Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is entered into as of
the _____ day of ________, 2007, by and among Alpha Security Group Corporation,
a Delaware corporation (the "COMPANY"), and the undersigned parties listed under
Holders on the signature page hereto (each, a "HOLDER" and collectively, the
"HOLDERS").
WHEREAS, the Holders currently hold all of the issued and outstanding
securities of the Company;
WHEREAS, the Holders and the Company desire to enter into this Agreement to
provide the Holders with certain rights relating to the registration of shares
of Common Stock held by them;
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. 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.
"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 $.0001 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.
"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.
"HOLDER" is defined in the preamble to this Agreement.
"HOLDER INDEMNIFIED PARTY" is defined in Section 4.1.
"MAXIMUM NUMBER OF SHARES" is defined in Section 2.1.4.
"NOTICES" is defined in Section 6.3.
"PIGGY-BACK REGISTRATION" is defined in Section 2.2.1.
"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 Securities Act, and the applicable rules and
regulations promulgated thereunder, (other than a registration statement on 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)
and such registration statement becoming effective.
"REGISTRABLE SECURITIES" mean the 1,580,000 shares of Common Stock owned or
held by Holders prior to the effective date of the Company's initial public
offering of its securities and any warrants, shares of capital stock or other
securities of the Company issued as a dividend or other distribution with
respect to or in exchange for or in replacement of such shares of Common Stock.
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 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).
"RELEASE DATE" means the date on which shares of Common Stock are disbursed
from escrow pursuant to Section 3 of that certain Stock Escrow Agreement dated
as of ___________, 2007 by and among the parties hereto and American Stock
Transfer & Trust Company.
"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.
"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.
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2. REGISTRATION RIGHTS.
2.1 Demand Registration.
2.1.1. Request for Registration. The Company, upon written demand (a
"DEMAND NOTICE"), given at any time and from time to time after the Release
Date, of the Holders of a majority-in-interest of the Registrable Securities
agrees to register under the Securities Act (a "DEMAND REGISTRATION") all or any
portion of their Registrable Securities. The Demand Notice shall specify the
Registrable Securities proposed to be sold and the intended method(s) of
distribution thereof. The Company will notify all Holders of Registrable
Securities of the demand, 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 that decides to include 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 required to comply with a Demand Notice if the
Company has filed a registration statement with respect to which the Holder is
entitled to piggy-back registration rights pursuant to Section 2.2 hereof and
either: (i) the Holder has elected to participate in the offering covered by
such registration statement or (ii) if such registration statement relates to an
underwritten primary offering of the securities of the Company, until the
offering covered by such registration statement has been withdrawn or until
thirty (30) days after such offering is consummated. The Company shall not be
obligated to effect more than an aggregate of two (2) Demand Registrations under
this Section 2.1.1 in respect of Registrable Securities.
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; provided
further, that the Company shall not be obligated to file a second Registration
Statement until a Registration Statement that has been filed is counted as a
Demand Registration or is terminated.
2.1.3. Underwritten Offering. If a majority-in-interest of the Holders
of Registrable Securities 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 right of any Holder to include
its Registrable Securities in such registration 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. All
Demanding Holders proposing to
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distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the Underwriter or Underwriters
selected for such underwriting by a majority-in-interest of the Holders of
Registrable Securities.
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 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, 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 by the Demanding Holders (pro rata in accordance
with the number of Registrable Securities which such Demanding Holder has
requested be included in such registration, regardless of the number of
Registrable Securities held by each Demanding Holder) 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),
the shares of Common Stock or other securities that the Company desires to sell
that can be sold without exceeding the Maximum Number of Shares; (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 Common Stock for the account of
other persons that the Company is obligated to register pursuant to written
contractual arrangements with such persons and that can be sold without
exceeding the Maximum Number of Shares; and (iv) fourth, to the extent that the
Maximum Number of Shares have not been reached under the foregoing clauses (i),
(ii), and (iii), the shares of Common Stock that other shareholders desire to
sell 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 offering, such majority-in-interest of
the Demanding Holders may 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 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 after the Release Date, when
there is not an effective registration statement covering all of the Registrable
Securities, 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
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into, equity securities, by the Company for its own account or for the account
of shareholders of the Company (or by the Company and by shareholders of the
Company pursuant to Section 2.1), other than a registration statement: (i) on
Form S-8 or S-4, (ii) for an 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 Registrable Securities as such Holders may request in writing
within five (5) 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 commercially reasonable 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 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.
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 which the
Company desires to sell, taken together with shares of Common Stock, 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, if any, as to
which registration has been requested pursuant to the written contractual
piggy-back registration rights of other shareholders of the Company, exceeds the
Maximum Number of Shares, then the Company shall include in any such
registration:
(i) If the registration is undertaken for the Company's account:
(A) first, the shares of Common Stock or other securities that the Company
desires to sell that can be sold without exceeding the Maximum Number of Shares;
(B) second, to the extent that the Maximum Number of Shares has not been reached
under the foregoing clause (A), the shares of Common Stock, if any, including
the Registrable Securities, as to which registration has been requested pursuant
to written contractual piggy-back registration rights of security Holders (pro
rata in accordance with the number of shares of Common Stock which each such
person has actually requested to be included in such registration, regardless of
the number of shares of Common Stock with respect to which such persons have the
right to request such inclusion) that can be sold without exceeding the Maximum
Number of Shares; and
(ii) If the registration is a "demand" registration undertaken at
the demand of persons other than the Holders of Registrable Securities pursuant
to written
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contractual arrangements with such persons, (A) first, the shares of Common
Stock for the account of the demanding persons that can be sold without
exceeding the Maximum Number of Shares; (B) second, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clause (A),
the shares of Common Stock or other securities that the Company desires to sell
that can be sold without exceeding the Maximum Number of Shares; and (C) third,
to the extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (A) and (B), the Registrable Securities as to which
registration has been requested under this Section 2.2 (pro rata in accordance
with the number of shares of Registrable Securities held by each such Holder);
and (D) fourth, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clauses (A), (B) and (C), the shares of Common
Stock, if any, as to which registration has been requested pursuant to written
contractual piggy-back registration rights which other shareholders desire to
sell 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 such
withdrawal, the Company shall pay all registration expenses to the extent
provided in Section 3.3.
2.2.4. Registrations on Form S-3. The Holders of Registrable
Securities may at any time and from time to time after the release date, request
in writing that the Company register the resale of any or all of such
Registrable Securities on Form S-3 or any similar short-form registration which
may be available at such time ("FORM S-3"); provided, however, that the Company
shall not be obligated to effect such request through an underwritten offering
and the Company shall not be obligated to effect such a request if the Company
has within the preceding twelve (12) month period effected two registrations on
Form S-3. 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, file and use its best
efforts to make effective 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 2.2.4: (i) if Form S-3 is not
available for such offering; or (ii) 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 $5,000,000. Registrations effected pursuant to this Section
2.2.4 shall not be counted as Demand Registrations effected pursuant to Section
2.1.
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 commercially
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reasonable 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. Subject to Section 2.2.4., 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 or a registration on Form S-3 pursuant to Section 2.2.4, 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 commercially reasonable best efforts to cause such
Registration Statement to become and remain effective for the period required by
Section 3.1.3; provided, however, that the Company shall have the right to defer
any Demand Registration for up to one hundred twenty (120) days, and any
Piggy-Back Registration for such period as may be applicable to deferment of any
demand registration to which such Piggy-Back Registration relates, and in the
event of a Piggy Back Registration, the Company has the right to terminate the
registration at its choosing, in each case if the Company shall furnish to the
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, it would not be in the best interests of the Company and its
shareholders for such Registration Statement to be effected at such time;
provided further, however, that the Company shall not have the right to exercise
the right set forth in the immediately preceding proviso more than once in any
365-day period in respect of a Demand Registration hereunder; and provided
further that the Holders shall provide at least fifteen (15) business days'
notice of the date on which they wish the Company to prepare and file a
Registration Statement with the Commission.
3.1.2. Copies. Prior to filing a Registration Statement or prospectus,
or any amendment or supplement thereto, the Company should 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 with by any stop order or injunction of the Commission or any
governmental agency or court) or such securities have been withdrawn.
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3.1.4. Notification. After the filing of a Registration Statement, the
Company shall promptly, and in no event more than five (5) 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 five (5)
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
reasonably object.
3.1.5. State Securities Laws Compliance. The Company shall use its
commercially reasonable best efforts to (i) register or qualify the Registrable
Securities covered by the Registration Statement under the securities or "blue
sky" laws of such jurisdictions in the United States in which such registration
or qualification is required and which 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 qualified under the laws of 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 for this purpose be required to
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph 3.1.5 or subject itself
to taxation in any such jurisdiction.
3.1.6. Agreements for Disposition. The Company shall enter into such
customary agreements (including, if applicable, an underwriting agreement in
customary form) and as may be required by applicable law, take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities provided, however, the Holders of the
Registrable Securities may not require the Company to accept the terms,
conditions or provisions in any such agreement which the Company determines are
adverse to
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the Company's best interests. 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 applicable, shall cover only those matters
customarily covered in offerings of similar size and with respect to companies
in the same business, and shall also be made to and for the benefit of the
Holders of Registrable Securities included in such registration statement. No
Holder of Registrable Securities included in such registration statement shall
be required to make any representations or warranties in the underwriting
agreement except, 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.
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. Holders of
Registrable Securities shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters except as they
may relate to such Holders and their intended methods of distribution. Such
Holders, however, shall agree to such covenants and indemnification and
contribution obligations for selling stockholders as are customarily contained
in the 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 securities. Each Holder shall also furnish to
the Company such information regarding itself, the Registrable Securities held
by such Holder, and the intended method of disposition of such securities as
shall be reasonably required to effect the registration of the Registrable
Securities.
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, 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 reasonably requested by any of them in connection with
their discharge of their due diligence responsibility 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, upon
request, 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 each case delivered in connection with the Registration Statement. 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, upon request, at any time that such Holder elects to use a
prospectus, an opinion of counsel to the
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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 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 commercially reasonable
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
or, if no such similar securities are then listed or designated, in a manner
satisfactory to the Holders of a majority of the Registrable Securities included
in such registration.
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 pursuant to
Section 2.2.4 hereof, upon any suspension by the Company, pursuant to a written
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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 2.2.4, 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); and (viii) the fees and expenses of any special experts retained by the
Company in connection with such
10
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 underwriter in proportion to the respective amount of shares each is selling
in such offering. The Holders of the Registrable Securities shall bear all costs
and expenses incurred by them in connection with any such registration except as
specifically provided in this Section 3.3.
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 Holder 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 a Holder
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 "HOLDER
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 Holder Indemnified
Party for any legal and any other expenses reasonably incurred by such Holder
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. If requested by any Underwriter of the
Registrable Securities, the Company shall enter into an underwriting agreement
in customary form and reasonably satisfactory to the Company provided that any
indemnification provisions included therein shall be on substantially the same
basis as that of the indemnification provided above in this Section 4.1.
11
4.2 Indemnification by Holders of Registrable Securities. Each selling
Holder or 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 other person, if any, who controls the Company or any
such underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, against any losses, claims, judgments, damages
or liabilities 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 (after payment of any underwriting
fees, discounts, commissions or taxes) actually received by such selling Holder.
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, and shall pay the fees and
expenses of such counsel unless: (i) the Indemnified Party and the Indemnifying
Party shall have mutually agreed to the retention of such counsel and (ii) the
named parties to any such proceeding (including any
12
impleaded parties) include both the Indemnified Party and the Indemnifying
Party, and 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.
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 benefits received by the Indemnified Parties
on the one hand and the Indemnifying Parties on the other from the offering. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the Indemnified Party failed to give the
notice required under Section 4.3 above, then each Indemnifying Party shall
contribute to such amount paid or payable by such Indemnified Party in such
proportion as is appropriate to reflect not only such relative benefits but also
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.
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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 Other Registration Rights. The Company represents and warrants that no
person, other than (i) a Holder of the Registrable Securities and (ii) the
subscribers for warrants exercisable for the Company's Common Stock pursuant to
that certain Subscription Agreement dated as of _______ __, 2007 by and between
the Company and such subscribers has any right to require the Company to
register any shares of the Company's capital stock for sale or to include shares
of the Company's capital stock in any registration filed by the Company for the
sale of shares of capital stock for its own account or for the account of any
other person.
6.2 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 hereunder may be freely assigned or
delegated by such Holder 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 Holder
or Holder of Registrable Securities or of any assignee of the Holder 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 6.2.
6.3 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.
14
To the Company: Alpha Security Group Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chief Executive Officer
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & Kakoyiannis, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
To a Holder, to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
c/o Alpha Security Group Corporation
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
c/o Alpha Security Group Corporation
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
c/o Alpha Security Group Corporation
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
c/o Alpha Security Group Corporation
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
c/o Alpha Security Group Corporation
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
c/o Alpha Security Group Corporation
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
c/o Alpha Security Group Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
c/o Alpha Security Group Corporation
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▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
c/o Alpha Security Group Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tukwila Group LLC
c/o Alpha Security Group Corporation
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
6.4 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.
6.5 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. Such counterparts may be delivered
between the parties by facsimile or other electronic transmission.
6.6 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.
6.7 Modifications and Amendments. No amendment, modification or termination
of this Agreement shall be binding upon any party unless executed in writing by
such party.
6.8 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.
6.9 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.
16
6.10 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 Holder 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.
6.11 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.
6.12 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 Holder in the negotiation,
administration, performance or enforcement hereof.
6.13 Notwithstanding anything to the contrary in the Agreement and
regardless of whether a registration statement is current under the Act with
respect to the shares of Common Stock held by the Holder, in no event will a
Holder of Common Stock be entitled to receive a net-cash settlement or other
consideration in lieu of unregistered shares of Common Stock.
[Signature Page Follows]
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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.
ALPHA SECURITY GROUP CORPORATION
By:
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Name:
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Title:
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HOLDERS:
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Tukwila Group LLC
By:
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Sole Manager
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