Exhibit#_________
HADRON, INC.
REGISTRATION RIGHTS AGREEMENT
March 30, 2000
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT dated March 30, 2000, by and among
Hadron, Inc., a New York corporation (the "Company"), Xxx X.
Xxxxx ("Xxxxx"), Xxxxxxxx X. Xxxxx ("Xxx. Xxxxx"), Xxxxx
Dynastic Trust ("Xxxxx Trust") and J. Xxxxxxx Xxxx ("Xxxx")
(Xxxxx, Xxx. Xxxxx, Xxxxx Trust and Xxxx being each, an
"Investor" and collectively, the "Investors") and the
persons designated as Other Holders on the signature pages
hereto (each, an "Other Holder" and collectively, the "Other
Holders").
WHEREAS, the Company, the Investors and certain of the
Other Holders are simultaneously entering into a certain
Securities Purchase Agreement, dated as of the date hereof
(the "Purchase Agreement"), whereby the Investors have
agreed to purchase shares of common stock, par value $.02
per share, of the Company (" Common Stock"), and warrants to
purchase additional shares of Common Stock ("Purchase
Warrants"); and
WHEREAS, the execution of this Agreement is an
inducement and a condition precedent to the purchase by the
Investors of Common Stock and Purchase Warrants under the
Purchase Agreement.
NOW, THEREFORE, in consideration of the premises, as an
inducement to the Investors to consummate the transactions
contemplated by the Purchase Agreement, and for other good
and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Company, the Investors and
the Other Holders hereby covenant and agree with each other
as follows:
1. Certain Definitions. As used in this Agreement, the
following terms shall have the following respective
meanings:
"Board of Directors" means the Board of Directors
of the Company.
"Commission" shall mean the United States
Securities and Exchange Commission, or any other federal
agency at the time administering the Securities Act and the
Exchange Act.
"Common Stock" shall mean the Common Stock, par
value $.02 per share, of the Company and any other
securities into which or for which any of the securities
described above may be converted or exchanged pursuant to a
plan of recapitalization, reorganization, merger, sale of
assets or otherwise.
"Company" shall refer to the Company and any
successor or successors thereto.
"Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, or any similar successor federal
statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Majority Interest" means the holders of not less
than a majority in interest in the outstanding Registrable
Securities held by all of the referenced class.
"Person" shall mean an individual, a corporation,
a partnership, a joint venture, a trust, an unincorporated
organization, a limited liability company or partnership, a
government and any agency or political subdivision thereof.
"Registrable Securities" shall mean (i) any shares
of Common Stock purchased by the Investors pursuant to the
Purchase Agreement or received by the Investors, or subject
to acquisition by any Investor upon the exercise of the
Purchase Warrants (it being understood that for purposes of
this Agreement, an Investor will be deemed to be a holder of
Registrable Securities whenever such Person has the right to
then acquire or obtain from the Company any Registrable
Securities, whether or not such acquisition has actually
been effected); (ii) any shares of Common Stock purchased
by the Other Holders pursuant to the Purchase Agreement,
owned by Other Holders on the Closing Date of the Purchase
Agreement or received by the Other Holders, or subject to
acquisition by any Other Holders upon the exercise of the
Purchase Warrants (it being understood that for purposes of
this Agreement, an Other Holder will be deemed to be a
holder of Registrable Securities whenever such Person has
the right to then acquire or obtain from the Company any
Registrable Securities, whether or not such acquisition has
actually been effected); and (iii) any other securities
issued and issuable with respect to any such shares
described in clause (i) and (ii) above by way of a stock
dividend or stock split or in connection with a combination
of shares, recapitalization, merger, consolidation or other
reorganization; provided, however, that notwithstanding
anything to the contrary contained herein, "Registrable
Securities" shall not at any time include any securities (i)
registered and sold pursuant to the Securities Act, (ii)
sold to the public pursuant to Rule 144 promulgated under
the Securities Act or (iii) which could then be sold in
their entirety pursuant to Rule 144(k) without limitation or
restriction.
"Registration Expenses" shall mean the expenses so
described in Section 5 hereof.
"Securities Act" shall mean the Securities Act of
1933, as amended, or any similar successor federal statute,
and the rules and regulations of the Commission thereunder,
all as the same shall be in effect at the time.
2. Demand Registration.
(a) At any time after the date of this Agreement, a
Majority Interest of the Investors may notify the Company
that they intend to offer or cause to be offered for public
sale all or any portion of their Registrable Securities in
the manner specified in such request. Upon receipt of such
request, the Company shall promptly deliver notice of such
request to all Persons holding Registrable Securities and
who shall then have thirty (30) days to notify the Company
in writing of their desire to be included in such
registration. If the request for registration contemplates
an underwritten public offering, the Company shall state
such in the written notice and in such event, the right of
any Person to participate in such registration shall be
conditioned upon their participation in such underwritten
public offering and the inclusion of their Registrable
Securities in the underwritten public offering to the extent
provided herein. The Company will use its reasonable best
efforts to expeditiously effect the registration of all
Registrable Securities whose holders request participation
in such registration under the Securities Act and qualified
for sale under any state blue sky law; provided, however,
that the Company shall not be required to effect
registration pursuant to a request under this Section 2 more
than one (1) time for the holders of the Registrable
Securities as a group. Notwithstanding anything to the
contrary contained herein, no request may be made under this
Section 2 within ninety (90) days after the effective date
of a registration statement filed by the Company covering a
firm commitment underwritten public offering. The Company
may postpone the filing or the effectiveness of any
registration statement pursuant to this Section 2 for a
reasonable time period, provided that such postponements
shall not exceed ninety (90) days in the aggregate during
any twelve (12) month period, if (i) the Company has been
advised by legal counsel that such filing or effectiveness
would require disclosure of a material financing,
acquisition or other corporate transaction, and the Board of
Directors of the Company determines in good faith that such
disclosure is not in the best interests of the Company and
its stockholders or (ii) the Board of Directors of the
Company determines in good faith that there is a valid
business purpose or reason for delaying filing or
effectiveness (which period may be extended an additional 30
days if such deferral will materially reduce the expenses of
such registration due to the elimination of the need for any
special audits to be performed in connection with such
registration). A registration will not count as a requested
registration under this Section 2(a) until the registration
statement relating to such registration has been declared
effective by the Commission at the request of the initiating
holders; provided, however, that if a majority in interest
of the participating Investors holding Registrable
Securities shall request, in writing, that the Company
withdraw a registration statement which has been filed under
this Section 2(a) but not yet been declared effective, a
majority in interest of such Investors may thereafter
request the Company to reinstate such Registration
Statement, if permitted under the Securities Act, or to file
another registration statement, in accordance with the
procedures set forth herein; provided however, that if the
withdrawal and filing of another registration statement
materially increases the total expenses anticipated to be
incurred with respect to the withdrawn registration, the
Investors shall share equally with the Company such
increased expenses.
(b) If a requested registration involves an underwritten
public offering and the managing underwriter of such
offering determines in good faith that the number of
securities sought to be offered should be limited due to
market conditions, then the number of securities to be
included in such underwritten public offering shall be
reduced to a number deemed satisfactory by such managing
underwriter, provided that the shares to be excluded shall
be determined in the following sequence: (i) first,
securities held by any other Persons (other than the
Investors or Other Holders holding Registrable Securities)
not having registration rights or having contractual,
incidental "piggy back" right to include such securities in
the registration statement, (ii) second, shares sought to be
registered by the Company, (iii) third, Registrable
Securities of holders (other than Investors and Other
Holders) who did not make the original request for
registration, and (iv) fourth, Registrable Securities of
holders who requested such registration pursuant to
Section 2(a), it being understood that no shares shall be
registered for the account of the Company or any shareholder
other than the Investors or Other Holders unless all
Registrable Securities for which Investors and Other Holders
have requested registration have been registered. If there
is a reduction of the number of Registrable Securities
pursuant to clauses (i), (iii) or (iv), such reduction shall
be made on a pro rata basis (based upon the aggregate number
of shares of Common Stock or Registrable Securities held by
the holders in each tranche and subject to the priorities
set forth in the preceding sentence).
(c) With respect to a request for registration pursuant to
Section 2(a) which is for an underwritten public offering,
the managing underwriter shall be chosen by the Investors
holding not less than a Majority Interest of the
Registrable Securities to be sold in such offering, subject
to the Company's consent, which such consent shall not be
unreasonably withheld. The Company may not cause any other
registration of securities for sale for its own account
(other than a registration effected solely to implement an
employee benefit plan or a transaction to which Rule 145 of
the Securities Act is applicable) to become effective within
one hundred eighty (180) days following the effective date
of any registration required pursuant to this Section 2 or
such lesser period as may be consented to by the managing
underwriter.
3. Piggyback Registration. If the Company at any time
proposes to register any of its Common Stock under the
Securities Act for sale to the public (including pursuant to
a demand under Section 2 hereof as provided therein and
except with respect to registration statements on Forms X-0,
X-0 or any successor form or another form not available for
registering the Registrable Securities for sale to the
public), each such time it will give written notice at the
applicable address of record to each holder of Registrable
Securities of its intention to do so. Upon the written
request of any Investor holding Registrable Securities,
given within thirty (30) days after receipt by such Person
of such notice, the Company will, subject to the limits
contained in this Section 3, use its reasonable best efforts
to cause all such Registrable Securities of any requesting
holders to be registered under the Securities Act and
qualified for sale under any state blue sky law, all to the
extent required to permit such sale or other disposition of
said Registrable Securities; provided, however, that if the
Company is advised in writing in good faith by any managing
underwriter of the Company's securities being offered in a
public offering pursuant to such registration statement that
the amount to be sold by persons other than the Company
(collectively, "Selling Stockholders") is greater than the
amount which can be offered without adversely affecting the
offering, the Company may reduce the amount offered for the
accounts of Selling Stockholders (including such holders of
shares of Registrable Securities) to a number deemed
satisfactory by such managing underwriter; and provided
further, that the shares to be excluded shall be determined
in the following sequence: (i) first, securities held by
any Persons not having any such contractual, incidental
registration rights, (ii) second, securities held by any
Persons having contractual, incidental registration rights
pursuant to an agreement which is not this Agreement, (iii)
third, in a registration requested pursuant to Section 2,
all Registrable Securities other than those held by the
participating Investors and Other Holders and (iv) fourth,
the Registrable Securities sought to be included by
participating Investors and Other Holders requesting
registration, pari pasu in accordance with the amount of
Registrable Securities sought to be included by each such
holder.
4. Registration Procedures. If and whenever the Company
is required by the provisions of this Agreement to use its
reasonable best efforts to effect the registration of any of
its securities under the Securities Act, the Company will,
as expeditiously as possible:
(a) use its reasonable best efforts diligently to prepare
and file with the Commission a registration statement on the
appropriate form under the Securities Act with respect to
such securities, which registration statement shall comply
as to form in all material respects with the requirements of
the applicable form and include all financial statements
required by the Commission to be filed therewith, and use
its reasonable best efforts to cause such registration
statement to become and remain effective until completion of
the proposed offering (but not for more than one hundred
eighty (180) days);
(b) prepare and file with the Commission such amendments
and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary
to keep such registration statement effective until the
completion of the offering (but not for more than one
hundred eighty (180) days) and to comply with the provisions
of the Securities Act with respect to the sale or other
disposition of all securities covered by such registration
statement whenever the seller or sellers of such securities
shall desire to sell or otherwise dispose of the same, but
only to the extent provided in this Agreement;
(c) furnish to each selling holder and the underwriters, if
any, such number of copies of such registration statement,
any amendments thereto, any documents incorporated by
reference therein, the prospectus, including a preliminary
prospectus, in conformity with the requirements of the
Securities Act, and such other documents as such selling
holder may reasonably request in order to facilitate the
public sale or other disposition of the securities owned by
such selling holder;
(d) use its reasonable best efforts to register or qualify
the securities covered by such registration statement under
and to the extent required by such other securities or state
blue sky laws of such jurisdictions as each selling holder
shall reasonably request, and do any and all other acts and
things which may be necessary under such securities or blue
sky laws to enable such selling holder to consummate the
public sale or other disposition in such jurisdictions of
the securities owned by such selling holder, except that the
Company shall not for any such purpose be required to
qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified;
(e) within a reasonable time before each filing of the
registration statement or prospectus or amendments or
supplements thereto with the Commission, furnish to counsel
selected in the manner set forth in Section 5 below by the
holders of Registrable Securities, copies of such documents
proposed to be filed, and use its reasonable best efforts to
incorporate comments;
(f) promptly notify each selling holder of Registrable
Securities, such selling holders' counsel selected in this
manner set forth in Section 5 below and any underwriter and
(if requested by any such Person) confirm such notice in
writing, of the happening of any event which makes any
statement made in the registration statement or related
prospectus untrue or which requires the making of any
changes in such registration statement or prospectus so that
they will not contain any 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
in the light of the circumstances under which they were made
not misleading; and, as promptly as practicable thereafter,
prepare and file with the Commission and furnish a
supplement or amendment to such prospectus so that, as
thereafter deliverable to the purchasers of such Registrable
Securities, such prospectus will not contain any untrue
statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading;
(g) use its reasonable best efforts to prevent the issuance
of any order suspending the effectiveness of a registration
statement, and if one is issued use its reasonable best
efforts to obtain the withdrawal of any order suspending the
effectiveness of a registration statement at the earliest
possible moment;
(h) if reasonably requested by the managing underwriter or
underwriters (if any), any selling holder, or such selling
holder's counsel, promptly incorporate in a prospectus
supplement or post-effective amendment such information as
such Person requests to be included therein with respect to
the selling holder or the securities being sold, including,
without limitation, with respect to the securities being
sold by such selling holder to such underwriter or
underwriters, the purchase price being paid therefor by such
underwriter or underwriters and with respect to any other
terms of an underwritten offering of the securities to be
sold in such offering, and promptly make all required
filings of such prospectus supplement or post-effective
amendment;
(i) make available to each selling holder, any underwriter
participating in any disposition pursuant to a registration
statement, and any attorney, accountant or other agent or
representative retained by any such selling holder or
underwriter (collectively, the "Inspectors"), all financial
and other records, pertinent corporate documents and
properties of the Company (collectively, the "Records"), as
shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information
reasonably requested by any such Inspector in connection
with such registration statement subject, in each case, to
such confidentiality agreements as the Company shall
reasonably request;
(j) enter into any reasonable underwriting agreement
required by the proposed underwriter(s) for the selling
holders, if any, and use its reasonable best efforts to
facilitate the public offering of the securities;
(k) request that each prospective selling holder be
furnished a signed counterpart, addressed to the prospective
selling holder, of (i) an opinion of counsel for the
Company, dated the effective date of the registration
statement, and (ii) if and to the extent permitted by
applicable professional standards, a "comfort" letter signed
by the independent public accountants who have certified the
Company's financial statements included in the registration
statement, covering substantially the same matters with
respect to the registration statement (and the prospectus
included therein) and (in the case of the accountants'
letter) with respect to events subsequent to the date of the
financial statements, as are customarily covered (at the
time of such registration) in opinions of the Company's
counsel and in accountants' letters delivered to the
underwriters in underwritten public offerings of securities;
(l) use its reasonable best efforts to cause the securities
covered by such registration statement to be listed on the
securities exchange or quoted on the quotation system on
which the Common Stock is then listed or quoted;
(m) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission
and make generally available to its security holders, in
each case as soon as practicable, but not later than 90
days after the close of the period covered thereby, an
earnings statement of the Company which will satisfy the
provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any comparable successor provisions); and
(n) otherwise cooperate with the underwriter(s), the
Commission and other regulatory agencies and take all
reasonable actions and execute and deliver or cause to be
executed and delivered all documents reasonably necessary to
effect the registration of any securities under this
Agreement.
5. Expenses. All reasonable expenses incurred by the
Company and the Investors in effecting the registrations
provided for in Sections 2 and 3, including, without
limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company
and one counsel for the selling stockholders as a group
(selected by a majority in interest of the Investor holders
of Registrable Securities who participate in the
registration), underwriting expenses (other than fees,
commissions or discounts), expenses of any audits incident
to or required by any such registration and expenses of
complying with the securities or blue sky laws of any
jurisdictions pursuant to Section 4(d) hereof (all of such
expenses referred to as "Registration Expenses"), shall be
paid by the Company except as expressly provided herein.
6. Indemnification.
(a) Except to the extent indemnification is provided
pursuant to section 6(b) hereof, the Company shall indemnify
and hold harmless the selling holder of Registrable
Securities, each underwriter (as defined in the Securities
Act), and each other Person who participates in the offering
of such securities and each other Person, if any, who
controls (within the meaning of the Securities Act) such
seller, underwriter or participating Person (individually
and collectively, the "Indemnified Person") against any
losses, claims, damages or liabilities (collectively, the
"liability"), joint or several, to which such Indemnified
Person may become subject under the Securities Act or any
other statute or at common law, insofar as such liability
(or action in respect thereof) arises out of or is based
upon (i) any untrue statement or alleged untrue statement of
any material fact contained, on the effective date thereof,
in any registration statement under which such securities
were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or (ii) any omission or
alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading. Except as otherwise provided in
Section 6(d), the Company shall reimburse each such
Indemnified Person in connection with investigating or
defending any such liability as expenses in connection with
the same are incurred; provided, however, that the Company
shall not be liable to any Indemnified Person in any such
case to the extent that any such liability arises out of or
is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such
registration statement, preliminary or final prospectus, or
amendment or supplement thereto in reliance upon and in
conformity with information furnished in writing to the
Company by such Indemnified Person or his agent or attorneys
specifically for use therein; and provided further, that the
Company shall not be required to indemnify any Indemnified
Person against any liability arising from any untrue or
misleading statement or omission contained in any
preliminary prospectus if such deficiency is corrected in
the final prospectus or for any liability which arises out
of the failure of any Indemnified Person to deliver a final
prospectus as required by the Securities Act.
(b) Except to the extent any liability results from the
Company's failure to incorporate any information or comments
furnished by a selling holder or his counsel, each selling
holder of any securities included in such registration being
effected shall indemnify and hold harmless each other
selling holder of any securities, the Company, its directors
and officers, each underwriter and each other Person, if
any, who controls the Company or such underwriter
(individually and collectively also the "Indemnified
Person"), against any liability, joint or several, to which
any such Indemnified Person may become subject under the
Securities Act or any other statute or at common law,
insofar as such liability (or actions in respect thereof)
arises out of or is based upon (i) any untrue statement or
alleged untrue statement of any material fact contained, on
the effective date thereof, in any registration statement
under which securities were registered under the Securities
Act at the request of such selling holder or his agent or
attorney, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereto,
or (ii) any omission or alleged omission by such selling
holder to state therein a material fact required to be
stated therein or necessary to make the statements therein
not misleading, in the case of (i) and (ii) to the extent,
but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was
made in such registration statement, preliminary or final
prospectus, amendment or supplement thereto in reliance upon
and in conformity with information furnished in writing to
the Company by such selling holder or his agent or attorney
specifically for use therein. Such selling holder shall
reimburse any Indemnified Person for any legal fees incurred
in investigating or defending any such liability; provided,
however, that such selling holder's obligations hereunder
shall be limited to an amount equal to the proceeds to such
selling holder of the securities sold in any such
registration.
(c) Indemnification similar to that specified in Sections
6(a) and (b) shall be given by the Company and each selling
holder (with such modifications as may be appropriate) with
respect to any required registration or other qualification
of their securities under any federal or state law or
regulation of governmental authority other than the
Securities Act.
(d) If the indemnification provided for in this Section 6
for any reason is held by a court of competent jurisdiction
to be unavailable to an indemnified party in respect of any
losses, claims, damages, expenses or liabilities referred to
therein, then each indemnifying party under this Section 6,
in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims,
damages, expenses or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by
the Company, the selling holders and the underwriters from
the offering of the Registrable Securities or (ii) if the
allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company, the
other selling holders and the underwriters in connection
with the statements or omissions which resulted in such
losses, claims, damages, expenses or liabilities, as well as
any other relevant equitable considerations. The relative
benefits received by the Company, the selling holders and
the underwriters shall be deemed to be in the same
respective proportions that the net proceeds from the
offering (before deducting expenses) received by the Company
and the selling holders and the underwriting discount
received by the underwriters, in each case as set forth in
the table on the cover page of the applicable prospectus,
bear to the aggregate public offering price of the
Registrable Securities. The relative fault of the Company,
the selling holders and the underwriters 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 the Company, the selling holders or
the underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The Company, the selling holders and the
underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 6 were determined
by pro rata or per capita allocation or by any other method
of allocation which does not take account of the equitable
considerations referred to in the immediately preceding
paragraph. In no event, however, shall a selling holder be
required to contribute any amount under this Section 6(d) in
excess of the lesser of (i) that proportion of the total of
such losses, claims, damages or liabilities indemnified
against equal to the proportion of the total Registrable
Securities sold under such registration statement which are
being sold by such selling holder or (ii) the proceeds
received by such selling holder from its sale of Registrable
Securities under such registration statement. No person
found 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 found
guilty of such fraudulent misrepresentation.
7. Compliance with Rule 144. For so long as the Company
(i) has a class of securities registered under Section 12 of
the Exchange Act or (ii) is required to file reports under
Section 13 or 15(d) of the Exchange Act, the Company will
use its best efforts to file with the Commission such
information as is required under the Exchange Act for so
long as there are holders of Registrable Securities; and in
such event, the Company shall use its reasonable best
efforts to take all action as may be required as a condition
to the availability of Rule 144 under the Securities Act (or
any comparable successor rules). The Company shall furnish
to any holder of Registrable Securities upon request a
written statement executed by the Company as to the steps it
has taken to comply with the current public information
requirement of Rule 144 (or such comparable successor
rules). Subject to the limitations on transfers imposed by
this Agreement, the Company shall use its reasonable best
efforts to facilitate and expedite transfers of Registrable
Securities pursuant to Rule 144 under the Securities Act,
which efforts shall include timely notice to its transfer
agent to expedite such transfers of Registrable Securities.
8. Amendments. The provisions of this Agreement may be
amended, and the Company may take any action herein
prohibited or omit to perform any act herein required to be
performed by it, only with the written consent of the
Company, a Majority Interest of the Investors and a Majority
Interest of the Other Holders.
9. Market Stand-Off. Each Investor and Other Holder
agrees, if requested by the Company and an underwriter of
Registrable Securities of the Company in connection with any
public offering of the Company and if executive officers,
directors and all other holders of 5% of the Company's
Common Stock so agree, not to sell or otherwise transfer or
dispose of any shares held by such Investor or Other Holder
for such period, not to exceed ninety (90) days following
the effective date of the relevant registration statement in
connection with any public offering of Registrable
Securities, as such underwriter shall specify reasonably and
in good faith.
10. Transferability of Registration Rights. The
registration rights set forth in this Agreement are
transferable to each permitted transferee of the Registrable
Securities provided that: (a) the Company is given written
notice specifying the name, address, and number of
Registrable Securities being transferred, (b) the transfer
involves the lesser of all of the Registrable Securities
held by Transferor or at least 450,000 shares, (c) the
notice of transfer is accompanied by either (i) a written
opinion of legal counsel who shall be reasonably
satisfactory to the Company addressed to the Company and
reasonably satisfactory in form and substance to the
Company's counsel to the effect that the proposed transfer
may be effected without registration under the Act, or (ii)
a "no action" letter from the Commission to the effect that
the proposed transfer without registration will not result
in a recommendation by the staff of the Commission that
action to be taken with respect thereto; and provided
further that each subsequent holder of Registrable
Securities must consent in writing to be bound by the terms
and conditions of this Agreement in order to acquire the
rights granted pursuant to this Agreement. Notwithstanding
the foregoing, the registration rights set forth in this
agreement shall automatically transfer to and be binding
upon any transferee of Purchasers or Other Holders as a
result of a gift or bequest of Registrable Securities by
such transferor.
11. Rights Which May Be Granted to Subsequent Investors.
Other than permitted transferees of Registrable Securities
under Section 10 hereof, the Company shall not, without the
prior written consent of a Majority Interest of the
Investors, (a) allow purchasers of the Company's securities
to become a party to this Agreement or (b) grant any other
registration rights to any third parties other than
subordinate piggyback registration rights.
12. Damages. The Company recognizes and agrees that each
holder of Registrable Securities will not have an adequate
remedy if the Company fails to comply with the terms and
provisions of this Agreement and that damages will not be
readily ascertainable, and the Company expressly agrees
that, in the event of such failure, it shall not oppose an
application by any holder of Registrable Securities or any
other Person entitled to the benefits of this Agreement
requiring specific performance of any and all provisions
hereof or enjoining the Company from continuing to commit
any such breach of this Agreement.
13. Miscellaneous.
(a) All notices, requests, demands and other communications
provided for hereunder shall be in writing and mailed (by
first class registered or certified mail, postage prepaid),
telegraphed, sent by express overnight courier service or
electronic facsimile transmission (with a copy by mail), or
delivered to the applicable party at the addresses indicated
below:
If to the Company:
Hadron, Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: President
With copy to Company's counsel
If to the Investors:
Xxx X. Xxxxx
00 Xxxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
If to any other holder of Registrable Securities:
At such Person's address for notice as set forth in the
books and records of the Company, or, as to each of the
foregoing, at such other address as shall be designated by
such Person in a written notice to other parties complying
as to delivery with the terms of this subsection (a). All
such notices, requests, demands and other communications
shall, when mailed, telegraphed or sent, respectively, be
effective (i) two days after being deposited in the mails or
(ii) one day after being delivered to the telegraph company,
deposited with the express overnight courier service or sent
by electronic facsimile transmission, respectively,
addressed as aforesaid.
(b) This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia,
without giving effect to conflict of laws principles
thereof.
(c) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
(d) If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality,
invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of
this Agreement, and this Agreement shall be carried out as
if any such illegal, invalid or unenforceable provision were
not contained herein.
14. Dispute Resolution. Except as provided below, any
dispute arising out of or relating to this Agreement or the
breach, termination or validity hereof shall be finally
settled by binding arbitration conducted expeditiously in
accordance with the J.A.M.S./Endispute Comprehensive
Arbitration Rules and Procedures (the "J.A.M.S. Rules").
The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. 1-16, and judgment upon the
award rendered by the arbitrators may be entered by any
court having jurisdiction thereof. The place of arbitration
shall be the Metropolitan Area of Washington, D.C.
Such proceedings shall be administered by the neutral
arbitrator in accordance with the J.A.M.S. Rules as he/she
deems appropriate, however, such proceedings shall be guided
by the following agreed upon procedures:
(i) mandatory exchange of all relevant
documents, to be accomplished within forty-five (45) days of
the initiation of the procedure;
(ii) no other discovery;
(iii) hearings before the neutral
arbitrator which shall consist of a summary presentation by
each side of not more than three (3) hours; such hearings to
take place on one or two days at a maximum; and
(iv) decision to be rendered not more than
ten (10) days following such hearings.
Notwithstanding anything to the contrary contained
herein, the provisions of this Section 14 shall not apply
with regard to any equitable remedies to which any party may
be entitled hereunder.
Each of the parties hereto (a) hereby irrevocably
submits to the jurisdiction of any United States District
Court of competent jurisdiction for the purpose of enforcing
the award or decision in any such proceeding, (b) hereby
waives, and agrees not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or
proceeding, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution
(except as protected by applicable law), that the suit,
action or proceeding is brought in an inconvenient forum,
that the venue of the suit, action or proceeding is improper
or that this Agreement or the subject matter hereof may not
be enforced in or by such court, and hereby waives and
agrees not to seek any review by any court of any other
jurisdiction which may be called upon to grant an
enforcement of the judgment of any such court. Each of the
parties hereto hereby consents to service of process by
registered mail at the address to which notices are to be
given. Each of the parties hereto agrees that its or his
submission to jurisdiction and its or his consent to service
of process by mail is made for the express benefit of the
other parties hereto. Final judgment against any party
hereto in any such action, suit or proceeding may be
enforced in other jurisdictions by suit, action or
proceeding on the judgment, or in any other manner provided
by or pursuant to the laws of such other jurisdiction.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this
Registration Rights Agreement to be duly executed as of the
date first set forth above.
THE COMPANY: INVESTORS:
HADRON, INC.
By /S/ X.X. XXXXXXX /S/ XXX X. XXXXX
----------------- ----------------------
X. X. Xxxxxxx, Xxx X. Xxxxx
Chairman and CEO
/S/ XXXXXXXX X. XXXXX
----------------------
Xxxxxxxx X. Xxxxx
Xxxxx Dynastic Trust
/S/ XXX X. XXXXX
----------------------
By Xxx X. Xxxxx, Trustee
/S/ J. XXXXXXX XXXX
----------------------
J. Xxxxxxx Xxxx
THE OTHER HOLDERS:
/S/ X.X. XXXXXXX /S/ XXXXX XXXXXX
------------------------- ------------------------
X. X. Xxxxxxx S. Xxxxx Xxxxxx
/S. XXXX X. XXXXXXX /S/ XXXXXX X. XXXXX
------------------------- ------------------------
Xxxx X. Xxxxxxx Xxxxxx X. Xxxxx
/S/ XXXXXX X. XXXXXX /S/ XXXXXX X. XXXXXX
------------------------- -------------------------
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx
XXXXX XXXX AFFILIATES
/S/ XXXX XXXXX /S/ XXXX XXXXX
------------------------- -------------------------
Xxxx Xxxxx Xxxx Xxxxx
/S/ J. XXXXXXX XXXX /S/ XXXXXXXX XXXXXXXXXX
------------------------- -------------------------
J. Xxxxxxx Xxxx Xxxxxxxx Xxxxxxxxxx
/S/ XXXXXXX XXXXXX /S/ XXX XXXXXX
------------------------- -------------------------
Xxxxxxx Xxxxxx Xxx Xxxxxx
/S/ XXXXX XXXXXX
-------------------------
Xxxxx Xxxxxx
