTICLE
VIII
COVENANTS
OF THE COMPANY
SECTION
8.1 Stockholder
Vote. The Company shall hold the Stockholders’ Meeting on or
prior to December 26, 2008, at which meeting the stockholders’ shall be
permitted to vote on the Acquisition.
SECTION
8.2 Liquidation Proxy
Statement. In the event that the Acquisition is not approved
at the Stockholders’ Meeting, the Company hereby covenants that it will not take
any action in furtherance of an alternative Business Combination and shall file
a proxy statement with the SEC in connection with the dissolution of the Company
and the liquidation of the Trust Account, as contemplated in Paragraph (D) of
Article Fifth of the Charter (the “Liquidation”), which
proxy statement shall be filed with the SEC within ten (10) days following the
Stockholders’ Meeting.
SECTION
8.3 Liquidation
Vote. In the event that the Acquisition is not approved at the
Stockholders’ Meeting, the Borrower shall cause the Escrow Agent to vote the
Note Shares in favor of the Liquidation.
SECTION
8.4 Stock
Grant and
Warrants. On the Closing Date, in consideration of providing
the Loan to the Borrower, the Company shall issue the Lender (i) Forty Thousand
(40,000) shares of Common Stock (the “Stock Grant”) and
(ii) a warrant to purchase One Hundred Thousand (100,000) shares of Common
Stock, exercisable at an exercise price of $8.00 per share, the form of which is
attached hereto as Exhibit D (the “Warrant”). Lender
acknowledges that it shall not be deemed to be a Public Stockholder with respect
to the Stock Grant or shares issuable upon exercise of the Warrant (the “Warrant Shares”) and,
accordingly, shall have no Liquidation Rights or Redemption Rights with respect
to the Stock Grant and Warrant Shares and hereby waives any and all rights to
receive a distribution from the Trust Account in relation to owning such
shares.
ARTICLE
IX
REGISTRATION
RIGHTS
SECTION
9.1 Demand
Rights. (i) At any time commencing upon one year from the date
of this Agreement, the Holder may demand registration of up to 1/3 of the
Registrable Securities (defined below); (ii) at any time commencing upon
eighteen months from the date of this Agreement, the Holder may demand
registration of up to an additional 1/3 of the Registrable Securities; and (iii)
at any time commencing upon two years from the date of this Agreement, the
Holder may demand that any remaining Registrable Securities be registered for
trading. The Company shall, after each such demand, use its commercially
reasonable efforts to cause a registration statement to be filed pursuant to
this Section to become effective as soon as reasonably practicable thereafter
and shall use its commercially reasonable efforts to keep such registration
effective until, subject to the terms and provisions of this Agreement, the
earlier of the date when (i) all the Registrable Securities covered by the
registration statement have been sold pursuant thereto or otherwise or (ii) the
Registrable Securities may be publicly sold without volume restrictions under
Rule 144 (or any similar provisions then in force) of the Securities
Act. For the purposes of this Agreement, the term “Registrable
Securities” shall mean the Common Stock issuable upon exercise of the
Warrant and the Common Stock issued pursuant to the Stock Grant that has not
been previously sold by the Lender or included in a then effective registration
statement.
11
SECTION
9.2 Rights
to Piggyback.
(a) If
(and on each occasion that) the Company proposes to register any of its
securities under the Securities Act, either for the Company’s own account or for
the account of any of its stockholders (other than pursuant to a Form S-4 or
Form S-8 or comparable form and other than pursuant to a demand registration
right granted to other persons to the extent that such rights prohibit the
Company from including securities of any other person in such registration
statement) (each such registration not withdrawn or abandoned prior to the
effective date thereof being herein called a “Piggyback
Registration”), the Company will give written notice to the Borrower (the
“Holder”) of
such proposal not later than ten (10) days following the receipt by the Company
of notice of exercise of any registration rights by any persons or twenty (20)
days prior to filing of a registration statement with the SEC, whichever shall
be earlier.
(b) Subject
to the provisions contained in Section 9.3 and in the last sentence of this
paragraph (b), (A) the Company will be obligated and required to include in each
Piggyback Registration (i) for which the Holder is given notice between one year
and eighteen months after the date of this Agreement, up to 1/3 of the
Registrable Securities, (ii) for which the Holder is given notice between
eighteen months and two years after the date of this Agreement, up to and
additional 1/3 of the Registrable Securities, and (iii) for which the Holder is
given notice two years or more after the date of this Agreement, any remaining
Registrable Securities, with respect to which, in each case, the Company shall
have received, within fifteen (15) days after the date on which the Company
shall have given written notice of such Piggyback Registration to the Holder,
the written requests of the Holder for inclusion in such Piggyback Registration,
and (B) the Company will use commercially reasonable efforts in good faith to
effect promptly the registration of all such Registrable
Securities. The Holder shall be permitted to withdraw all or any part
of the Registrable Securities of the Holder from any Piggyback Registration at
any time prior to the effective date of such Piggyback Registration unless the
Holder shall have entered into a written agreement with the Company’s
underwriters establishing the terms and conditions under which the Holder would
be obligated to sell such Registrable Securities in such Piggyback
Registration. The Company will not be obligated or required to
include any shares in any registration effected solely to implement an employee
benefit plan or a transaction to which Rule 145 of the SEC is
applicable.
12
SECTION
9.3 Priority on Piggyback
Registrations. If a Piggyback Registration is an underwritten
registration, and the managing underwriters shall give written advice to the
Company of a number of securities to which such registration should, in the
opinion of the managing underwriters of such registration in the light of
marketing factors, be limited (the “Underwriters’ Maximum
Number”), then: if such Piggyback Registration is initiated by the
Company: (i) the Company shall be entitled to include in such
registration that number of securities which the Company proposes to offer and
sell for its own account in such registration which does not exceed the
Underwriters’ Maximum Number; (ii) if the Underwriters' Maximum Number exceeds
the number of securities to be sold pursuant to clause (i) above, then the
Company will be obligated and required to include in such registration that
number of Registrable Securities requested by the Holder thereof to be included
in such registration and which does not exceed such excess and such securities
to be registered shall be allocated pro rata among the Holder and any other
person to whom the Company has granted piggyback registration
rights. If such Piggyback Registration is initiated by persons
exercising demand registration rights, (i) persons exercising demand
registration rights shall be entitled to include in such registration that
number of securities which such persons propose to offer and sell that do not
exceed the Underwriters’ Maximum Number; (ii) if the Underwriters' Maximum
Number exceeds the number of securities to be sold pursuant to clause (i) above,
then the Company will be obligated and required to include in such registration
that number of Registrable Securities requested by the Holder thereof to be
included in such registration and which do not exceed such excess and such
securities to be registered shall be allocated pro rata among the Holder and any
other person to whom the Company has granted piggyback registration
rights.
SECTION
9.4 Selection of
Underwriters. In any Piggyback Registration, the Company shall
have the sole right to select the investment bankers and managing underwriters
in such registration.
SECTION
9.5 Right
to Terminate Registration. The Company shall have the right to
terminate or withdraw any Piggyback registration initiated by it under Section
9.2 prior to the effectiveness of such registration whether or not the Holder
has elected to include shares in such registration.
SECTION
9.6 Procedures on
Registration. If and whenever the Company is required by the
provisions hereof to effect the registration of any Registrable Securities under
the Securities Act, the Company will, as expeditiously as possible:
(a) respond
as promptly as commercially reasonable to any comments received from the SEC,
and use its commercially reasonable efforts to cause such registration to become
effective, and promptly provide to the Stockholder Representative copies of all
filings and SEC letters of comment relating thereto provided that such letters
do not contain material non-public information, in which case such letters may
be redacted by the Company;
(b) furnish
to the Holder such number of copies of the registration statement and the
prospectus included therein as the Holder reasonably may request to facilitate
the public sale or disposition of the Registrable Securities covered by such
registration statement;
(c) use
its commercially reasonable efforts to register or qualify the Holder’s
Registrable Securities covered by such registration under the securities or
“blue sky” laws of such jurisdictions within the United States as the Holder may
reasonably request, provided, however, that the Company shall not for any such
purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent to
general service of process in any such jurisdiction;
(d) list
the Registrable Securities covered by such registration with any securities
exchange on which the Common Stock of the Company is then
listed;
13
(e) immediately
notify the Holder at any time when a prospectus relating thereto is required to
be delivered under the Securities Act, of the happening of any event of which
the Company has knowledge as a result of which the prospectus contained in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing; and
(f) notify
the Holder of the effectiveness of each registration statement
filed.
SECTION
9.7 Indemnification.
(a) In
the event of a registration of any securities under the Securities Act pursuant
to this Agreement, the Company will indemnify and hold harmless the Holder, and
its partners and each other person, if any, who controls the Holder within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which the Holder, or such persons may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Securities were
registered under the Securities Act pursuant to this Agreement, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Holder, and each
such person for any reasonable legal or other expenses incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case if and to the extent that any such loss, claim, damage or
liability arises out of or is based upon (i) an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity with
information furnished by or on behalf of the Holder or (ii) the use by the
Holder of an outdated or defective prospectus (without any Company provided
supplement correcting such outdated or defective prospectus) after the Company
has notified the Holder or any person in writing that such prospectus is
suspended from use, outdated or defective.
(b) In
the event of a registration of any securities under the Securities Act pursuant
to this Agreement, the Holder will indemnify and hold harmless the Company, its
subsidiaries and their respective officers, directors and each other person, if
any, who controls the Company or any such subsidiary within the meaning of the
Securities Act, against all losses, claims, damages or liabilities, joint or
several, to which the Company, any such subsidiary or such persons may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact which
was furnished in writing by the Holder to the Company (and such information is
contained in) the registration statement under which such Securities were
registered under the Securities Act pursuant to this Agreement, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Company, its
subsidiaries and each such person for any reasonable legal or other expenses
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action, provided, however, that the Holder will be
liable in any such case if and only to the extent that any such loss, claim,
damage or liability (i) arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in conformity with
information furnished to the Company or its subsidiary by or on behalf of the
Holder or (ii) arises from the failure to provide a Company provided supplement
correcting an outdated or defective prospectus after the Company has notified
the Holder in writing that such prospectus is suspended from use, outdated or
defective, provided further, that in no case shall the Holder be liable or
responsible for any amount in excess of the net amount received by the Holder
for shares sold by him, her or it pursuant to such registration
statement.
14
(c) Promptly
after receipt by a party entitled to claim indemnification hereunder (a “Section 9.7 Indemnified
Party”) of notice of the commencement of any action, such Section 9.7
Indemnified Party shall, if a claim for indemnification in respect thereof is to
be made against a party hereto obligated to indemnify such Indemnified Party (a
“Section 9.7
Indemnifying Party”), notify the Section 9.7 Indemnifying Party in
writing thereof, but the omission to so notify the Section 9.7 Indemnifying
Party shall not relieve it from any liability which it may have to such Section
9.7 Indemnified Party other than under this Section 9.7 and shall only relieve
it from any liability which it may have to such Section 9.7 Indemnified Party
under this Section 9.7 if and to the extent the Section 9.7 Indemnifying Party
is prejudiced by such omission. In case any such action shall be brought against
any Section 9.7 Indemnified Party and it shall notify the Section 9.7
Indemnifying Party of the commencement thereof, the Section 9.7 Indemnifying
Party shall be entitled to participate in and, to the extent it shall wish, to
assume and undertake the defense thereof with counsel satisfactory to such
Section 9.7 Indemnified Party, and, after notice from the Section 9.7
Indemnifying Party to such Section 9.7 Indemnified Party of its election so to
assume and undertake the defense thereof, the Section 9.7 Indemnifying Party
shall not be liable to such Section 9.7 Indemnified Party under this Section 9.7
for any legal expenses subsequently incurred by such Section 9.7 Indemnified
Party in connection with the defense thereof; if the Section 9.7 Indemnified
Party retains its own counsel, then the Section 9.7 Indemnified Party shall pay
all fees, costs and expenses of such counsel, provided, however, that, if the
defendants in any such action include both the Section 9.7 Indemnified Party and
the Section 9.7 Indemnifying Party, and the Section 9.7 Indemnified Party shall
have reasonably concluded that there may be reasonable defenses available to it
which are different from or additional to those available to the Section 9.7
Indemnifying Party, or if the interests of the Section 9.7 Indemnified Party
reasonably may be deemed to conflict with the interests of the Section 9.7
Indemnifying Party, the Section 9.7 Indemnified Party shall have the right to
select separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the reasonable expenses and fees
of such separate counsel and other expenses related to such participation to be
reimbursed by the Section 9.7 Indemnifying Party as incurred.
15
(d) In
order to provide for just and equitable contribution in the event of joint
liability under the Securities Act in any case in which either (i) the Holder,
or any partner or controlling person of the Holder, makes a claim for
indemnification pursuant to this Section 9.7 but it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction and
the expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 9.7 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of the Holder
or such partner or controlling person of the Holder in circumstances for which
indemnification is provided under this Article IX; then, and in each such case,
the Company and the Holder will contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (after contribution from
others) in such proportion so that the Holder is responsible only for the
portion represented by the percentage that the public offering price of its
securities offered by the registration statement bears to the public offering
price of all securities offered by such registration statement, provided,
however, that, in any such case, (A) the Holder will not be required to
contribute any amount in excess of the public offering price of all such
securities offered by it pursuant to such registration statement; and (B) no
person or entity guilty of fraudulent misrepresentation (within the meaning of
federal securities laws) will be entitled to contribution from any person or
entity who was not guilty of such fraudulent misrepresentation.
SECTION
9.8 Registration
Expenses. All fees and expenses incident to the performance of
this Article IX by the Company shall be borne by the Company. Notwithstanding
the foregoing, the Company shall not be responsible for any broker, underwriter
or any similar commissions, or legal fees or other costs incurred directly by
the Holder(s).
ARTICLE
X
MISCELLANEOUS
PROVISIONS
SECTION
10.1 Waiver
of suit against the Trust Account. Reference is hereby made to the IPO
Registration Statement. The Lender has read the IPO Registration
Statement and understands that the Company has established the Trust Account
initially in an amount of $58,030,000 for the benefit of the Public Stockholders
and the underwriters of the Company’s initial public offering (the “Underwriters”) and
that, except for up to a maximum of $1,500,000 of the interest earned on the
amounts held in the Trust Account, the Company may disburse monies from the
Trust Account only: (i) to its Public Stockholders in the event of the
redemption of their shares or the Liquidation of the Company; or (ii) to the
Company and the Underwriters after consummation of a Business
Combination.
Lender
acknowledges that except for any rights Lender may directly, indirectly or
beneficially have as a Public Stockholder, the Public Stockholders have priority
over Lender as to the distribution of funds from the Trust Account in the event
of a Liquidation or in connection with redemption of shares issued in the
Initial Public Offering and waives any right to seek recourse against the Trust
Account for any claims arising under or in connection with the Transaction
Documents, except for any claim available to a Public Stockholder.
Notwithstanding
the foregoing, in the event that the Acquisition is consummated, then the
Lender’s waiver contained in the immediately preceding paragraph shall not
apply, but only after the stockholders exercising their respective Redemption
Rights have received full payment in connection therewith.
16
SECTION
10.2 Fees
and Expenses. Upon the execution of this Agreement, the
Company shall pay to or on behalf of Lender the sum of Fifty Thousand Dollars
(US$50,000) in connection with the preparation, execution and delivery of this
Agreement, the other Transaction Documents, net of Ten Thousand Dollars
(US$10,000) that was paid upon the execution of the term sheet, dated November
5, 2008, by and between the Lender and the Company.
SECTION
10.3 Survival of Representations
and Warranties. All representations and warranties and
agreements contained herein or made in writing by the Borrower, the Company or
the Lender in connection with the transactions contemplated by this Agreement
shall survive the sale of the Note and the issue of the Securities,
notwithstanding any inquiry or investigation at any time made by or on behalf of
the Borrower, the Company or the Lender.
SECTION
10.4 Notices. Any
notice or other communication under this Agreement shall be in writing and shall
be considered given when (i) when received, (ii) when delivered personally,
(iii) one (1) Business Day after being delivered by facsimile (with receipt of
appropriate confirmation), (iv) one (1) Business Day after being deposited with
an overnight courier service of recognized standing, or (v) four (4) days after
being deposited in the registered mail, with postage prepaid:
If to the
Company:
00
Xxxxxxxxxx Xxxx
Xxxxxxxxxx
Xxxx, XX 00000
Attention: Xx.
Xxxxx Xxxxx
Facsimile:
(000) 000-0000
If to the
Borrower:
Vector
Investment Fund LLC
00 Xxxxx
Xxxxxx
Xxxxxxxxx,
XX 00000
Attention: Xx.
Xxxxx Xxxxx
Facsimile: (000)
000-0000
If to the
Lender:
Centurion
Credit Group Master Fund L.P.
000 Xxxx
00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx,
XX 00000
Attention:
Mr. Xxxxx Xxxx
Facsimile: (000)
000-0000
With an
additional copy by fax only to:
Grushko
& Xxxxxxx, P.C.
000 Xxxxx
Xxxxxx, Xxxxx 0000
Xxx Xxxx,
XX 00000
Attention: Xxxxxx
X. Xxxxxxx, Esq.
Facsimile: (000)
000-0000
17
SECTION
10.5 Assignments, Successors, and
No Third-Party Rights. No party may assign any of its rights
under this Agreement without the prior consent of the other
parties. Subject to the preceding sentence, this Agreement will apply
to, be binding in all respects upon, and inure to the benefit of and be
enforceable by the respective successors and permitted assigns of the
parties. This Agreement and all of its provisions and conditions are
for the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
SECTION
10.6 Entire
Agreement and Modification. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended
except by a written agreement executed by the party against whom the enforcement
of such amendment is sought.
SECTION
10.7 Severability. If
any provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid
or unenforceable only in part or degree will remain in full force and effect to
the extent not held invalid or unenforceable
SECTION
10.8 Applicable
Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and interpreted, construed and enforced
in accordance with the laws of the State of New York without giving effect to
the conflicts of laws provisions thereof.
SECTION
10.9 Law Governing this
Agreement. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principles of conflicts of laws. Any action brought by either party against the
other concerning the transactions contemplated by this Agreement shall be
brought only in the state courts of New York or in the federal courts located in
the state and county of New York. The parties to this Agreement
hereby irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non
conveniens. The parties executing this Agreement
and other agreements referred to herein or delivered in connection herewith on
behalf of the Company agree to submit to the in personam jurisdiction of such
courts and hereby irrevocably waive trial by jury. The
prevailing party shall be entitled to recover from the other party its
reasonable attorney's fees and costs. In the event that any provision
of this Agreement or any other agreement delivered in connection herewith is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other
provision of any agreement. Each party hereby irrevocably waives
personal service of process and consents to process being served in any suit,
action or proceeding in connection with this Agreement or any other Transaction
Document by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) 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
contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.
18
SECTION
10.10 Specific Enforcement,
Consent to Jurisdiction. Each party hereto acknowledges
and agrees 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 seek 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. Subject to Section 10.9 hereof, each of the Company and
Borrower hereby irrevocably waives, and agrees not to assert in any such suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction in New York 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. Nothing in this Section shall affect or limit
any right to serve process in any other manner permitted by law.
SECTION
10.11 Security
Interest. The Lender is granted a security interest in
the Note Shares and the proceeds of the Note Shares for all of the Obligations
as defined in the Note. The form of Stock Pledge Agreement to be
delivered to Lender on the Closing Date is annexed hereto as Exhibit
F. The Lender may cause one or more UCC-1 Financing Statement
to be filed in connection with such security interest. In any event,
possession of the Note Shares by the Escrow Agent shall be deemed to be
possession on behalf of and by the Lender for purposes of perfecting the
security interest. Borrower will deliver the form of Security
Agreement annexed hereto as Exhibit G to the
Lender on the Closing Date granting to Lender a security interest in the
membership interest of the sole member of Borrower.
SECTION
10.12 Counterparts. This
Agreement may be executed in one or more counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
agreement. Facsimile copies or other electronic transmissions of
signed signature pages will be deemed binding originals.
19
IN
WITNESS WHEREOF, the undersigned has executed this Note Purchase Agreement
effective as of the 10th day of December, 2008.
|
Borrower:
|
||
|
VECTOR
INVESTMENT FUND LLC
|
||
|
By:
|
||
|
Name: Xxxxx
Xxxxx
|
||
|
Title: Sole
Member
|
||
|
Lender:
|
||
|
CENTURION
CREDIT GROUP
MASTER
FUND L.P.
|
||
|
By:
|
||
|
Name: Xxxxx
Xxxx
|
||
|
Title:
|
||
|
U.S.
Tax ID Number or Social Security Account
Number
(as applicable):
|
||
|
(if
none, so state)
|
||
|
Company:
|
||
|
VECTOR
INTERSECT SECURITY
ACQUISITION
CORP.
|
||
|
By:
|
||
|
Name: Xxxxx
Xxxxx
|
||
|
Title: Chief
Executive
Officer
|
||
