NOVUME SOLUTIONS, INC. REGISTRATION RIGHTS AGREEMENT
Exhibit
4.1
THIS
REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
[●]
(the “Agreement
Date”), by and among Novume Solutions, Inc., a company
organized and existing under the General Corporation Law of the
State of Delaware (the "Company"), and the individuals
identified as "Holders" in Schedule 1 attached hereto
(collectively, the "Shareholders").
WHEREAS, the Company entered into that
certain Agreement and Plan of Merger as of the Agreement Date (the
“Merger
Agreement”) by and among the Company, Global Technical
Services Inc., a Delaware corporation and wholly owned subsidiary
of the Company, Global Contract Professionals Inc., a Delaware
corporation and wholly owned subsidiary of the Company, Global
Technical Services Inc., a Texas corporation, Global Contract
Professionals Inc., a Texas corporation, and Xxxx Xxxxxxxx, in his
personal capacity, and in his capacity as the representative of
each Holder pursuant to which the Holders received their shares of
capital stock of the Company; and
WHEREAS, the Shareholders and the
Company desire to set forth certain matters regarding the ownership
of the Registrable Securities by the Holders.
NOW, THEREFORE, in consideration of the
mutual promises and covenants set forth herein, the parties hereby
agree as follows:
1.1 Definitions.
As used herein, the following terms have the following
meanings:
1.1.1. "Holder"
means any holder of outstanding Registrable Securities (as defined
below) or shares convertible into Registrable Securities, who
acquired such Registrable Securities or shares convertible into
Registrable Securities in a transaction or series or transactions
not involving any registered public offering.
1.1.2. "IPO"
means the closing of the Company’s initial firmly
underwritten public offering of its Ordinary Shares pursuant to an
effective registration statement under the Securities Act, or
equivalent law of another jurisdiction.
1.1.3. "Ordinary
Registrable Securities" means all Ordinary Shares of the
Company held by the Shareholders and all Ordinary Shares issued by
the Company in respect of such shares; provided, however, that any Ordinary Shares which
previously have been registered by or on behalf of the applicable
Shareholder, shall not be deemed to be Registrable
Securities.
1.1.4. “Ordinary
Shares” means the Company’s common stock, par
value $0.0001 per share.
1.1.5. "Preferred
Registrable Securities" means all Ordinary Shares issuable
upon conversion of Preferred Shares and all Ordinary Shares issued
by the Company in respect of such shares; provided, however, that (any Ordinary Shares
which previously have been registered by or on behalf of the
applicable Shareholder, shall not be deemed to be Registrable
Securities.
1.1.6. “Preferred
Shares” means the Company’s Series B Preferred
Stock, par value $0.0001 per share.
1.1.7. "Register",
"registered" and
"registration"
refer to a registration effected by filing a registration statement
in compliance with the Securities Act and the declaration or
ordering by the SEC of effectiveness of such registration
statement, or the equivalent actions under the laws of another
jurisdiction.
1.1.8. "Registrable
Securities" means the Preferred Registrable Securities and
the Ordinary Registrable Securities.
1.1.9. "SEC"
means the Securities and Exchange Commission.
1.1.10. "Securities
Act" means the Securities Act of 1933, as
amended.
1.2 Incidental
Registration. If at any time after the Company’s IPO
the Company proposes to register any of its securities for its own
account or on behalf of any of its other shareholders (other than
in connection with a registration relating solely to the sale of
shares to employees), it shall give notice to the Holders of such
intention. Upon the written request of any Holder given within 20
days after receipt of any such notice, the Company shall use its
commercially reasonable efforts, subject to the provisions of this
Section 1.2, to
include in such registration all of the Registrable Securities
indicated in such request, so as to permit the disposition of the
shares so registered. If the managing underwriter advises the
Company in writing that marketing factors require a limitation of
the number of shares to be underwritten, then the number of shares
of securities that are entitled to be included in the registration
shall be allocated in the following order of priority: first, the Company shall be entitled to
register all of the securities the Company wishes to register for
its own account, subject to the provisions of this Section 1.2 and Section 1.3 below; and
second, if remaining, the
Shareholders shall be entitled to register such number of
Registrable Securities requested to be registered by them (pro rata
to the respective number of Registrable Securities requested by
each Shareholder to be included in the registration).
For the
avoidance of doubt, to the extent that the managing underwriter
advises the Company in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the
number of shares of securities that each Shareholder may include in
a registration may be reduced on a pro rata basis in accordance
with the total amount of securities requested to be included in
such registration (including, without limitation, securities
requested to be included in such registration by other persons
pursuant to any other agreement or arrangement between such person
and the Company). Notwithstanding anything herein to the contrary,
the Company may enter into any such agreement or arrangement with
any person that provides such person with the right to include in
any registration such person’s registrable securities in
accordance with the terms set forth therein; provided, however, that to the extent
that the number of shares of securities in such registration that
are available for such registration is below the aggregate number
of securities required to be included in such registration pursuant
to all arrangements binding upon the Company, then the number of
shares of securities that each person (including the Shareholders)
may include in such registration may be reduced on a pro rata basis
in accordance with the total amount of securities requested to be
included in such registration.
1.3 Expenses.
All customary expenses, including the reasonable fees and expenses
of one counsel for the Holders incurred in connection with any
registration under Section
1.2, shall be borne by the Company; provided, however, that each of the Holders
participating in such registration shall pay its pro rata portion
of discounts or commissions payable to any
underwriter.
1.4 Indemnities.
In the event of any registered offering of Registrable Securities
pursuant to this Section 1:
1.4.1. The
Company will indemnify and hold harmless, to the fullest extent
permitted by law, any Holder whose Registrable Securities are
included in the registration and each person, if any, who controls
the Holder, from and against any and all losses, damages, claims,
liabilities, joint or several, and reasonable costs and expenses
(including any amounts paid in any settlement effected with the
Company's consent) to which the Holder or controlling person may
become subject under applicable law or otherwise, insofar as such
losses, damages, claims, liabilities (or actions or proceedings in
respect thereof), costs or expenses arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any
material fact contained in the registration statement or included
in the prospectus, as amended or supplemented, or (ii) the omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances in which they were made, not misleading,
and the Company will reimburse the Holder and each such controlling
person of the Holder, promptly upon written demand, for any
reasonable legal or any other expenses incurred by them in
connection with investigating, preparing to defend or defending
against or appearing as a third-party witness in connection with
such loss, claim, damage, liability, action or proceeding;
provided, however, that the Company will not be
liable to any Holder or controlling person in any such case to the
extent that any such loss, damage, liability, cost or expense
arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in
conformity with information furnished by such Holder or such
controlling persons claiming for indemnification in writing
specifically for inclusion therein; provided, further, that the indemnity agreement
contained in this Section 1.4.1 shall not
apply to amounts paid in settlement of any such claim, loss,
damage, liability or action if such settlement is effected without
the written consent of the Company, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of
the selling Holder or any controlling person of the selling Holder,
and regardless of any sale in connection with such offering by the
selling Holder. Such indemnity shall survive the transfer of
securities by a selling Holder.
1.4.2. As
a condition precedent to the Company's obligations under this
Section
1, each Holder
participating in a registration hereunder will furnish to the
Company in writing any information regarding such Holder, the
Registrable Securities held by it, and his or her intended method
of distribution of Registrable Securities as the Company may
reasonably request and will indemnify and hold harmless the Company
(and each of its directors and officers), any underwriter for the
Company, any other person participating in the distribution and
each person, if any, who controls the Company, such underwriter, or
such other person from and against any and all losses, damages,
claims, liabilities, costs or expenses (including any amounts paid
in any settlement effected with the selling Holder's consent) to
which the Company (and each of its directors and officers) or any
such controlling person and/or any such underwriter may become
subject under applicable law or otherwise, insofar as such losses,
damages, claims, liabilities (or actions or proceedings in respect
thereof), costs or expenses arise out of or are based on
(i) any untrue or alleged untrue statement of any material
fact contained in the registration statement or included in the
prospectus, as amended or supplemented, or (ii) the omission
or the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not
misleading, and each such Holder will reimburse the Company (and
each of its directors and officers), any underwriter, any other
person participating in the distribution and each such controlling
person of the Company, any underwriter or other person, promptly
upon demand, for any reasonable legal or other expenses incurred by
them in connection with investigating, preparing to defend or
defending against or appearing as a third-party witness in
connection with such loss, claim, damage, liability, action or
proceeding; in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission
or alleged omission was so made in conformity with written
information furnished by such Holder specifically for inclusion
therein. The foregoing indemnity shall be individual and several
(and not joint or joint and several) by each Holder. The foregoing
indemnity is also subject to the condition that, insofar as it
relates to any such untrue statement (or alleged untrue statement)
or omission (or alleged omission) made in the preliminary
prospectus but eliminated or remedied in the amended prospectus at
the time the registration statement becomes effective or in the
final prospectus, such indemnity agreement shall not inure to the
benefit of (i) the Company, (ii) any underwriter and any
person, if any, controlling the Company or the underwriter, if a
copy of the final prospectus was not furnished to the person or
entity asserting the loss, liability, claim or damage at or prior
to the time such furnishing is required by the Securities Act;
provided, further, that this indemnity shall not
be deemed to relieve any underwriter of any of its due diligence
obligations; provided,
further, that the indemnity
agreement contained in this Section 1.4.2 shall not
apply to amounts paid in settlement of any such claim, loss,
damage, liability or action if such settlement is effected without
the consent of the Holders, as the case may be, which consent shall
not be unreasonably withheld. In no event shall the liability of a
Holder exceed the net proceeds from the offering received by such
Holder.
1.4.3. Promptly
after receipt by an indemnified party pursuant to the provisions of
Sections 1.4.1 or
1.4.2 of notice of
the commencement of any action involving the subject matter of the
foregoing indemnity provisions, such indemnified party will, if a
claim thereof is to be made against the indemnifying party pursuant
to the provisions of Sections 1.4.1 or 1.4.2, promptly notify the
indemnifying party of the commencement thereof; however, the
omission to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party hereunder,
unless such omission is materially prejudicial to the indemnifying
party's ability to defend such action. In case such action is
brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent
that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, that if the defendants in any
action include both the indemnified party and the indemnifying
party and the indemnified party reasonably believes that there is a
conflict of interests which would prevent counsel for the
indemnifying party from also representing the indemnified party,
the indemnified party or parties shall have the right to select one
separate counsel to participate in the defense of such action on
behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be
liable to such indemnified party pursuant to the provisions of said
Sections 1.4.1 or
1.4.2 for any legal
or other expense subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified
party shall have employed counsel in accordance with the provision
of the preceding sentence, (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time
after the notice of the commencement of the action and within 15
days after written notice of the indemnified party's intention to
employ separate counsel pursuant to the previous sentence, or (iii)
the indemnifying party has authorized the employment of counsel for
the indemnified party at the expense of the indemnifying party. No
indemnifying party will consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect to such claim or
litigation.
1.4.4. If
recovery is not available under the foregoing indemnification
provisions, for any reason other than as specified therein, the
parties entitled to indemnification by the terms thereof shall be
entitled to contribution to liabilities and expenses as more fully
set forth in an underwriting agreement to be executed in connection
with such registration. In determining the amount of contribution
to which the respective parties are entitled, there shall be
considered the parties' relative knowledge and access to
information concerning the matter with respect to which the claim
was asserted, the opportunity to correct and prevent any statement
or omission, and any other equitable considerations appropriate
under the circumstances. In no event shall the liability of a
Holder exceed the net proceeds from the offering received by such
Holder.
1.4.5. Notwithstanding
the foregoing, to the extent that the provisions on indemnification
and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in
conflict with the foregoing provisions, the provisions in the
underwriting agreement shall prevail.
1.5 Delay
of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any
registration pursuant to this Agreement as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 1.
1.6 Assignment
of Registration Rights. Any of the Holders may assign its
rights to cause the Company to register Registrable Securities
pursuant to this Section 1 to (i) any partner or retired
partner of any Holder which is a partnership or (ii) any family
member or trust for the benefit of any individual Holder, The
transferor shall, within 20 days after such transfer, furnish the
Company with written notice of the name and address of such
transferee and the securities with respect to which such
registration rights are being assigned, and the transferee's
written consent to be bound by this Agreement. No other assignment
of registration rights shall be permitted herein.
1.7 Lock-Up. In
any registration of the Company's shares all Holders agree that any
sales of Registrable Securities may be subject to a "lock-up"
period restricting such sales for up to 180 days, and all Holders
will agree to abide by such customary "lock-up" period of up to 180
days as is required by the underwriter in such registration,
provided that such obligation shall only apply where the officers,
directors of the Company and other shareholders who hold at least
one 1% of the issued and outstanding capital are similarly bound.
In order to enforce the foregoing covenants, the Company may impose
stop-transfer instructions with respect to the securities of each
Holder. Each Holder agrees that prior to an IPO it will not
transfer securities of the Company unless each transferee agrees in
writing to be bound by all of the provisions of this Section 1.7, provided that this
Section 1.7 shall
not apply to transfers pursuant to a registration statement.
Notwithstanding the foregoing, the provision of this Section 1.7
shall not apply to G & W Ventures, Inc.
1.8 Public
Information. For as long as the Company is obligated to file
periodic reports with the SEC under the Securities Exchange Act of
1934, as amended, the Company shall (i) undertake to make publicly
available and available to the Shareholders pursuant to Rule 144,
such information as is reasonably necessary to enable the
Shareholders to make sales of Registrable Securities pursuant to
that Rule and (ii) comply with the current public information
requirements of Rule 144 and shall furnish thereafter to any
Shareholder, upon request, a written statement executed by the
Company as to the steps it has taken to so comply.
1.9 Termination of
Registration Rights. The registration rights contained in
this Agreement will terminate with respect to securities held by
the holders of Registrable Securities, upon the third anniversary
of the Agreement Date.
2. Miscellaneous.
2.1 Further
Assurances. Each of the parties hereto shall perform such
further acts and execute such further documents as may reasonably
be necessary to carry out and give full effect to the provisions of
this Agreement and the intentions of the parties as reflected
thereby.
2.2 Governing
Law. The internal laws of the State of Delaware,
irrespective of its conflicts of law principles, shall govern the
validity of this Agreement, the construction of its terms, the
interpretation and enforcement of the rights and duties of the
parties hereto.
2.3 Successors and
Assigns; Assignment. Except as otherwise expressly limited
herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors, and
administrators of the parties hereto. Subject to Section 1.7, none of the
rights, privileges, or obligations set forth in, arising under, or
created by this Agreement may be assigned or transferred without
the prior consent in writing of each party to this
Agreement.
2.4 Entire Agreement;
Amendment and Waiver. This Agreement and the Schedule hereto
constitute the full and entire understanding and agreement between
the parties with regard to the subject matters hereof and thereof.
Any term of this Agreement may be amended and the observance of any
term hereof may be waived (either prospectively or retroactively
and either generally or in a particular instance) (collectively, a
"Change") with the written
consent of the Company and Holders holding at least a majority of
the Registrable Securities. Any Change effected in accordance with
this paragraph shall be binding upon all the parties hereto,
including without limitation, each Holder, each future Holder of
Registrable Securities, and the Company.
2.5 Notices,
etc. All
notices and other communications required or permitted hereunder to
be given to a party to this Agreement shall be in writing and shall
be telecopied or mailed by registered, electronic or certified
mail, postage prepaid, or otherwise delivered by hand or by
messenger, addressed to such party's address as set forth below or
at such other address as the party shall have furnished to each
other party in writing in accordance with this
provision:
if to the Shareholders:
to the
Shareholders’ Agent
if to the Company:
00000
Xxxxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX
00000
Attention : Xxxxxx
Xxxxxx
with a copy, not constituting formal notice,
to:
Xxxxxxx
& Xxxxxx LLP
0000
Xxxxxxxxxxxx Xxxxxx, XX,
Xxxxxxxxxx, XX
00000
Attention: Xxxxxx
X. XxXxx Xx., Esq.
Fax
No.: (000) 000-0000
or such
other address with respect to a party as such party shall notify
each other party in writing as above provided. Any notice sent in
accordance with this Section 2.5 shall be effective
(i) if mailed, 7 business days after mailing, (ii) if sent by
messenger, upon delivery, and (iii) if sent via email or facsimile,
upon transmission and electronic confirmation of receipt or, if
transmitted and received on a non-business day, on the first
business day following transmission and electronic confirmation of
receipt (provided, however, that any notice of change of address
shall only be valid upon receipt).
2.6 Delays or
Omissions. No delay or omission to exercise any right,
power, or remedy accruing to any party upon any breach or default
under this Agreement, shall be deemed a waiver of any other breach
or default theretofore or thereafter occurring. Any waiver, permit,
consent, or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver
on the part of any party of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the
extent specifically set forth in such writing. All remedies, either
under this Agreement or by law or otherwise afforded to any of the
parties, shall be cumulative and not alternative.
2.7 Severability.
If any provision of this Agreement is held by a court of competent
jurisdiction to be unenforceable under applicable law, then such
provision shall be excluded from this Agreement and the remainder
of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms;
provided, however, that in such event this Agreement shall be
interpreted so as to give effect, to the greatest extent consistent
with and permitted by applicable law, to the meaning and intention
of the excluded provision as determined by such court of competent
jurisdiction.
2.8 Counterparts.
This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and enforceable against the
parties actually executing such counterpart, and all of which
together shall constitute one and the same instrument. Signatures
by facsimile or signatures which have been scanned and transmitted
by electronic mail shall be deemed valid and binding for all
purposes.
2.9 Titles and
Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
2.10 Confidentiality.
Neither Company nor any Holder shall make any public announcement
of any kind regarding the terms of this Agreement and the
transactions contemplated hereby. Following the date hereof,
Company may issue such press releases, and make such other public
disclosures, as it determines are required or deems
appropriate.
2.11 Waiver
of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
HEREOF.
2.12 The
Shareholders’ Agent. The Shareholders, by virtue of
their approval of this Agreement, shall be deemed to have
irrevocably constituted and appointed Xxxx Xxxxxxxx as their agent
(the “Shareholders’
Agent”) (together with his or her or its permitted
successors) as their true and lawful agent and attorney-in-fact to
give (as explicitly directed by each of the other Shareholders) and
receive notices on their behalf, and the Shareholders’ Agent
agrees to act as, and to undertake the duties and responsibilities
of, such agent and attorney-in-fact. This power of attorney and the
powers, immunities and rights to indemnification granted to the
Shareholders’ Agent hereunder: (i) are coupled with an
interest and shall be irrevocable and survive the death,
incompetence, bankruptcy or liquidation of any Shareholder and
shall be binding on any successor thereto, and (ii) shall survive
the delivery of an assignment by any Shareholder of the whole or
any fraction of his, her or its interest in the
Agreement.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF the parties have
signed this Registration Rights Agreement as of the date first
hereinabove set forth.
Company:
By:
________________________
Name:
Title:
IN WITNESS WHEREOF the parties have
signed this Registration Rights Agreement as of the date first
hereinabove set forth.
G&W VENTURES, INC.
By:____________________________________
Xxx
Xxxx, President
_______________________________________
XXXX XXXXXXXX
