REGISTRATION RIGHTS AGREEMENT
Exhibit
10.2
THIS
REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is entered into as of August 25,
2008, by and among New Century Equity Holdings Corp., a Delaware corporation
(including any successor thereto, the “Company”) and Xxxxxx Xxxx (“Xxxx”), Lorex
Investments AG (“Lorex”), Xxxx Xxxxxxxx (“Xxxxxxxx”) and the Xxxxxxxx Family
Investments, L.P. (the “Xxxxxxxx X.X.”) (each of Xxxx, Lorex, Xxxxxxxx and the
Xxxxxxxx X.X., a “Selling Shareholder” and, collectively, the “Selling
Shareholders”) and Xxxx Xxxxxxxxx (“Xxxx Xxxxxxxxx”).
R E C I T
A L S:
WHEREAS,
concurrently with the execution and delivery of this Agreement, the Selling
Shareholders, together with the Company, Xxxxxxxxxx International, Ltd.
(“Xxxxxxxxxx International”) and certain entities affiliated with Xxxxxxxxxx
International, are entering into an Agreement (the “Purchase Agreement”), which
Purchase Agreement provides, among other things, for the sale of the outstanding
equity interests of certain Xxxxxxxxxx International affiliated entities to New
Century;
WHEREAS,
pursuant to the terms of the Purchase Agreement, upon the Closing the Selling
Shareholders will be beneficial owners of shares of common stock, par value $.01
per share, of the Company (the “Common Stock”, and shares of Common Stock issued
to Selling Stockholders under the Purchase Agreement, the “Seller NCEH
Shares”);
WHEREAS,
as a condition to their willingness to enter into the Purchase Agreement, the
Selling Shareholders have required that certain matters be agreed and set forth
herein; and
WHEREAS,
this Agreement shall become effective upon, and only upon, the effectiveness of
the Closing under the Purchase Agreement.
NOW,
THEREFORE, in consideration of the foregoing and of the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, hereby agree as follows:
Article
1
DEFINITIONS
Capitalized
terms used but not defined herein shall have the respective meanings given to
them in the Purchase Agreement.
As used
herein, the following terms shall have the following respective
meanings:
1.1 “Commission”
shall mean the U.S. Securities and Exchange Commission or any other successor
federal agency at the time administering the Securities Act.
1.2 “Common
Stock” shall have the meaning set forth in the Recitals.
1.3 “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar
federal statute and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
1.4 “Holders”
shall mean and include a Selling Shareholder and any Affiliated permitted
transferee thereof who holds Registrable Securities of record.
1.5 “Priority
Securities” shall mean (1) Registrable Securities and (2) shares of Common Stock
or other securities subject to contractual registration rights (other than
pursuant to this Agreement) of stockholders of the Company similar to the rights
of the Selling Shareholders.
1.6 “Register,”
“registered” and “registration” refer to a registration effected by preparing
and filing with the Commission a registration statement in compliance with the
Securities Act, and the declaration or ordering by the Commission of the
effectiveness of such registration statement.
1.7 “Registrable
Securities” means any and all shares of Common Stock (i) that were issued
to the Selling Shareholders or Xxxxxxxxx in connection with the
Closing and (ii) issued or issuable with respect to the Common Stock referred to
in clause (i) above upon any stock split, stock dividend, recapitalization,
reclassification, exchange, merger or other similar event; provided that
Registrable Securities shall exclude any and all Seller Restricted Shares (as
defined in the Purchase Agreement) until such time as such shares shall have
been released to the relevant Selling Shareholder without restriction pursuant
to the terms of the Escrow Agreement. The term “Registrable
Securities” shall also exclude in all cases, however, such shares of Common
Stock (i) following their sale by a Holder to the public pursuant to a
registered offering or pursuant to Rule 144 or (ii) sold in a private
transaction in which the Holder’s registration rights under this Agreement are
not assigned.
1.8 “Registration
Expenses” shall mean all reasonable and customary expenses incurred by the
Company in complying with Articles 2, 3 and 5 hereof, including, without
limitation, all registration, qualification and Commission, National Association
of Securities Dealers, Inc., stock exchange and other filing fees, printing
expenses, duplication expenses relating to copies of any registration statement
or prospectus delivered to any Holders, escrow fees, fees and disbursements of
legal counsel for the Company, fees and disbursements of the Company’s
accountants and blue sky fees and expenses. Registration Expenses
shall be distinct from Selling Expenses.
1.9 “Rule
144” shall mean Rule 144 under the Securities Act or any other successor rule or
regulation then in effect.
1.10 “Securities
Act” shall mean the Securities Act of 1933, as amended, or any successor federal
statute and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
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1.11 “Selling
Expenses” shall mean all underwriting, selling broker or dealer manager fees,
discounts and selling commissions applicable to the Registrable Securities
registered on behalf of the Holders.
Article
2
REQUIRED
REGISTRATION
2.1 Request
for Registration.
(a) At
any time following the one year anniversary of the Closing Date, Xxxx or
Xxxxxxxx may make a written request to the Company to file a registration
statement under the Securities Act covering all or part of the Registrable
Securities then held by such Selling Shareholder and his respective
Affiliates. No later than 30 days following its receipt of such
written request (the “Demand Registration Filing Date”), the Company will
prepare and file with the Commission a registration statement under the
Securities Act covering all of the Registrable Securities requested to be
included therein, and the Company will use its commercially reasonable efforts
to obtain the effectiveness of such registration as soon as practicable as would
permit or facilitate the resale and distribution of all securities requested to
be registered. If, however, the Company shall furnish to the
requesting Selling Shareholder a certificate signed by the Chief Executive
Officer (or the Chairman of the Board of Directors) of the Company prior to the
Demand Registration Filing Date stating that, in the good faith judgment of the
Board of Directors of the Company, it would be seriously detrimental to the
Company and its shareholders (and/or such applicable transaction) for such
registration statement to be filed by reason of a material pending transaction
(including a financing transaction, whether a primary or resale distribution) or
the Company has determined in good faith, after consultation with outside
counsel, that the filing of a registration request would require the disclosure
of material information which the Company has a bona fide business purpose for
preserving as confidential, then the Company shall have the right to defer such
filing for a period of not more than 90 days after the Demand Registration
Filing Date. Such registration statement shall contain (unless the
requesting Selling Shareholder hereunder otherwise directs) substantially the
“Plan of Distribution” attached hereto as Annex A. Subject to the
provisions of Section 2.1(b), the requesting Selling Shareholder may revoke any
registration request made pursuant to this Section 2.1(a) and/or withdraw
securities from an applicable registration.
(b) Notwithstanding
anything to the contrary:
(i) a
registration shall be deemed to have been effected (and demand right therefore
exercised pursuant to Section 2.1(a)) if the applicable registration has become
effective, unless it results in a (A) Limited Registration (as defined in
Section 2.2(c)) or (B) a Failed Registration (as defined
below);
(ii)
the Company shall be obligated to effect only one (1) registration pursuant to
Section 2.1(a) requested by Xxxxxxxx and only (1) registration pursuant to
Section 2.1(a) requested by Xxxx; provided that if any registration is commenced
pursuant to this Section 2.1 and is not consummated due to the revocation of the
initial request by Xxxxxxxx or Xxxx, as applicable, at least ten (10) business
days prior to the anticipated effective date of the relevant registration (such
revocation of a registration request not to occur more than one time in the case
of each of Xxxxxxxx and Xxxx) (a “Failed Registration”), such Failed
Registration shall not be deemed to constitute a registration under this Section
2.1 and the relevant requesting Selling Shareholder shall retain his one (1)
demand right pursuant to this Section 2.1 (it being understood that, subject to
Section 2.1(b)(i), a demand right shall have been deemed exercised in the event
of any other revocation of registration request under this Section 2.1);
and
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(iii) without
limiting the provisions of clauses (i) and (ii), the Company shall be obligated
to effect only one (1) registration pursuant to this Section 2.1 (whether
requested by Xxxx or Xxxxxxxx) in any nine (9) month period (i.e., the Company
shall have no obligation to file a registration statement at the request of a
Selling Shareholder until nine (9) months have elapsed following the
effectiveness of any prior registration of the Company).
2.2 Underwriting.
(a) The
resale distribution of the Registrable Securities covered by the registration
statements referred to in Section 2.1 above shall be effected by means of the
method of distribution reasonably selected by the shareholder participants
holding a majority in interest of the Priority Securities that have been
properly elected to be included in the relevant registration (the “Majority in
Interest”). Subject to the foregoing, the Majority in Interest may
also change the resale distribution method from time to time (subject to
amendment of the registration statement at the expense of the relevant
shareholder participants as required to describe such changes). If
such distribution is effected by means of an underwriting, the right of any
Holder to registration pursuant to this Article 2 shall be conditioned upon such
Holder’s participation in such underwriting and the inclusion of such Holder’s
Registrable Securities in the underwriting to the extent provided
herein. Notwithstanding anything to the contrary, no registration
requested pursuant to Section 2.1 shall be effected by means of an underwriting
unless the anticipated gross proceeds from such underwritten transaction exceed
$12,500,000 (twelve million five hundred thousand dollars).
(b) If
such distribution is effected by means of an underwriting, the Company (together
with Xxxx and/or Xxxxxxxx, as applicable, and their respective Affiliates, if
either is proposing to distribute securities held by him or his Affiliates
through such underwriting) shall enter into an underwriting agreement in
customary form with a managing underwriter of regional or national recognized
standing selected for such underwriting by a Majority in Interest and approved
by the Company (such consent not to be unreasonably withheld); provided,
however, that the liability of each Holder thereunder shall in no event exceed
an amount equal to the net proceeds from the offering received by such Holder
and his Affiliates.
(c) Notwithstanding
any other provision of this Article 2, if the managing underwriter determines
that marketing factors require a limitation of the number of shares to be
underwritten, the Company shall so advise all Holders of Registrable Securities,
and the number of shares of securities to be included in the underwriting shall
be allocated (i) first, among the holders of Priority Securities, pro rata
according to the number of Priority Securities that have been properly elected
to be included in the relevant registration , and (ii) second, in the event that
the number of shares that the managing underwriter believes may be underwritten
has not been reached pursuant to (i), pro rata according to the number of other
securities offered to be included in such underwriting. Subject to
the foregoing, primary shares may be included in any registration requested
pursuant to Section 2.1.
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(d)
In the event that, as a result of the “cutback” provisions of Section 2.2(c), a
Selling Shareholder making a “demand” request pursuant to Section 2.1 is unable
to register more than sixty six and two-thirds percent (66 2/3%) of the
Registrable Securities which such Selling Shareholder has properly requested to
be registered pursuant to such demand in accordance with the provisions of this
Agreement (such limited registration, a “Limited Registration”), then the
requesting Holder shall not be deemed to have made such “demand” request and,
notwithstanding the effectiveness of the applicable registration, shall preserve
its one “demand” right for later use for purposes of Section 2.1, subject in all
cases to the provisions of this Agreement.
(e) For
the avoidance of doubt, Holders holding vested options or restricted shares of
Common Stock (including any Seller Restricted Shares) may not include such
securities in any demand registration under this Article 2 (and shall not
exercise demand rights with respect thereto or request their inclusion effective
as of a later date) until such time as the underlying shares of Common Stock are
held directly and without restriction.
Article
3
COMPANY
REGISTRATION
3.1 Notice
of Registration to Selling Shareholders. If at any time or from time
to time from and after the date hereof and ending on the eighth anniversary of
the date hereof, the Company shall determine to register any of its securities,
either for its own account or the account of any security holder or holders,
other than (i) a registration relating solely to employee benefit plans on Form
S-8 (or any successor form) or relating to a dividend reinvestment plan, stock
option plan or other compensation plan, (ii) a registration on Form S-4 (or any
successor form) or other registration in connection with mergers, acquisitions,
exchange offers or similar transactions, (iii) a registration on any form that
does not permit secondary sales or (iv) a registration relating solely to
a subscription offering or a rights offering, the Company
will:
(a) promptly
give to Xxxx and Xxxxxxxx written notice thereof; and
(b) include
in such registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all of the Registrable
Securities specified in a written request, made within 15 days after receipt of
such written notice from the Company described in Section 3.1(a), by Xxxx
and Xxxxxxxx (on their own behalf and on behalf of their respective
Affiliates), but only to the extent that the original issuance or resale
distribution of such Registrable Securities is not already covered by an
effective registration statement under Article 2 above.
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3.2 Underwriting.
(a) If
the registration of which the Company gives notice is for an offering involving
an underwriting, the Company shall so advise the Selling Shareholders as part of
the written notice given pursuant to Section 3.1(a). In such event,
the right of the Selling Shareholders to registration pursuant to this Article 3
shall be conditioned upon a Selling Shareholder’s participation in such
underwriting and the inclusion of such Selling Shareholder’s Registrable
Securities in the underwriting to the extent provided herein. Xxxx
and Xxxxxxxx, as applicable, together with any participating Affiliates (and
together with the Company), shall enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting
solely by the Company; provided, however, that the liability of a Selling
Shareholder thereunder shall in no event exceed the lesser of (i) the Selling
Shareholder’s pro-rata portion of the liability based on the Selling
Shareholder’s shares sold in the offering as compared to the total number of
shares sold in the offering, and (ii) an amount equal to the net proceeds from
the offering received by such Selling Shareholder and his
Affiliates.
(b) Notwithstanding
any other provision of this Article 3, if the managing underwriter determines
that marketing factors require a limitation of the number of shares to be
underwritten, the Company shall so advise the Selling Shareholders, and the
number of shares of Common Stock to be included in such registration shall be
allocated as follows: (i) first, for the account of the Company, all
shares of Common Stock proposed to be sold by the Company; and (ii) second, for
the account of any Selling Shareholders and any other shareholders of the
Company participating in such registration who have contractual rights to be
included in such registration similar to the rights of the Selling Shareholders,
the number of shares of Common Stock requested to be included in the
registration by such Selling Shareholders and such other shareholders in
proportion, as nearly as practicable, to the respective number of shares that
are proposed to be offered and sold by the Selling Shareholders and such other
shareholders at the time of filing the registration statement; provided that, if
the Company is effecting a registration pursuant to a demand request of a
shareholder other than a Selling Shareholder, clause (i) of this subsection
shall be deemed to cover the shares of Common Stock proposed to be sold by such
other shareholder and clause (ii) of this subsection shall include, on a basis
pari passu with any shareholders who have contractual rights to be included in
such registration similar to the rights of the Selling Shareholders, any shares
proposed to be sold by the Company. No Registrable Securities
or other shares of Common Stock excluded from the underwriting in this Article 3
by reason of the underwriters’ marketing limitation shall be included in such
registration.
(c) If
a participating Selling Shareholder disapproves of the terms of any underwriting
under this Article 3, such Selling Shareholder exercising rights pursuant to
this Article 3 may elect to withdraw therefrom by written notice to the Company
and the managing underwriter. Any securities excluded or withdrawn
from such underwriting shall be withdrawn from such registration; provided that
the Company may determine, at its election, to increase, on a pro
rata basis for the securities of shareholders then included in the registration
(giving effect to the withdrawal), the number of shares of the other
shareholders participating in the registration.
(d) The
Company shall have the right to terminate or withdraw any registration initiated
by the Company under this Article 3 prior to the effectiveness of such
registration, whether or not a Selling Shareholder has elected to include
Registrable Securities in such registration; provided that a Selling Shareholder
shall have the right to convert such registration into a demand registration
covered by Section 2.1 hereof.
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(e) For
the avoidance of doubt, Holders holding vested options or restricted shares of
Common Stock (including any Seller Restricted Shares) may not include such
securities in any piggyback registration under this Article 3 (and shall not
exercise piggyback rights with respect thereto or request their inclusion as of
a later date) until such time as the underlying shares of Common Stock are held
directly and without restriction.
(f) Xxxxxxxxx
(and Xxxxx Xxxxx, to the extent he becomes the owner of any Registrable
Securities) shall have “piggyback” rights under this Article 3 commensurate with
(and subject to the same limitations and restrictions) as the rights of the
Selling Shareholders with respect to Registrable Securities held by
Xxxxxxxxx. Xxxxxxxxx shall be deemed a “Holder” for purposes of
Article 4, 5 and 6 to the extent he participates any registration by virtue of
such rights.
Article
4
EXPENSES
OF REGISTRATION
All
Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Articles 2, 3 and 5 hereof, the
reasonable fees of one counsel for the Holders of Registrable Securities (up to
a maximum of $10,000) in the case of a registration in which a Holder
participates and any other similar out of pocket expenses incurred by any Holder
or Holders pursuant to any applicable underwriting agreement in connection with
a registration hereunder shall, in each case, be borne by the
Company. All Selling Expenses relating to Registrable Securities
registered on behalf of a Holder shall be borne by such Holder.
Article
5
REGISTRATION
PROCEDURES
(a) In
the case of each registration effected by the Company pursuant to this
Agreement, the Company will keep each Holder advised in writing as to the
initiation of each registration and as to the completion thereof. The
Company agrees to use its commercially reasonable efforts to effect or cause
such registration to permit the sale of the Registrable Securities covered
thereby by the Holders thereof in accordance with the intended method or methods
of distribution thereof described in such registration statement. In
connection with any registration of any Registrable Securities, the Company
shall:
(i) prepare
and file with the Commission a registration statement with respect to such
Registrable Securities and use its commercially reasonable efforts to cause such
registration statement to become effective;
(ii) prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus included therein as may be necessary
to effect and maintain the effectiveness of such registration statement pursuant
to the applicable rules and regulations of the Commission and the instructions
applicable to the form of such registration statement (provided, however, that
the Company shall not be obliged to maintain the effectiveness of such
registration statement longer than through the earlier of (A) six months
following the effective date of such registration statement and (B) such time as
all Registrable Securities registered thereunder have been sold pursuant to such
registration statement), and furnish to the Holders of the Registrable
Securities covered thereby copies of any such supplement or amendment prior to
its use and/or filing with the Commission;
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(iii) promptly
notify the Holders whose Registrable Securities are to be included in a
registration statement hereunder, the sales or placement agent, if any, therefor
and the managing underwriter of the securities being sold, and confirm such
advice in writing, (A) when such registration statement or the prospectus
included therein or any prospectus amendment or supplement or post-effective
amendment has been filed and, with respect to such registration statement or any
post-effective amendment, when the same has become effective, (B) of the
issuance by the Commission of any stop order suspending the effectiveness of
such registration statement or the initiation of any proceedings for that
purpose, (C) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (D) of any request by the Commission for any amendment or supplement to
a registration statement or related prospectus or related information or (E) if,
at any time when a prospectus is required to be delivered under the Securities
Act, such registration statement or prospectus, or any document incorporated by
reference in any of the foregoing, contains an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made. In the case of clause (E),
the Company shall promptly prepare a supplement or amendment to such
registration statement to correct such untrue statement or
omission;
(iv) use
its commercially reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of such registration statement or any
post-effective amendment thereto or of any order suspending or preventing the
use of any related prospectus or suspending the qualification of any Registrable
Securities included in such registration statement for sale in any jurisdiction
at the earliest practicable date;
(v) furnish
to each Holder of Registrable Securities to be included in such registration
statement hereunder, each placement or sales agent, if any, therefor and each
underwriter, if any, thereof, without charge, a conformed copy of such
registration statement and any amendment and supplement thereto (in each case
including all exhibits and documents incorporated by reference) and such number
of copies of the prospectus included in such registration statement (including
each preliminary prospectus, any summary prospectus and any free writing
prospectus), and any amendment or supplement thereto, as such Holder, agent, if
any, and underwriter, if any, may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Holder, sold by such
agent or underwritten by such underwriter and to permit such Holder, agent and
underwriter to satisfy the prospectus delivery requirements of the Securities
Act;
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(vi) use
its commercially reasonable efforts to (A) register or qualify the Registrable
Securities to be included in such registration statement under such other
securities laws or blue sky laws of such states of the United States or the
District of Columbia as may be reasonably requested by the Holders of a majority
of such Registrable Securities participating in such registration, each
placement or sales agent, if any, therefor or the managing underwriter, if any,
thereof, (B) keep such registrations or qualifications in effect and comply with
such laws at all times during the period described in Section 5(a)(ii) above,
and (C) take any and all such actions as may be reasonably necessary to enable
such Holder, agent, if any, and underwriter, if any, to consummate the
disposition in such jurisdictions of such Registrable Securities; provided,
however, that in order to fulfill the foregoing obligations under this Section
5(a)(vi), the Company shall not (unless otherwise required to do so in any
jurisdiction) be required to (1) qualify generally to do business as a foreign
company or a broker-dealer, (2) execute a general consent to service of process
or (3) subject itself to taxation;
(vii) furnish,
at the request of the Holders of a majority of such Registrable Securities
participating in such registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated as of such date, of counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders,
addressed to the underwriters, if any, and to such Holders and (ii) a letter,
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders, addressed to
the underwriters, if any, and, if permitted by applicable accounting standards,
to such Holders; and
(viii) otherwise
use its commercially reasonable efforts to comply with all applicable rules and
regulations of the Commission in connection with any registration
hereunder.
(b) The
Company may require each Holder of Registrable Securities as to which any
registration is being effected to furnish in writing to the Company such
information regarding such Holder and such Holder’s method of distribution of
such Registrable Securities as the Company may from time to time reasonably
request or as is required to be included in any registration statement filed
pursuant to the terms of this Agreement. Each such Holder agrees to
notify the Company as promptly as practicable of any inaccuracy or change in
information previously furnished by such Holder to the Company or of the
occurrence of any event as a result of which any prospectus relating to such
registration contains an untrue statement of a material fact regarding such
Holder or the distribution of such Registrable Securities or omits to state any
material fact regarding such Holder or the distribution of such Registrable
Securities required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were made,
and promptly to furnish to the Company any additional information required to
correct and update any previously furnished information or required so that such
prospectus shall not contain, with respect to such Holder or the distribution of
such Registrable Securities, an untrue statement or a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
were made.
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(c) Each
of the Holders shall comply with the provisions of the Securities Act with
respect to disposition of the Registrable Securities to be included in any
registration statement filed by the Company.
(d) Notwithstanding
anything to the contrary, in connection with any offering of securities of the
Company (including without limitation any offering contemplated by Article 2 or
Article 3 of this Agreement), each Holder agrees that if such shareholder’s
Registrable Securities are included in the applicable registration, it will
consent and agree to comply with any “hold back” restriction relating to shares
of Common Stock or any other securities of the Company then owned by such Holder
(and his controlled Affiliates), that may be reasonably requested by the
underwriter(s) or placement or other selling agent(s) of such offering, not to
exceed one hundred eighty (180) days, provided, however, that such Selling
Shareholder need not enter into any such arrangement unless each of the
Company’s principal officers and its directors and Newcastle Partners, L.P. (and
their controlled Affiliates, if any) enter into agreements that contain
substantially the same “hold back” restrictions and/or agreements (it being
understood that this proviso shall not apply if a board designee of a Selling
Shareholder refuses to enter into such arrangement). Without
limitation to the foregoing, each Holder shall, upon the request of such
underwriter(s) or agent(s), agree not to effect any public sale or distribution,
including any sale pursuant to Rule 144, of any Registrable Securities, and not
effect any such public sale or distribution of any other equity security of the
Company or of any security convertible into or exchangeable or exercisable for
any equity security of the Company (in each case, other than as part of such
underwritten public offering) during the thirty days prior to, and during the
one hundred eighty (180) day period beginning on, the effective date of such
registration statement.
Article
6
INDEMNIFICATION
6.1 The
Company will indemnify each Holder, each of its officers, directors, partners
and affiliates, such Holder’s legal counsel and independent accountants, if any,
each person controlling such Holder within the meaning of Section 15 of the
Securities Act, each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act against all
claims, losses, damages, liabilities and expenses (including reasonable attorney
fees)(or actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement or prospectus, or any amendment or
supplement thereto, or 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, or any violation by the Company of any rule or
regulation promulgated under the Securities Act or any state securities laws
applicable to the Company and relating to action or inaction by the Company in
connection with any such registration, qualification or compliance, and will
reimburse each such Holder, each of its officers, directors and partners, such
Holder’s legal counsel and independent accountants, each such underwriter and
each person who controls any such underwriter for any legal and other expenses
reasonably incurred in connection with investigating, preparing or defending any
such claim, loss, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such expense,
claim, loss, damage, liability or action arises out of or is based on any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by such
Holder expressly for use in such registration statement or prospectus, or any
amendment or supplement thereto.
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6.2 Each
Holder (and Xxxx and Xxxxxxxx, as the case may be, on behalf of his affiliated
Holders) will, if Registrable Securities held by such Holder are included in the
securities as to which such registration, qualification or compliance is being
effected, severally indemnify the Company, each of its directors, officers,
partners and Affiliates, their respective legal counsel and independent
accountants, each underwriter, if any, of the Company’s securities covered by
such a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and each
other such Holder, each of its officers, directors, partners, legal counsel and
independent accountants, if any, and each person controlling such Holder within
the meaning of Section 15 of the Securities Act, against all claims, losses,
damages, liabilities and expenses (including reasonable attorney fees) (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement or prospectus, or any amendment or
supplement thereto, or 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, and will reimburse the Company, such Holders, such
directors, officers, partners, legal counsel, independent accountants,
underwriters and control persons for any legal and other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement or
prospectus or amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Holder (or Xxxx and/or
Xxxxxxxx on behalf thereof) regarding such Holder and/or such Holder’s method of
distribution expressly for use in such registration statement or prospectus, or
any amendment or supplement thereto; provided, however, that the obligations of
each Holder (and Xxxx and/or Xxxxxxxx, as applicable, on behalf thereof)
hereunder shall be limited to an amount equal to the net proceeds to such Holder
and of Registrable Securities sold pursuant to such registration
statement.
6.3 Each
party entitled to indemnification under this Article 6 (the “Indemnified Party”)
shall give notice to the party required to provide indemnification (the
“Indemnifying Party”) promptly after such Indemnified Party has actual knowledge
of any claim as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom, provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld,
conditioned or delayed). The Indemnified Party may participate in
such defense at such party’s expense; provided, however, that the Indemnifying
Party shall bear the expense of such defense of the Indemnified Party if
representation of both parties by the same counsel would be inappropriate due to
actual or potential conflicts of interest. The failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement, unless and only to
the extent such failure is materially prejudicial to the ability of the
Indemnifying Party to defend the action. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation.
-11-
6.4 If
the indemnification provided for in Section 6.1 or 6.2 is unavailable or
insufficient to hold harmless an Indemnified Party, then each Indemnifying Party
shall contribute to the amount paid or payable by such Indemnified Party as a
result of the expenses, claims, losses, damages or liabilities (or actions or
proceedings in respect thereof) referred to in Section 6.1 or 6.2, in such
proportion as is appropriate to reflect the relative fault of the Company on the
one hand and the Holders of Registrable Securities (or Xxxx and/or Xxxxxxxx, as
applicable, on behalf of affiliated Holders) on the other hand in connection
with statements or omissions which resulted in such expenses, claims, losses,
damages or liabilities (or actions or proceedings in respect thereof), as well
as any other relevant equitable considerations. The relative fault
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 or the
Holders of Registrable Securities (or Xxxx and/or Xxxxxxxx, as applicable, on
behalf of affiliated Holders) and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The parties hereto agree that it would not be
just and equitable if contributions pursuant to this Section 6.4 were to be
determined by pro rata allocation (even if all Holders of Registrable Securities
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in the first sentence of this Section 6.4. The amount paid by an
Indemnified Party as a result of the expenses, claims, losses, damages or
liabilities (or actions or proceedings in respect thereof) referred to in the
first sentence of this Section 6.4 shall be deemed to include any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any claim, action or proceeding which is the subject
of this Section 6.4. 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. The obligations of Holders of Registrable
Securities (or Xxxx and/or Xxxxxxxx, as applicable, on behalf of affiliated
Holders) to contribute pursuant to this Section 6.4 shall be several in
proportion to the respective amount of Registrable Securities sold by them and
their Affiliates pursuant to a registration statement, and shall be limited to
an amount equal to the net proceeds to each such Holder of Registrable
Securities and his Affiliates sold pursuant to such registration
statement.
-12-
Article
7
RULE 144
REPORTING
With a
view to making available the benefits of certain rules and regulations of the
Commission that may at any time permit the sale of securities of the Company to
the public without registration, the Company agrees to use its commercially
reasonable efforts to (i) make and keep public information regarding the Company
available, as those terms are understood and defined in Rule 144, at all times
after the date hereof; and (ii) file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act, in each case until the earlier of (A) six months after such
date as all of the Registerable Securities may be resold pursuant to Rule 144 or
any other rule of similar effect or (B) such date as all of the Registerable
Securities shall have been sold by the Holders.
Article
8
TRANSFER
OF REGISTRATION RIGHTS
The
rights to cause the Company to register Registrable Securities under Sections
2.1 and 2.2 of this Agreement, together with all related rights and obligations,
may be assigned by a Holder to an Affiliate of such Holder; provided, however,
that (A) the right to cause the Company to register Registrable Securities under
Section 2.1 may only be held by one person or entity with respect to the
Registrable Securities owned by him or it, (B) the transferor shall furnish to
the Company written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned prior to such transfer and (C) such transferee shall agree
in writing to be subject to all applicable restrictions set forth in this
Agreement. In each case, such rights may only be transferred together
with the underlying Registrable Securities in a transfer permitted by the
Securities Act and applicable state securities laws. Subject to the
foregoing provision, any such permitted transferee or assignee shall be deemed a
Holder hereunder.
Article
9
MISCELLANEOUS
9.1 Governing
Law; Forum. The laws of the State of New York shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under principles of conflicts of
law. Each of the parties to this Agreement consents to submit to the
personal jurisdiction of any state or federal court sitting in the State of New
York, in any action or proceeding arising out of or relating to this Agreement,
agrees that all claims in respect of the action or proceeding may be heard and
determined in any such court, and agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court. Each of the
parties to this Agreement agrees not to assert in any action or proceeding
arising out of relating to this Agreement that the venue is improper, and waives
any defense of inconvenient forum to the maintenance of any action or proceeding
so brought and waives any bond, surety or other security that might be required
of any other party with respect thereto. Each of the parties hereto
waives any right to request a trial by jury in any litigation with respect to
this Agreement and represents that counsel has been consulted specifically as to
this waiver.
-13-
9.2 Effectiveness;
Termination.
(a) This
Agreement shall become effective upon the Closing of the transactions under the
Purchase Agreement. In no event shall this Agreement be effective, nor shall any
rights or obligations hereunder apply, prior to the Closing.
(b) This
Agreement and all rights and obligations hereunder (other than Article 6 which
shall survive) shall terminate upon the earlier of (a) eight (8) years following
the date hereof or (b) at such time as the Selling Shareholders and their
Affiliates no longer hold any Seller NCEH Shares.
9.4 Entire
Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof.
9.5 Notices.
All notices, requests, consents and other communications hereunder shall be made
in writing and shall be deemed given (i) when made if made by hand delivery,
(ii) one business day after being deposited with an overnight courier if made by
courier guaranteeing overnight delivery, (iii) on the date indicated on the
notice of receipt if made by first-class mail, return receipt requested or (iv)
on the date of confirmation of receipt of transmission by facsimile, addressed
as follows:
(a) if
to the Company, at
000
Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Facsimile:
(000) 000-0000
Attention: Chief
Financial Officer
with a
copy to:
Xxxxxx
Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
Park
Avenue Tower
00 Xxxx
00xx
Xxxxxx
Xxx Xxxx,
XX 00000
Facsimile: (000)
000-0000
Attention: Xxxxx
Xxxxxxx, Esq.
-14-
(b) if
to a Holder, to the address reflected on the records of the Company, or such
other address or addresses as shall have been furnished in writing by such party
to the Company and to the other parties to this Agreement.
9.6 Severability. The
invalidity, illegality or unenforceability of one or more of the provisions of
this Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Agreement in such jurisdiction or the
validity, legality or enforceability of this Agreement, including any such
provision, in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest extent
permitted by law.
9.7 Titles
and Subtitles. The titles of the articles, sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
9.8 Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together constitute one instrument.
9.9 Amendment
and Modification. This Agreement may be amended, modified or
supplemented in any respect only by written agreement by the Company and Holders
representing at least a majority of the Registrable Securities, voting together
as a single class; provided, that no such amendment shall unfairly discriminate
against a particular Holder relative to the other Holders. Any action
taken by the Holders, as provided in this Section 9.9, shall bind all
Holders.
-15-
IN
WITNESS WHEREOF, the undersigned have hereunto affixed their
signatures.
|
By:
|
/s/ Xxxx Xxxxxxx | |||
|
Name:
|
Xxxx Xxxxxxx | |||
|
Title:
|
Acting Chief Executive Officer | |||
|
/s/
Xxxxxx Xxxx
|
||||
|
Name:
|
Xxxxxx
Xxxx
|
|||
|
LOREX
INVESTMENTS AG
|
||||
|
By:
|
/s/ Xxxxx Xxxxx | |||
|
Name:
|
Xxxxx Xxxxx | |||
|
Title:
|
Board of Directors | |||
|
/s/
Xxxx Xxxxxxxx
|
||||
|
Name:
|
Xxxx
Xxxxxxxx
|
|||
|
XXXXXXXX
FAMILY INVESTMENTS, L.P
|
||||
|
By:
|
/s/
Xxxx Xxxxxxxx
|
|||
|
Name:
|
Xxxx
Xxxxxxxx
|
|||
|
Title:
|
General Partner | |||
|
/s/
Xxxx Xxxxxxxxx
|
||||
|
Name:
|
Xxxx
Xxxxxxxxx
|
|||
-16-
ANNEX
A
PLAN OF
DISTRIBUTION
We are
registering the shares offered by this prospectus on behalf of the selling
shareholders. The selling shareholders, which as used herein includes donees,
pledgees, transferees or other successors-in-interest selling shares of common
stock or interests in shares of common stock received after the date of this
prospectus from a selling shareholder as a gift, pledge, partnership
distribution or other transfer, may, from time to time, sell, transfer or
otherwise dispose of any or all of their shares of common stock or interests in
shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These
dispositions may be at fixed prices, at prevailing market prices at the time of
sale, at prices related to the prevailing market price, at varying prices
determined at the time of sale or at negotiated prices.
The
selling shareholders may use any one or more of the following methods when
disposing of shares or interests therein:
|
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
|
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
|
·
|
privately
negotiated transactions;
|
|
|
·
|
short
sales;
|
|
|
·
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or
otherwise;
|
|
|
·
|
broker-dealers
may agree with the selling shareholders to sell a specified number of such
shares at a stipulated price per
share;
|
|
|
·
|
a
combination of any such methods of sale;
and
|
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
The
selling shareholders may, from time to time, pledge or grant a security interest
in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock, from time to time, under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act amending the list of selling
shareholders to include the pledgee, transferee or other successors in interest
as selling shareholders under this prospectus. The selling
shareholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this
prospectus.
-17-
In
connection with the sale of our common stock or interests therein, the selling
shareholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The selling
shareholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The
selling shareholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The
aggregate proceeds to the selling shareholders from the sale of the common stock
offered by them will be the purchase price of the common stock less discounts or
commissions, if any. Each of the selling shareholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of common stock to be made directly or
through agents. We will not receive any of the proceeds from this
offering.
The
selling shareholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided that they meet the criteria and conform to the requirements of that
rule.
The
selling shareholders and any broker-dealers that act in connection with the sale
of securities might be deemed to be “underwriters” within the meaning of Section
2(11) of the Securities Act of 1933, and any commissions received by such
broker-dealers and any profit on the resale of the securities sold by them while
acting as principals might be deemed to be underwriting discounts or commissions
under the Securities Act of 1933.
To the
extent required, the shares of our common stock to be sold, the names of the
selling shareholders, the respective purchase prices and public offering prices,
the names of any agent, dealer or underwriter, and any applicable commissions or
discounts with respect to a particular offer will be set forth in an
accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this
prospectus.
In order
to comply with the securities laws of some states, if applicable, the common
stock may be sold in these jurisdictions only through registered or licensed
brokers or dealers. In addition, in some states the common stock may
not be sold unless it has been registered or qualified for sale or an exemption
from registration or qualification requirements is available and is complied
with.
-18-
We have
advised the selling shareholders that the anti-manipulation rules of Regulation
M under the Exchange Act may apply to sales of shares in the market and to the
activities of the selling shareholders and their Affiliates. In
addition, we will make copies of this prospectus (as it may be supplemented or
amended from time to time) available to the selling shareholders for the purpose
of satisfying the prospectus delivery requirements of the Securities Act of
1933. The selling shareholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain
liabilities, including liabilities arising under the Securities
Act.
We have
agreed to indemnify the Selling shareholders against liabilities, including
liabilities under the Securities Act of 1933 and state securities laws, relating
to the registration of the shares offered by this prospectus.
We have
agreed with the selling shareholders to keep the registration statement that
includes this prospectus effective until the earlier of (1) six months following
the effective date of registration statement and (2) such time as all shares of
common stock covered by this prospectus have been sold.
-19-
