Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as
of the __ day of __________, 2006, by and among Vector Intersect Security
Acquisition Corp., a Delaware corporation (the "Company"), and the undersigned
parties listed as Investors on the signature page and Exhibit A hereto (each, an
"Investor" and collectively, the "Investors").
WHEREAS, collectively, the Investors currently hold all of the issued and
outstanding securities of the Company; and
WEHREAS, each Investor currently owns the number of Initial Shares (as
hereinafter defined) and Private Placement Units (as hereinafter defined) set
forth next to such Investor's name on Exhibit A hereto; and
WHEREAS, the Investors and the Company desire to enter into this Agreement
to provide the Investors with certain rights relating to the registration of the
Initial Investor Shares and the securities comprising the Private Placement
Units held by them as listed on Exhibit A hereto;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS; INTERPRETATION. The following capitalized terms used
herein have the following meanings:
"Agreement" means this Agreement, as amended, restated, supplemented, or
otherwise modified from time to time.
"Business Combination" means the acquisition by the Company by a merger,
capital stock exchange, asset or stock acquisition or other similar business
combination, or control through contractual arrangements, of one or more Target
Businesses having a fair market value of at least 80% of the Company's net
assets at the time of such acquisition.
"Commission" means the Securities and Exchange Commission, or any other
federal agency then administering the Securities Act or the Exchange Act.
"Common Stock" means the common stock, par value $0.001 per share, of the
Company.
"Company" is defined in the preamble to this Agreement.
"Demand Registration" is defined in Section 2.1.1.
"Demanding Holder" is defined in Section 2.1.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder, all as the
same shall be in effect at the time.
`First Release Date" means the date on which the Company publicly
announces that it has entered into a letter of intent with respect to its
initial Business Combination.
"Form S-3" is defined in Section 2.3.
"Indemnified Party" is defined in Section 4.3.
"Indemnifying Party" is defined in Section 4.3.
"Initial Investor Shares" means all of the Common Stock held by the
Investors before the consummation of the Private Placement and any Common Stock
issued as a dividend or other distribution with respect to or in exchange for or
in replacement of such shares of Common Stock.
"Investor" is defined in the preamble to this Agreement.
"Investor Indemnified Party" is defined in Section 4.1.
"Maximum Number of Shares" is defined in Section 2.1.4.
"Notices" is defined in Section 6.2.
"Piggy-Back Registration" is defined in Section 2.2.1.
"Private Placement" means the sale by the Company of 93,750 Units, each
consisting of one share of Common Stock and one Warrant (the "Private Placement
Units") to certain of the Investors, pursuant to that certain Placement Unit
Purchase Agreement dated as of the date hereof by and among the Company and the
Investors listed on the signature pages thereto.
"Pro Rata" is defined in Section 2.1.4.
"Purchase Option" means the option to purchase 740,625 Units (the
"Representative Units") each consisting of one share of Common Stock and one
Warrant (the "Representative Warrants") issued by the Company of the date hereof
to Xxxxxx & Xxxxxxx LLC or its designees in connection with the Company's
initial public offering (as such option may be transferred from time to time in
accordance with its terms).
"Purchase Option Securities" means the shares of Common Stock and the
Representative Warrants that comprise the Representative Units and the shares of
Common Stock issuable upon exercise of the Representative Warrants that have
been granted any registration rights by the Company.
"Register," "registered" and "registration" mean a registration effected
by preparing and filing a registration statement or similar document in
compliance with the requirements of the
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Securities Act, and the applicable rules and regulations promulgated thereunder,
and such registration statement becoming effective.
"Registrable Securities" means (i) on and after the First Release Date and
prior to the Second Release Date, the Unit Shares, the Warrants and the Warrant
Shares collectively and (ii) on and after the Second Release Date, the Initial
Investor Shares, the Unit Shares, the Warrants and the Warrant Shares
collectively. As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when: (a) a Registration Statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been sold, transferred, disposed
of or exchanged in accordance with such Registration Statement; (b) such
securities shall have been otherwise transferred, new certificates for them not
bearing a legend restricting further transfer shall have been delivered by the
Company and subsequent public distribution of them shall not require
registration under the Securities Act; (c) such securities shall have ceased to
be outstanding, or (d) the Securities and Exchange Commission makes a definitive
determination to the Company that the Registrable Securities are saleable under
Rule 144(k).
"Registration Statement" means a registration statement filed by the
Company with the Commission in compliance with the Securities Act and the rules
and regulations promulgated thereunder for a public offering and sale of Common
Stock (other than a registration statement on Form S-4 or Form S-8, or their
successors, or any registration statement covering only securities proposed to
be issued in exchange for securities or assets of another entity).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder, all as the same
shall be in effect at the time.
"Second Release Date" means the date on which the Initial Investor Shares
are released from escrow in accordance with the terms of the Escrow Agreement
dated as of __________, 2006 by and among the Company, the Investors listed on
the signature page thereto and American Stock Transfer and Trust Company as
Escrow Agent.
"Target Business" means an operating business based either in the United
States or abroad that conducts business in the homeland security, national
security and/or command and control industries or a business relating to the
manufacture of products for use in such industries.
"Underwriter" means a securities dealer who purchases any Registrable
Securities as principal in an underwritten offering and not as part of such
dealer's market-making activities.
"Unit Shares" means the shares of Common Stock included in the Private
Placement Units and any Common Stock issued as a dividend or other distribution
with respect to or in exchange for or in replacement of such shares of Common
Stock.
"Warrant Shares" means the shares of Common Stock issuable upon exercise
of the Warrants and any Common Stock issued as a dividend or other distribution
with respect to or in exchange for or in replacement of such shares of Common
Stock.
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"Warrants" means the Company's Common Stock purchase warrants issued
pursuant to a Warrant Agreement dates as of the date hereof between the Company
and American Stock Transfer and Trust Company as Warrant Agent (the "Warrant
Agreement") and included in the Private Placement Units.
2. REGISTRATION RIGHTS.
2.1 Demand Registration.
2.1.1. Request for Registration. At any time and from time to time
on or after the First Release Date, the holders of a majority in interest of the
Unit Shares, the Warrants and the Warrant Shares collectively, may make a
written demand for registration under the Securities Act of all or part of their
Registrable Securities (a "Demand Registration"). At any time and from time to
time on or after the Second Release Date, the holders of a majority in interest
of the Initial Investor Shares may request a Demand Registration for all or part
of their Registrable Securities. Any demand for a Demand Registration shall
specify the number of shares of Registrable Securities proposed to be sold and
the intended method(s) of distribution thereof. The Company will notify all
holders of Registrable Securities of a requested Demand Registration, and each
holder of Registrable Securities who wishes to include all or a portion of such
holder's Registrable Securities in the Demand Registration (each such holder
including shares of Registrable Securities in such registration, a "Demanding
Holder") shall so notify the Company within fifteen (15) days after the receipt
by the holder of the notice from the Company. Upon any such request, the
Demanding Holders shall be entitled to have their Registrable Securities
included in the Demand Registration, subject to Section 2.1.4 and the provisos
set forth in Section 3.1.1. The Company shall not be obligated to effect more
than an aggregate of on (1) Demand Registration at the request of the holders of
the Unit Shares, the Warrants and the Warrant Shares, collectively two (2)
Demand Registrations at the request of the holders of the Initial Investor
Shares, in each case, under this Section 2.1.1 in respect of Registrable
Securities. Notwithstanding anything to the contrary contained herein, the
Company shall not be required to seek to cause a Registration Statement with
respect to a Demand Registration to become effective pursuant to this Section
2.1: (A) within a period of ninety (90) days after the effective date of a
Registration Statement filed by the Company; provided, that the Company shall
use commercially reasonable efforts to cause a Demand Registration requested
hereunder to be declared effective promptly following such period if such a
request is made during such period; or (B) if the Company shall furnish to the
Demanding Holder or Holders, a certificate signed by the Chief Executive Officer
of the Company stating that in the good faith judgment of the Board of Directors
of the Company, the filing of a Registration Statement would, at such time,
materially and adversely affect (i) the financial condition of the Company, in
view of a requirement to disclose material non-public information relating to
the Company, which the Company has a bona fide business purpose for preserving
as confidential or (ii) an existing continuing negotiation relating to an
acquisition, disposition, corporate reorganization, private securities offering,
financing or similar transaction with respect to the Company, then the Company
shall have the right to defer such filing for a period of no more than ninety
(90) days; provided, however that the Company may not exercise this right more
than once during any period of twelve (12) consecutive months.
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2.1.2. Effective Registration. A registration will not count as a
Demand Registration until the Registration Statement filed with the Commission
with respect to such Demand Registration has been declared effective and the
Company has complied with all of its obligations under this Agreement with
respect thereto; provided, however, that if, after such Registration Statement
has been declared effective, the offering of Registrable Securities pursuant to
a Demand Registration is interfered with by any stop order or injunction of the
Commission or any other governmental agency or court, the Registration Statement
with respect to such Demand Registration will be deemed not to have been
declared effective, unless and until, (i) such stop order or injunction is
removed, rescinded or otherwise terminated, and (ii) a majority in interest of
the Demanding Holders thereafter elect to continue the offering.
2.1.3. Underwritten Offering. If a majority in interest of the
Demanding Holders so elect and such holders so advise the Company as part of
their written demand for a Demand Registration, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. In such event, the Company shall have the right (subject
to the reasonable approval of a majority in interest of the Demanding Holders)
to select the Underwriter(s) for such offering. All Demanding Holders proposing
to distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the Underwriter or Underwriters
selected for such underwriting.
2.1.4. Reduction of Offering. If the managing Underwriter or
Underwriters for a Demand Registration that is to be an underwritten offering
advises the Company and the Demanding Holders in writing that the dollar amount
or number of shares of Registrable Securities which the Demanding Holders desire
to sell, taken together with all other shares of Common Stock or other
securities which the Company desires to sell and the shares of Common Stock or
other securities, if any, as to which registration has been requested pursuant
to written contractual piggy-back registration rights held by other shareholders
of the Company who desire to sell, exceeds the maximum dollar amount or maximum
number of shares that can be sold in such offering without adversely affecting
the proposed offering price, the timing, the distribution method, or the
probability of success of such offering (such maximum dollar amount or maximum
number of shares, as applicable, the "Maximum Number of Shares"), then the
Company shall include in such registration: (i) first, the Registrable
Securities as to which Demand Registration has been requested (all pro rata in
accordance with the number of shares that each such person has requested be
included in such registration, regardless of the number of shares held by each
such person (such proportion is referred to herein as "Pro Rata")) that can be
sold without exceeding the Maximum Number of Shares; (ii) second, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clause (i), all shares of Common Stock or other securities that the Company
desires to sell and that can be sold without exceeding the Maximum Number of
Shares; and (iii) third, to the extent that the Maximum Number of Shares has not
been reached under the foregoing clauses (i) and (ii), the shares of the account
of other persons, including without limitation any Purchase Option Securities,
that the Company is obligated to register pursuant to written contractual
arrangements with other persons and that can be sold without exceeding the
Maximum Number of Shares.
2.1.5. Withdrawal. If a majority in interest of the Demanding
Holders disapprove of the terms of any underwriting or are not entitled to
include all of their Registrable Securities in any underwritten offering, such
majority in interest of the Demanding Holders may
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elect to withdraw from such offering by giving written notice to the Company and
the Underwriter or Underwriters of their request to withdraw prior to the
effectiveness of the Registration Statement filed with the Commission with
respect to such Demand Registration. If the majority in interest of the
Demanding Holders withdraws from a proposed underwritten offering relating to a
Demand Registration, then such registration shall not count as a Demand
Registration provided for in Section 2.1.1.
2.2 Piggy-Back Registration.
2.2.1. Piggy-Back Rights. If at any time on or after the First
Release Date the Company proposes to file a Registration Statement under the
Securities Act with respect to an offering of equity securities, or securities
or other obligations exercisable or exchangeable for, or convertible into,
equity securities, by the Company for its own account or for the account of
other securityholders of the Company (or by the Company and by securityholders
of the Company including, without limitation, pursuant to Section 2.1), other
than a Registration Statement (i) filed in connection with any employee stock
option or other benefit plan, (ii) for an exchange offer or offering of
securities solely to the Company's existing shareholders, (iii) for an offering
of debt that is convertible into equity securities of the Company or (iv) for a
dividend reinvestment plan, then the Company shall (x) give written notice of
such proposed filing to the holders of Registrable Securities as soon as
practicable but in no event less than ten (10) days before the anticipated
filing date, which notice shall describe the amount and type of securities to be
included in such offering, the intended method(s) of distribution, and the name
of the proposed managing Underwriter or Underwriters, if any, of the offering,
and (y) offer to the holders of Registrable Securities in such notice the
opportunity to register the sale of such number of shares of Registrable
Securities as such holders may request in writing within fifteen (15) days
following receipt of such notice (a "Piggy-Back Registration"). The Company
shall cause such Registrable Securities to be included in such registration and
shall use its best efforts to cause the managing Underwriter or Underwriters of
a proposed underwritten offering to permit the Registrable Securities requested
to be included in a Piggy-Back Registration to be included on the same terms and
conditions as any similar securities of the Company and to permit the sale or
other disposition of such Registrable Securities in accordance with the intended
method(s) of distribution thereof. All holders of Registrable Securities
proposing to distribute their securities through a Piggy-Back Registration that
involves an Underwriter or Underwriters shall enter into an underwriting
agreement in customary form with the Underwriter or Underwriters selected for
such Piggy-Back Registration. The Company shall have no obligation under this
Section 2.2 to complete any offering of its securities that it proposes to make.
2.2.2. Reduction of Offering. If the managing Underwriter or
Underwriters for a Piggy-Back Registration that is to be an underwritten
offering advises the Company and the holders of Registrable Securities in
writing that the dollar amount or number of shares of Common Stock or other
securities which the Company desires to sell, taken together with shares of
Common Stock or other securities, if any, as to which registration has been
demanded pursuant to written contractual arrangements with persons other than
the holders of Registrable Securities hereunder, the Registrable Securities as
to which registration has been requested under this Section 2.2, and the shares
of Common Stock or other securities, if any, as to which registration has been
requested pursuant to the written contractual piggy-back registration rights
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of other shareholders of the Company, exceeds the Maximum Number of Shares, then
the Company shall include in any such registration:
(i) first, the shares of Common Stock or other securities
that the Company desires to sell together with the Registrable Securities as to
which registration has been requested Pro Rata, that can be sold without
exceeding the Maximum Number of Shares; and;
(ii) second, to the extent that the Maximum Number of
Shares has not been reached under the foregoing clause (i), the shares of Common
Stock or other securities for the account of other persons that the Company is
obligated to register pursuant to written contractual arrangements with such
persons, including, without limitation, any Purchase Option Securities, that can
be sold without exceeding the Maximum Number of Shares.
2.2.3. Withdrawal. Any holder of Registrable Securities may elect
to withdraw such holder's request for inclusion of Registrable Securities in any
Piggy-Back Registration by giving written notice to the Company of such request
to withdraw prior to the effectiveness of the Registration Statement. The
Company may also elect to withdraw a registration statement at any time prior to
the effectiveness of the Registration Statement. Notwithstanding any withdrawal
by the Company, the Company shall pay all expenses incurred by the holders of
Registrable Securities in connection with such Piggy-Back Registration as
provided in Section 3.3.
2.3 Registrations on Form S-3. In case the Company shall, at any time
after the First Release Date be permitted to effect a registration on Form S-3
or other similar short-form registration which may be available at such time
with respect to all or a part of the Registrable Securities, the holders of
Registrable Securities shall be entitled to request in writing that the Company
register the resale of any or all of such Registrable Securities on Form S-3 or
such other similar short-form registration; provided, however, that the Company
shall not be obligated to effect such request through an underwritten offering.
Upon receipt of such written request, the Company will promptly give written
notice of the proposed registration to all other holders of Registrable
Securities, and, as soon as practicable thereafter, effect the registration of
all or such portion of such holder's or holders' Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any other holder or holders joining in such request as are
specified in a written request given within fifteen (15) days after receipt of
such written notice from the Company; provided, however, that the Company shall
not be obligated to effect any such registration pursuant to this Section 2.3 if
the holders of the Registrable Securities, together with the holders of any
other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at
any aggregate price to the public of less than $500,000. Registrations effected
pursuant to this Section 2.3 shall not be counted as Demand Registrations
effected pursuant to Section 2.1. Notwithstanding anything to the contrary
contained herein, the Company shall not be required to seek to cause a
Registration Statement with respect to a Form S-3 or other short-form
registration to become effective pursuant to this Section 2.3: (A) within a
period of ninety (90) days after the effective date of a Registration Statement
filed by the Company; provided, that the Company shall use commercially
reasonable efforts to cause a Form S-3 or other short-form registration
requested hereunder to be declared effective promptly following such period if
such a request is made during such period; or (B) if the Company shall furnish
to the requesting
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holder or holders, a certificate signed by the Chief Executive Officer of the
Company stating that in the good faith judgment of the Board of Directors of the
Company, the filing of a Registration Statement would, at such time, materially
and adversely affect (i) the financial condition of the Company, in view of a
requirement to disclose material non-public information relating to the Company,
which the Company has a bona fide business purpose for preserving as
confidential or (ii) an existing continuing negotiation relating to an
acquisition, disposition, corporate reorganization, private securities offering,
financing or similar transaction with respect to the Company, then the Company
shall have the right to defer such filing for a period of no more than ninety
(90) days; provided, however that the Company may not exercise this right more
than once during any period of twelve (12) consecutive months.
3. REGISTRATION PROCEDURES.
3.1 Filings; Information. Whenever the Company is required to effect the
registration of any Registrable Securities pursuant to Section 2, the Company
shall use its best efforts to effect the registration and sale of such
Registrable Securities in accordance with the intended method(s) of distribution
thereof as expeditiously as practicable, and in connection with any such
request:
3.1.1. Filing Registration Statement. The Company shall, as
expeditiously as possible and in any event within sixty (60) days after receipt
of a request for a Demand Registration pursuant to Section 2.1, prepare and file
with the Commission a Registration Statement on any form for which the Company
then qualifies or which counsel for the Company shall deem appropriate and which
form shall be available for the sale of all Registrable Securities to be
registered thereunder in accordance with the intended method(s) of distribution
thereof, and shall use its best efforts to cause such Registration Statement to
become and remain effective for the period required by Section 3.1.3.
3.1.2. Copies. The Company shall, prior to filing a Registration
Statement or prospectus, or any amendment or supplement thereto, furnish without
charge to the holders of Registrable Securities included in such registration,
and such holders' legal counsel, copies of such Registration Statement as
proposed to be filed, each amendment and supplement to such Registration
Statement (in each case including all exhibits thereto and documents
incorporated by reference therein), the prospectus included in such Registration
Statement (including each preliminary prospectus), and such other documents as
the holders of Registrable Securities included in such registration or legal
counsel for any such holders may request in order to facilitate the disposition
of the Registrable Securities owned by such holders.
3.1.3. Amendments and Supplements. The Company shall prepare and
file with the Commission such amendments, including post-effective amendments,
and supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such Registration Statement
effective and in compliance with the provisions of the Securities Act until all
Registrable Securities and other securities covered by such Registration
Statement have been disposed of in accordance with the intended method(s) of
distribution set forth in such Registration Statement (which period shall not
exceed the sum of one hundred eighty (180) days plus any period during which any
such disposition is interfered
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with by any stop order or injunction of the Commission or any governmental
agency or court) or such securities have been withdrawn.
3.1.4. Notification. After the filing of a Registration Statement,
the Company shall promptly, and in no event more than two (2) business days
after such filing, notify the holders of Registrable Securities included in such
Registration Statement of such filing, and shall further notify such holders
promptly and confirm such advice in writing in all events within two (2)
business days of the occurrence of any of the following: (i) when such
Registration Statement becomes effective; (ii) when any post-effective amendment
to such Registration Statement becomes effective; (iii) the issuance or
threatened issuance by the Commission of any stop order (and the Company shall
take all actions required to prevent the entry of such stop order or to remove
it if entered); and (iv) any request by the Commission for any amendment or
supplement to such Registration Statement or any prospectus relating thereto or
for additional information or of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of the securities covered by such
Registration Statement, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and promptly make
available to the holders of Registrable Securities included in such Registration
Statement any such supplement or amendment; except that before filing with the
Commission a Registration Statement or prospectus or any amendment or supplement
thereto, including documents incorporated by reference, the Company shall
furnish to the holders of Registrable Securities included in such Registration
Statement and to the legal counsel for any such holders, copies of all such
documents proposed to be filed sufficiently in advance of filing to provide such
holders and legal counsel with a reasonable opportunity to review such documents
and comment thereon, and the Company shall not file any Registration Statement
or prospectus or amendment or supplement thereto, including documents
incorporated by reference, to which such holders or their legal counsel shall
object.
3.1.5. State Securities Laws Compliance. The Company shall use its
best efforts to (i) register or qualify the Registrable Securities covered by
the Registration Statement under such securities or "blue sky" laws of such
jurisdictions in the United States as the holders of Registrable Securities
included in such Registration Statement (in light of their intended plan of
distribution) may request and (ii) take such action necessary to cause such
Registrable Securities covered by the Registration Statement to be registered
with or approved by such other Governmental Authorities as may be necessary by
virtue of the business and operations of the Company and do any and all other
acts and things that may be necessary or advisable to enable the holders of
Registrable Securities included in such Registration Statement to consummate the
disposition of such Registrable Securities in such jurisdictions; provided,
however, that the Company shall not be required to qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph (e) or subject itself to taxation in any such
jurisdiction.
3.1.6. Agreements for Disposition. The Company shall enter into
customary agreements (including, if applicable, an underwriting agreement in
customary form) and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of Registrable Securities. The
representations, warranties and covenants of the Company in any underwriting
agreement which are made to or for the benefit of any Underwriters, to the
extent
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applicable, shall also be made to and for the benefit of the holders of the
Registrable Securities included in such underwritten public offering. No holder
of Registrable Securities included in such registration statement shall be
required to make any representations or warranties in the underwriting agreement
except as reasonably requested by the Company and, if applicable, with respect
to such holder's organization, good standing, authority, title to Registrable
Securities, lack of conflict of such sale with such holder's material agreements
and organizational documents, and with respect to written information relating
to such holder that such holder has furnished in writing expressly for inclusion
in such Registration Statement. Holders of Registrable Securities shall agree to
such covenants and indemnification and contribution obligations for selling
shareholders as are customarily contained in agreements of that type. Further,
such holders shall cooperate fully in the preparation of the Registration
Statement and other documents relating to any offering in which they include
Registrable Securities pursuant to Section 2 hereof. Each holder shall also
furnish to the Company such information regarding itself, the Registrable
Securities held by such holder, as applicable, and the intended method of
disposition of such securities as shall be reasonably required to effect the
registration of the Registrable Securities.
3.1.7. Cooperation. The principal executive officer of the Company,
the principal financial officer of the Company, the principal accounting officer
of the Company and all other officers and members of the management of the
Company shall cooperate fully in any offering of Registrable Securities
hereunder, which cooperation shall include, without limitation, the preparation
of the Registration Statement with respect to such offering and all other
offering materials and related documents, and participation in meetings with
Underwriters, attorneys, accountants and potential investors.
3.1.8. Records. The Company shall make available for inspection by
the holders of Registrable Securities included in such Registration Statement,
any Underwriter participating in any disposition pursuant to such Registration
Statement and any attorney, accountant or other professional retained by any
holder of Registrable Securities included in such Registration Statement or by
any Underwriter participating in such distribution, all financial and other
records, pertinent corporate documents and properties of the Company, as shall
be necessary to enable them to exercise their due diligence responsibility, and
cause the Company's officers, directors and employees to supply all information
requested by any of them in connection with such Registration Statement.
3.1.9. Opinions and Comfort Letters. The Company shall furnish to
each holder of Registrable Securities included in any Registration Statement a
signed counterpart, addressed to such holder, of (i) any opinion of counsel to
the Company delivered to any Underwriter and (ii) any comfort letter from the
Company's independent public accountants delivered to any Underwriter. In the
event no legal opinion is delivered to any Underwriter, the Company shall
furnish to each holder of Registrable Securities included in such Registration
Statement, at any time that such holder elects to use a prospectus, an opinion
of counsel to the Company to the effect that the Registration Statement
containing such prospectus has been declared effective and that no stop order is
in effect.
3.1.10. Earnings Statement. The Company shall comply with all
applicable rules and regulations of the Commission and the Securities Act, and
make available to its
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shareholders, as soon as practicable, an earnings statement covering a period of
twelve (12) months, beginning within three (3) months after the effective date
of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
3.1.11. Listing. The Company shall use its best efforts to cause all
Registrable Securities included in any registration to be listed on such
exchanges or otherwise designated for trading in the same manner as similar
securities issued by the Company are then listed or designated.
3.2 Obligation to Suspend Distribution. Upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
3.1.4(iv), or, in the case of a resale registration on Form S-3 or similar
short-form registration effected pursuant to Section 2.3 hereof, upon any
suspension by the Company, pursuant to a written xxxxxxx xxxxxxx compliance
program adopted by the Company's Board of Directors, of the ability of all
"insiders" covered by such program to transact in the Company's securities
because of the existence of material non-public information, each holder of
Registrable Securities included in any registration shall immediately
discontinue disposition of such Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such holder
receives the supplemented or amended prospectus contemplated by Section
3.1.4(iv) or the restriction on the ability of "insiders" to transact in the
Company's securities is removed, as applicable, and, if so directed by the
Company, each such holder will deliver to the Company all copies, other than
permanent file copies then in such holder's possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice.
3.3 Registration Expenses. The Company shall bear all costs and expenses
incurred in connection with any Demand Registration pursuant to Section 2.1, any
Piggy-Back Registration pursuant to Section 2.2, and any registration on Form
S-3 effected pursuant to Section 2.3, and all expenses incurred in performing or
complying with its other obligations under this Agreement, whether or not the
Registration Statement becomes effective, including, without limitation: (i) all
registration and filing fees; (ii) fees and expenses of compliance with
securities or "blue sky" laws (including fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities); (iii)
printing expenses; (iv) the Company's internal expenses (including, without
limitation, all salaries and expenses of its officers and employees); (v) the
fees and expenses incurred in connection with the listing of the Registrable
Securities as required by Section 3.1.11; (vi) National Association of
Securities Dealers, Inc. fees; (vii) fees and disbursements of counsel for the
Company and fees and expenses for independent certified public accountants
retained by the Company (including the expenses or costs associated with the
delivery of any opinions or comfort letters requested pursuant to Section
3.1.9); (viii) the fees and expenses of any special experts retained by the
Company in connection with such registration and (ix) the fees and expenses of
one legal counsel selected by the holders of a majority in interest of the
Registrable Securities included in such registration. The Company shall have no
obligation to pay any underwriting discounts or selling commissions attributable
to the Registrable Securities being sold by the holders thereof, which
underwriting discounts or selling commissions shall be borne by such holders.
Additionally, in an underwritten offering, all selling shareholders and the
Company shall bear the expenses of the
11
underwriter pro rata in proportion to the respective amount of shares each is
selling in such offering.
3.4 Information. The holders of Registrable Securities shall provide
such information as may reasonably be requested by the Company, or the managing
Underwriter, if any, in connection with the preparation of any Registration
Statement, including amendments and supplements thereto, in order to effect the
registration of any Registrable Securities under the Securities Act pursuant to
Section 2 and in connection with the Company's obligation to comply with federal
and applicable state securities laws.
4. INDEMNIFICATION AND CONTRIBUTION.
4.1 Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Investor and each other holder of Registrable Securities, and
each of their respective officers, employees, affiliates, directors, partners,
members, attorneys and agents, and each person, if any, who controls an Investor
and each other holder of Registrable Securities (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) (each, an "Investor
Indemnified Party"), from and against any expenses, losses, judgments, claims,
damages or liabilities, whether joint or several, arising out of or based upon
any untrue statement (or allegedly untrue statement) of a material fact
contained in any Registration Statement under which the sale of such Registrable
Securities was registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained in the Registration Statement,
or any amendment or supplement to such Registration Statement, or arising out of
or based upon any omission (or alleged omission) to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule or
regulation promulgated thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration; and the Company shall promptly reimburse the Investor Indemnified
Party for any legal and any other expenses reasonably incurred by such Investor
Indemnified Party in connection with investigating and defending any such
expense, loss, judgment, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
expense, loss, claim, damage or liability arises out of or is based upon any
untrue statement or allegedly untrue statement or omission or alleged omission
made in such Registration Statement, preliminary prospectus, final prospectus,
or summary prospectus, or any such amendment or supplement, in reliance upon and
in conformity with information furnished to the Company, in writing, by such
selling holder expressly for use therein. The Company also shall indemnify any
Underwriter of the Registrable Securities, their officers, employees,
affiliates, directors, partners, members and agents and each person who controls
such Underwriter on substantially the same basis as that of the indemnification
provided above in this Section 4.1.
4.2 Indemnification by Holders of Registrable Securities. Each selling
holder of Registrable Securities will, in the event that any registration is
being effected under the Securities Act pursuant to this Agreement of any
Registrable Securities held by such selling holder, indemnify and hold harmless
the Company, each of its directors and officers and each Underwriter (if any),
and each other person, if any, who controls such selling holder or such
Underwriter or the Company within the meaning of the Securities Act or the
Exchange Act,
12
against any losses, claims, judgments, damages or liabilities, whether joint or
several, insofar as such losses, claims, judgments, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or allegedly untrue statement of a material fact contained in any Registration
Statement under which the sale of such Registrable Securities was registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or the alleged omission to state a material fact required to be stated
therein or necessary to make the statement therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by such selling holder expressly
for use therein, and shall reimburse the Company, its directors and officers,
and each such controlling person for any legal or other expenses reasonably
incurred by any of them in connection with investigation or defending any such
loss, claim, damage, liability or action. Each selling holder's indemnification
obligations hereunder shall be several and not joint and shall be limited to the
amount of any net proceeds actually received by such selling holder from the
sale of Registrable Securities which gave rise to such indemnification
obligation.
4.3 Conduct of Indemnification Proceedings. Promptly after receipt by
any person of any notice of any loss, claim, damage or liability or any action
in respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such
person (the "Indemnified Party") shall, if a claim in respect thereof is to be
made against any other person for indemnification hereunder, notify such other
person (the "Indemnifying Party") in writing of the loss, claim, judgment,
damage, liability or action; provided, however, that the failure by the
Indemnified Party to notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability which the Indemnifying Party may have to
such Indemnified Party hereunder, except and solely to the extent the
Indemnifying Party is actually prejudiced by such failure. If the Indemnified
Party is seeking indemnification with respect to any claim or action brought
against the Indemnified Party, then the Indemnifying Party shall be entitled to
participate in such claim or action, and, to the extent that it wishes, jointly
with all other Indemnifying Parties, to assume control of the defense thereof
with counsel satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume control of
the defense of such claim or action, the Indemnifying Party shall not be liable
to the Indemnified Party for any legal or other expenses subsequently incurred
by the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that in any action in
which both the Indemnified Party and the Indemnifying Party are named as
defendants, the Indemnified Party shall have the right to employ separate
counsel (but no more than one such separate counsel) to represent the
Indemnified Party and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees and expenses of
such counsel to be paid by such Indemnifying Party if, based upon the written
opinion of counsel of such Indemnified Party, representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, consent to entry of judgment or effect any
settlement of any claim or pending or threatened proceeding in respect of which
the Indemnified Party is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Party, unless such judgment or
settlement includes an unconditional release of such Indemnified Party from all
liability arising out of such claim or proceeding.
13
4.4 Contribution.
4.4.1. If the indemnification provided for in the foregoing
Sections 4.1, 4.2 and 4.3 is unavailable to any Indemnified Party in respect of
any loss, claim, damage, liability or action referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, claim, damage, liability or action in such proportion as is
appropriate to reflect the relative fault of the Indemnified Parties and the
Indemnifying Parties in connection with the actions or omissions which resulted
in such loss, claim, damage, liability or action, as well as any other relevant
equitable considerations. The relative fault of any Indemnified Party and any
Indemnifying Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such Indemnified Party or such Indemnifying Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
4.4.2. The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 4.4 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding Section
4.4.1. The amount paid or payable by an Indemnified Party as a result of any
loss, claim, damage, liability or action referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, no holder of Registrable
Securities shall be required to contribute any amount in excess of the dollar
amount of the net proceeds (after payment of any underwriting fees, discounts,
commissions or taxes) actually received by such holder from the sale of
Registrable Securities which gave rise to such contribution obligation. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
5. UNDERWRITING AND DISTRIBUTION.
5.1 Rule 144. The Company covenants that it shall file any reports
required to be filed by it under the Securities Act and the Exchange Act and
shall take such further action as the holders of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
holders to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144 under the
Securities Act, as such Rules may be amended from time to time, or any similar
Rule or regulation hereafter adopted by the Commission.
6. MISCELLANEOUS.
6.1 Assignment; No Third Party Beneficiaries. This Agreement and the
rights, duties and obligations of the Company hereunder may not be assigned or
delegated by the Company in whole or in part. This Agreement and the rights,
duties and obligations of the holders of Registrable Securities hereunder may be
freely assigned or delegated by such holder of
14
Registrable Securities in conjunction with and to the extent of any transfer of
Registrable Securities by any such holder. This Agreement and the provisions
hereof shall be binding upon and shall inure to the benefit of each of the
parties and their respective successors and the permitted assigns of the
Investor or holder of Registrable Securities or of any assignee of the Investor
or holder of Registrable Securities. This Agreement is not intended to confer
any rights or benefits on any persons that are not party hereto other than as
expressly set forth in Article 4 and this Section 6.1.
6.2 Notices. All notices, demands, requests, consents, approvals or
other communications (collectively, "Notices") required or permitted to be given
hereunder or which are given with respect to this Agreement shall be in writing
and shall be personally served, delivered by reputable air courier service with
charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile,
addressed as set forth below, or to such other address as such party shall have
specified most recently by written notice. Notice shall be deemed given on the
date of service or transmission if personally served or transmitted by telegram,
telex or facsimile; provided, that if such service or transmission is not on a
business day or is after normal business hours, then such notice shall be deemed
given on the next business day. Notice otherwise sent as provided herein shall
be deemed given on the next business day following timely delivery of such
notice to a reputable air courier service with an order for next-day delivery.
To the Company:
Vector Intersect Security Acquisition Corp.
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, XX 00000
Attn: Xxxxx Xxxxx, Chief Executive Officer and President
with a copy to:
Loeb & Loeb LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxx, Esq.
To an Investor, to:
Their address of record on the books of the Company
with a copy to:
Xxxxx Xxxxxxx Xxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxx, Esq.
15
6.3 Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
6.4 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute one and the same instrument.
6.5 Entire Agreement. This Agreement (including all agreements entered
into pursuant hereto and all certificates and instruments delivered pursuant
hereto and thereto) constitute the entire agreement of the parties with respect
to the subject matter hereof and supersede all prior and contemporaneous
agreements, representations, understandings, negotiations and discussions
between the parties, whether oral or written.
6.6 Modifications and Amendments. This Agreement shall not be charged,
modified or amended except by a writing signed by the Company and the holdings
of at least a majority in interest of the then outstanding Registrable
Securities affected thereby.
6.7 Titles and Headings. Titles and headings of sections of this
Agreement are for convenience only and shall not affect the construction of any
provision of this Agreement.
6.8 Waivers and Extensions. Any party to this Agreement may waive any
right, breach or default which such party has the right to waive, provided that
such waiver will not be effective against the waiving party unless it is in
writing, is signed by such party, and specifically refers to this Agreement.
Waivers may be made in advance or after the right waived has arisen or the
breach or default waived has occurred. Any waiver may be conditional. No waiver
of any breach of any agreement or provision herein contained shall be deemed a
waiver of any preceding or succeeding breach thereof nor of any other agreement
or provision herein contained. No waiver or extension of time for performance of
any obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.
6.9 Remedies Cumulative. In the event that the Company fails to observe
or perform any covenant or agreement to be observed or performed under this
Agreement, the Investor or any other holder of Registrable Securities may
proceed to protect and enforce its rights by suit in equity or action at law,
whether for specific performance of any term contained in this Agreement or for
an injunction against the breach of any such term or in aid of the exercise of
any power granted in this Agreement or to enforce any other legal or equitable
right, or to take any one or more of such actions, without being required to
post a bond. None of the rights, powers or remedies conferred under this
Agreement shall be mutually exclusive, and each such right, power or remedy
shall be cumulative and in addition to any other right, power or remedy, whether
conferred by this Agreement or now or hereafter available at law, in equity, by
statute or otherwise.
16
6.10 Governing Law. This Agreement shall be governed by, interpreted
under, and construed in accordance with the internal laws of the State of New
York applicable to agreements made and to be performed within the State of New
York, without giving effect to any choice-of-law provisions thereof that would
compel the application of the substantive laws of any other jurisdiction. Each
of the parties hereby agrees that any action, proceeding or claim against it
arising out of or relating in any way to this Agreement shall be brought and
enforced in the courts of the State of New York or the United States District
Court for the Southern District of New York (each, a "New York Court"), and
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
Each of the parties hereby waives any objection to such exclusive jurisdiction
and that such courts represent an inconvenient forum. [Each of ________________
and _________________ (together, the "non-U.S. Investors") has
appointed______________ as its authorized agent (the "Authorized Agent") upon
whom process may be served in any such action arising out of or based on this
Agreement or the transactions contemplated hereby which may be instituted in any
New York Court. Such appointment shall be irrevocable. The Company and the
Non-U.S. Investors represent and warrant that the Authorized Agent has agreed to
act as such agent for services of process and agrees to take any and all action,
including the filing of any and all documents and instruments that may be
necessary to continue such appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent and written notice of such service
to the Company shall be deemed, in every respect, effective service of process
upon the respective Non-U.S. Investors.]
6.11 Waiver of Trial by Jury. Each party hereby irrevocably and
unconditionally waives the right to a trial by jury in any action, suit,
counterclaim or other proceeding (whether based on contract, tort or otherwise)
arising out of, connected with or relating to this Agreement, the transactions
contemplated hereby, or the actions of the Investor in the negotiation,
administration, performance or enforcement hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
17
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be executed and delivered by their duly authorized representatives
as of the date first written above.
VECTOR INTERSECT SECURITY
ACQUISITION CORP.
By:
_________________________________
Name:
Title:
- Signature page of the Investors immediately follows -
18
INVESTORS:
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
EXHIBIT A
---------
Number of Initial Investment Number of Private Placement
Name of Investor Shares Owned Units Owned
--------------------------- ----------------------------------------- ---------------------------------
