GLOBAL SECURE CORP. REGISTRATION RIGHTS AGREEMENT
Exhibit 4.3
This Agreement dated as of August 9, 2005 is entered into by and between Global Secure Corp.,
a Delaware corporation (the “Company”), and Sky Capital Enterprises Inc., a Delaware corporation
(the “Investor”).
Recitals
WHEREAS, the Company and the Investor have entered into an Investor Rights Agreement of even
date herewith (the “Investor Rights Agreement”); and
WHEREAS, as contemplated by such Investor Rights Agreement, the Company and the Investor
desire to provide for certain arrangements with respect to the registration of shares of capital
stock of the Company under the Securities Act (as defined below);
NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this
Agreement and in the Investor Rights Agreement, the parties hereto agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the following respective meanings:
“Affiliated Party” means, with respect to the Investor, any person or entity which,
directly or indirectly, controls, is controlled by or is under common control with the Investor,
including, without limitation, any general partner, officer or director of the Investor and any
venture capital fund now or hereafter existing which is controlled by one or more general partners
of, or shares the same management company as, the Investor.
“Commission” means the Securities and Exchange Commission, or any other federal agency
at the time administering the Securities Act.
“Common Stock” means the common stock, $0.0001 par value per share, of the Company.
“Company” has the meaning ascribed to it in the introductory paragraph hereto.
“Distribution” means the distribution by the Investor described in Section 2.1(a).
“Distribution Shares” means the shares of Common Stock described in Section 2.1(a).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor
federal statute, and the rules and regulations of the Commission issued under such Act, as they
each may, from time to time, be in effect.
1
“Indemnified Party” means a party entitled to indemnification pursuant to Section 2.6.
“Indemnifying Party” means a party obligated to provide indemnification pursuant to
Section 2.6.
“Initial Public Offering” means the initial underwritten public offering of shares of
Common Stock pursuant to an effective Registration Statement.
“IPO Effective Date” means the effective date of the Company’s Registration Statement
in connection with its Initial Public Offering.
“Other Holders” means holders of securities of the Company (other than the Investor)
who are entitled, by contract with the Company, to have securities included in a Registration
Statement.
“Prospectus” means the prospectus included in any Registration Statement, as amended
or supplemented by an amendment or prospectus supplement, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by reference in such
Prospectus.
“Registrable Shares” means (a) the 9,296,325 shares of Common Stock (and Series A
Convertible Preferred Stock convertible into Common Stock) currently held by the Investor (subject
to appropriate adjustment for stock splits, stock dividends, recapitalizations and similar events
occurring after the date of this Agreement) , (b) the shares of Common Stock issued or issuable
upon conversion or exercise of the convertible preferred stock currently held by the Investor, and
(c) any other shares of Common Stock issued in respect of such shares (because of stock splits,
stock dividends, reclassifications, recapitalizations or similar events); provided, however, that
shares of Common Stock which are Registrable Shares shall cease to be Registrable Shares (i) upon
any sale or distribution pursuant to a Registration Statement or Rule 144 under the Securities Act
or (ii) at such time, following an Initial Public Offering, as they become eligible for sale
pursuant to Rule 144(k) under the Securities Act.
“Registration Expenses” means all expenses incurred by the Company in complying with
the provisions of Section 2, including, without limitation, all registration and filing fees,
exchange listing fees, printing expenses, fees and expenses of counsel for the Company, state Blue
Sky fees and expenses, and the expense of any special audits incident to or required by any such
registration, but excluding underwriting discounts, selling commissions and the fees and expenses
of counsel for the Investor.
“Registration Statement” means a registration statement filed by the Company with the
Commission for a public offering and sale of securities of the Company (other than a registration
statement on Form S-8 or Form S-4, or their successors, or any other form for a similar limited
purpose, or any registration statement covering only securities proposed to be issued in exchange
for securities or assets of another corporation).
2
“Securities Act” means the Securities Act of 1933, as amended, or any successor
federal statute, and the rules and regulations of the Commission issued under such Act, as they
each may, from time to time, be in effect.
2. Registration Rights.
2.1 One-Time Registration of Distribution.
(a) After the closing of the Initial Public Offering, the Company shall use its best efforts
to effect the registration on Form S-1 or Form S-2 (or any successor form) of the distribution by
the Investor (the “Distribution”) of up to 2,000,000 Registrable Shares (subject to appropriate
adjustment for stock splits, stock dividends, recapitalizations and similar events occurring after
the date of this Agreement) then held by the Investor (the “Distribution Shares”) to the
stockholders of Investor.
(b) Without limiting the generality of Section 2.1(a), (i) the Company shall use its best
efforts to (i) cause a Registration Statement with respect to the Distribution to be filed with the
Securities and Exchange Commission no later than the 181st day following the IPO Effective Date and
(ii) cause such Registration Statement to become effective as expeditiously as possible thereafter.
Notwithstanding the foregoing, if on such 181st day, or at any time after such Registration
Statement has been filed but not yet declared effective, the Company is engaged or has plans to
engage in a registered public offering or is engaged in any other activity which, in the good faith
determination of the Company’s Board of Directors, would be adversely affected by the filing or
effectiveness of such Registration Statement, or if the Company’s Board of Directors determines in
good faith that the filing or effectiveness of such Registration Statement would require premature
disclosure of material information that the Company has a bona fide business purpose for preserving
as confidential or would render the Company unable to comply with requirements under the Securities
Act or Exchange Act, then the Company may at its option delay such filing or effectiveness for a
period not in excess of 120 days.
(c) The Investor agrees that the Distribution Shares shall remain subject, following the
Distribution, to the terms of any “lock-up” agreement executed by the Investor in connection with
the Initial Public Offering. The Investor agrees that the Company may, in its discretion, impose
stop-transfer instructions with respect to the Distribution Shares until the end of such lock-up
period. Notwithstanding the forgoing, this Section 2.1(c) shall not apply if the Distribution is
effectuated after the expiration of such lock-up period.
(d) The Company shall not be required to effect more than one registration pursuant to this
Section 2.1. The Company’s obligation to register the Distribution of the Distribution Shares
shall terminate upon the first anniversary of the closing of the Initial Public Offering; provided,
however, that such termination date shall be extended by the number of days, if any, by which the
Company has elected to delay the filing or effectiveness of the registration pursuant to the last
sentence of Section 2.1(b).
3
2.2 Required Registrations on Form S-3
(a) At any time after the Company becomes eligible to file a Registration Statement on Form
S-3 (or any successor form relating to secondary offerings) but not more than once in any 12-month
period, the Investor may request, in writing, that the Company effect the registration on Form S-3
(or such successor form), of Registrable Shares having an aggregate value of at least $5,000,000
(based on the public market price on the date of such request).
(b) Upon receipt of any request for registration pursuant to this Section 2.2, the Company
shall, as expeditiously as possible, use its best efforts to effect the registration under the
Securities Act of all Registrable Shares which the Company has been requested to so register.
(c) If the Investor intends to distribute the Registrable Shares covered by its request by
means of an underwriting, it shall so advise the Company as a part of its request made pursuant to
Section 2.2(a). In such event, the Investor shall enter into an underwriting agreement upon
customary terms with the underwriter or underwriters managing the offering; provided that such
underwriting agreement shall not provide for indemnification or contribution obligations on the
part of the Investor materially greater than the obligations of the Investor pursuant to Section
2.6. The selection of the managing underwriter for any underwritten offering requested pursuant to
Section 2.2(a) shall be made by the Company, subject to the approval of the Investor, which
approval will not be unreasonably withheld, conditioned or delayed. If the Company desires that
any officers or directors of the Company holding securities of the Company be included in any
registration for an underwritten offering requested pursuant to Section 2.2(a) or if Other Holders
request such inclusion, the Company may include the securities of such officers, directors and
Other Holders in such registration and underwriting on the terms set forth herein applicable to the
Investor. If the managing underwriter advises the Company in writing that marketing factors
require a limitation on the number of shares to be underwritten, then (i) first the shares held by
officers or directors of the Company and by Other Holders shall be excluded from such Registration
Statement and underwriting to the extent deemed advisable by the managing underwriter, and (ii) if
a further reduction of the number of shares is required, the number of shares that may be included
in such Registration Statement and underwriting by the Investor shall be reduced accordingly. If
the managing underwriter has not limited the number of Registrable Shares or other securities to be
underwritten, the Company may include securities for its own account in such registration if the
managing underwriter so agrees and if the number of Registrable Shares which would otherwise have
been included in such registration and underwriting will not thereby be limited.
(d) The Company shall not be required to effect more than one registration pursuant to Section
2.2(a) in any 12-month period. For purposes of this Section 2.2(d), a Registration Statement shall
not be counted until such time as such Registration Statement has been declared effective by the
Commission (unless the Investor withdraws its request for such registration (other than as a result
of information concerning the business or financial condition of the Company which is made known to
the Investor after the date on which such registration was requested) and elects not to pay the
Registration Expenses therefor pursuant to Section 2.5). For purposes of this Section 2.2(d), a
Registration Statement shall not
4
be counted if, as a result of an exercise of the underwriter’s cut-back provisions, less than
50% of the total number of Registrable Shares that the Investor requested to be included in such
Registration Statement are so included, in which case, if only Registrable Shares are included in
the Registration Statement, the Company shall have the right to elect to cancel such Registration
Statement; provided that after such election by the Company, the Investor shall have the right to
direct the Company to proceed with the Registration Statement, in which event the Registration
Statement shall be counted under this Section 2.2(d).
(e) If at the time of any request to register Registrable Shares by the Investor pursuant to
this Section 2.2, the Company is engaged or has plans to engage in a registered public offering or
is engaged in any other activity which, in the good faith determination of the Company’s Board of
Directors, would be adversely affected by the requested registration, or if the Company’s Board of
Directors determines in good faith that such requested registration would require premature
disclosure of material information that the Company has a bona fide business purpose for preserving
as confidential or would render the Company unable to comply with requirements under the Securities
Act or Exchange Act, then the Company may at its option direct that such request be delayed,
provided that such right to delay a request shall not be exercised by the Company more than twice
in any 12-month period or to delay such request for a period or periods exceeding 120 days in the
aggregate in any 12-month period.
2.3 Incidental Registration.
(a) Whenever the Company proposes to file a Registration Statement (other than a Registration
Statement filed pursuant to Section 2.1 or 2.2) at any time and from time to time, it will, prior
to such filing, give written notice to the Investor of its intention to do so. Upon the written
request of the Investor given within 20 days after the Company provides such notice (which request
shall state the intended method of disposition of such Registrable Shares), the Company shall use
its best efforts to cause all Registrable Shares which the Company has been requested by the
Investor to register to be registered under the Securities Act to the extent necessary to permit
their sale or other disposition in accordance with the intended methods of distribution specified
in the request of the Investor; provided that the Company shall have the right to postpone or
withdraw any registration initiated pursuant to this Section 2.3 without obligation to the
Investor.
(b) If the registration for which the Company gives notice pursuant to Section 2.3(a) is a
registered public offering involving an underwriting, the Company shall so advise the Investor as a
part of the written notice given pursuant to Section 2.3(a). In such event, (i) the right of the
Investor to include its Registrable Shares in such registration pursuant to this Section 2.3 shall
be conditioned upon the Investor’s participation in such underwriting on the terms set forth herein
and (ii) the Investor, if it desires to include Registrable Shares in such registration, shall
enter into an underwriting agreement upon customary terms with the underwriter or underwriters
selected for the underwriting by the Company; provided that such underwriting agreement
shall not provide for indemnification or contribution obligations on the part of the Investor
materially greater than the obligations of the Investor pursuant to Section 2.6. If the Investor
disapproves of the terms of the underwriting, it may elect, subject to the terms of any
power-of-attorney and/or custody arrangements it may have entered into, by written notice to
5
the Company, to withdraw its shares from such Registration Statement and underwriting. If the
managing underwriter advises the Company in writing that marketing factors require a limitation on
the number of shares to be underwritten, then (x) first the shares held by holders of securities of
the Company other than the Investor (but not including the Company) shall be excluded from such
Registration Statement and underwriting to the extent deemed advisable by the managing underwriter,
and (y) if a further reduction of the number of shares is required, the number of shares that may
be included in such Registration Statement and underwriting by the Investor shall be reduced
accordingly.
2.4 Registration Procedures.
(a) If and whenever the Company is required by the provisions of this Agreement to use its
best efforts to effect the registration of any Registrable Shares under the Securities Act, the
Company shall:
(i) file with the Commission a Registration Statement with respect to such Registrable Shares
as expeditiously as possible and use its best efforts to cause that Registration Statement to
become effective as soon as possible;
(ii) as expeditiously as possible prepare and file with the Commission any amendments and
supplements to the Registration Statement and the prospectus included in the Registration Statement
as may be necessary to comply with the provisions of the Securities Act (including the anti-fraud
provisions thereof) and to keep the Registration Statement effective for 12 months from the
effective date or such lesser period until either (x) in the case of a registration pursuant to
Section 2.1, the Distribution of the Distributed Shares is complete or (y) in the case of a
registration pursuant to Section 2.2 or 2.3, all such Registrable Shares are sold;
(iii) as expeditiously as possible furnish to the Investor such reasonable numbers of copies
of the Prospectus, including any preliminary Prospectus, in conformity with the requirements of the
Securities Act, and such other documents as the Investor may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares or the Distribution
Shares, as the case may be;
(iv) as expeditiously as possible use its best efforts to register or qualify the Registrable
Shares or the Distribution Shares covered by the Registration Statement under the securities or
Blue Sky laws of such states as the Investor shall reasonably request, and do any and all other
acts and things that may be necessary or desirable to enable the Investor to consummate the public
sale or other disposition in such states of the Registrable Shares or the Distribution Shares, as
the case may be; provided, however, that the Company shall not be required in connection with this
paragraph (iv) to qualify as a foreign corporation or to execute a general consent to service of
process in any jurisdiction or to amend its Certificate of Incorporation or By-laws in a manner
that the Board of Directors of the Company determines is inadvisable;
6
(v) as expeditiously as possible, cause all such Registrable Shares or Distribution Shares to
be listed on each securities exchange or automated quotation system on which similar securities
issued by the Company are then listed;
(vi) promptly provide a transfer agent and registrar for all such Registrable Shares or
Distribution Shares, as the case may be, not later than the effective date of such Registration
Statement;
(vii) promptly make available for inspection by the Investor, any managing underwriter
participating in any disposition pursuant to such Registration Statement, and any attorney or
accountant or other agent retained by any such underwriter or selected by the Investor, all
financial and other records, pertinent corporate documents and properties of the Company and cause
the Company’s officers, directors, employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection
with such Registration Statement;
(viii) notify the Investor, promptly after it shall receive notice thereof, of the time when
such Registration Statement has become effective or a supplement to any Prospectus forming a part
of such Registration Statement has been filed; and
(ix) as expeditiously as possible following the effectiveness of such Registration Statement,
notify the Investor of any request by the Commission for the amending or supplementing of such
Registration Statement or Prospectus.
(b) If the Company has delivered a Prospectus to the Investor and after having done so the
Prospectus is amended to comply with the requirements of the Securities Act, the Company shall
promptly notify the Investor and, if requested, the Investor shall immediately cease making offers
of Registrable Shares or distributing the Distribution Shares and shall return all Prospectuses to
the Company. The Company shall promptly provide the Investor with revised Prospectuses and,
following receipt of the revised Prospectuses, the Investor shall be free to resume making offers
of the Registrable Shares and distributing the Distribution Shares.
(c) In the event that, in the judgment of the Company, it is advisable to suspend use of a
Prospectus included in a Registration Statement filed pursuant to Section 2.2 or 2.3 due to pending
material developments or other events that have not yet been publicly disclosed and as to which the
Company believes public disclosure would be detrimental to the Company, the Company shall notify
the Investor to such effect, and, upon receipt of such notice, the Investor shall immediately
discontinue any sales of Registrable Shares pursuant to such Registration Statement until the
Investor has received copies of a supplemented or amended Prospectus or until the Investor is
advised in writing by the Company that the then current Prospectus may be used and has received
copies of any additional or supplemental filings that are incorporated or deemed incorporated by
reference in such Prospectus. Notwithstanding anything to the contrary herein, the Company shall
not exercise its rights under this Section 2.4(c) to suspend sales of Registrable Shares more than
twice in any 12-month period or to suspend sales for a period or periods exceeding 120 days in the
aggregate in any 12-month period.
7
2.5 Allocation of Expenses. The Investor will pay one-half of all Registration
Expenses for the registration contemplated by Section 2.1; provided, however, that
if such Registration Expenses total less than $100,000, then the Investor will pay Registration
Expenses in an amount equal to the lesser of $50,000 or the actual amount of the Registration
Expenses. The Company will pay all Registration Expenses for all other registrations under this
Agreement; provided, however, that if a registration under Section 2.2 is withdrawn
at the request of the Investor (other than as a result of material adverse information concerning
the business or financial condition of the Company which is made known to the Investor after the
date on which such registration was requested and was not known by the Investor at the time of such
request) and if the Investor elects not to have such registration counted as a registration
requested under Section 2.2, the Investor shall pay the Registration Expenses of such registration.
2.6 Indemnification and Contribution.
(a) In the event of any registration of any of the Registrable Shares or the Distribution
Shares under the Securities Act pursuant to this Agreement, the Company will indemnify and hold
harmless the Investor, each underwriter of Registrable Shares, and each other person, if any, who
controls the Investor or such underwriter within the meaning of the Securities Act or the Exchange
Act against any losses, claims, damages or liabilities, joint or several, to which the Investor, or
such underwriter or controlling person may become subject under the Securities Act, the Exchange
Act, state securities or Blue Sky laws or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained in any Registration Statement under
which such Registrable Shares or Distribution Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration Statement, or any
amendment or supplement to such Registration Statement, (ii) the omission or alleged omission to
state a material fact required to be stated therein or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law in connection with the Registration Statement or
the offering or distribution contemplated thereby; and the Company will reimburse the Investor, any
such underwriter and each such controlling person for any legal or any other expenses reasonably
incurred by the Investor or such underwriter or controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action; provided, however,
that with respect to each of the foregoing the Company will not be liable to the extent that any
such loss, claim, damage or liability arises out of or is based upon any untrue statement or
omission made in such Registration Statement, preliminary prospectus or prospectus, or any such
amendment or supplement, in reliance upon and in conformity with information furnished to the
Company, in writing, by or on behalf of the Investor or any such underwriter or controlling person
specifically for use in the preparation thereof.
(b) In the event of any registration of any of the Registrable Shares or the Distribution
Shares under the Securities Act pursuant to this Agreement, the Investor will indemnify and hold
harmless the Company, each of its directors and officers and each underwriter (if any) and each
person, if any, who controls the Company or any such underwriter within the meaning of the
Securities Act or the Exchange Act, against any losses, claims,
8
damages or liabilities, joint or several, to which the Company, such directors and officers,
underwriter or controlling person may become subject under the Securities Act, Exchange Act, state
securities or Blue Sky laws or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement under which such
Registrable Shares or Distribution Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or (ii) any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading, if and to the extent (and only to the extent) that the statement or omission was made
in reliance upon and in conformity with information relating to the Investor furnished in writing
to the Company by the Investor specifically for use in connection with the preparation of such
Registration Statement, prospectus, amendment or supplement; provided, however,
that the obligations of the Investor hereunder in connection with the sale of Registrable Shares
under a Registration Statement shall be limited to an amount equal to the net proceeds to the
Investor of the Registrable Shares sold in connection with such registration.
(c) Each Indemnified Party shall give notice to 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, however, 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 be unreasonably withheld, conditioned or delayed); and, provided,
further, that the failure of any Indemnified Party to give notice as provided herein shall
not relieve the Indemnifying Party of its obligations under this Section 2.6 except to the extent
that the Indemnifying Party is materially and adversely prejudiced by such failure. The Indemnified
Party may participate in such defense at such party’s expense; provided, however,
that the Indemnifying Party shall pay such expense if the Indemnified Party reasonably concludes
that representation of such Indemnified Party by the counsel retained by the Indemnifying Party
would be inappropriate due to actual or potential differing interests between the Indemnified Party
and any other party represented by such counsel in such proceeding; provided
further that in no event shall the Indemnifying Party be required to pay the expenses of
more than one law firm per jurisdiction as counsel for the Indemnified Party. The Indemnifying
Party also shall be responsible for the expenses of such defense if the Indemnifying Party does not
elect to assume such defense. 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, and no Indemnified Party shall consent to entry of any
judgment or settle such claim or litigation without the prior written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld, conditioned or delayed.
(d) In order to provide for just and equitable contribution in circumstances in which the
indemnification provided for in this Section 2.6 is due in accordance with its terms but for any
reason is held to be unavailable to an Indemnified Party in respect to any losses, claims, damages
and liabilities referred to herein, then the Indemnifying Party shall, in lieu of indemnifying such
Indemnified Party, contribute to the amount paid or payable by such
9
Indemnified Party as a result of such losses, claims, damages or liabilities to which such
party may be subject in such proportion as is appropriate to reflect the relative fault of the
Company on the one hand and the Investor on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company and the Investor shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of
material fact related to information supplied by the Company or the Investor and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Investor agree that it would not be just and equitable
if contribution pursuant to this Section 2.6(d) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this Section 2.6(d), in connection with the sale of
Registrable Shares pursuant to a Registration Statement, in no case shall the Investor be liable or
responsible for any amount in excess of the net proceeds received by the Investor from the offering
of Registrable Shares; provided, however, that 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. Any party
entitled to contribution will, promptly after receipt of notice of commencement of any action, suit
or proceeding against such party in respect of which a claim for contribution may be made against
another party or parties under this Section 2.6(d), notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve such party from any other obligation it or they may
have thereunder or otherwise under this Section 2.6(d). No party shall be liable for contribution
with respect to any action, suit, proceeding or claim settled without its prior written consent,
which consent shall not be unreasonably withheld, conditioned or delayed.
(e) The rights and obligations of the Company and the Investor under this Section 2.6 shall
survive the termination of this Agreement.
2.7 Other Matters with Respect to Underwritten Offerings. In the event that
Registrable Shares are sold pursuant to a Registration Statement in an underwritten offering
pursuant to Section 2.2 or 2.3, the Company agrees to (a) enter into an underwriting agreement
containing customary representations and warranties with respect to the business and operations of
the Company and customary covenants and agreements to be performed by the Company, including
without limitation customary provisions with respect to indemnification by the Company of the
underwriters of such offering; (b) use its best efforts to cause its legal counsel to render
customary opinions to the underwriters with respect to the Registration Statement; and (c) use its
best efforts to cause its independent public accounting firm to issue customary “cold comfort
letters” to the underwriters with respect to the Registration Statement.
2.8 Information by Investor. The Investor shall furnish to the Company such
information regarding the Investor and the plan of distribution proposed by the Investor as the
Company may reasonably request and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement. Such information provided by the
Investor shall not contain any untrue statement of a material fact or omit any material fact
required to be stated in the related registration statement or necessary to make the statements
therein with respect to the Investor not misleading.
10
2.9 Confidentiality of Notices. In the event the Investor receives any written
notice from the Company regarding the Company’s plans to file a Registration Statement, the
Investor shall treat such notice confidentially and shall not disclose such information to any
person other than as necessary to exercise its rights under this Agreement.
2.10 Rule 144 Requirements. After the earliest of (i) the closing of the sale of
securities of the Company pursuant to a Registration Statement, (ii) the registration by the
Company of a class of securities under Section 12 of the Exchange Act, or (iii) the issuance by the
Company of an offering circular pursuant to Regulation A under the Securities Act, the Company
agrees to:
(a) make and keep current public information about the Company available, as those terms are
understood and defined in Rule 144; and
(b) use its best efforts to 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 (at any time after
it has become subject to such reporting requirements).
2.11 Termination. All of the Company’s obligations to register Registrable Shares
under Sections 2.2 and 2.3 shall terminate upon the earliest of (a) five years after the closing of
the Initial Public Offering or (b) the date on which the Investor holds no Registrable Shares.
3. Transfers of Rights. This Agreement, and the rights and obligations of the
Investor hereunder, may be assigned by the Investor only (a) in connection with an acquisition of
all or substantially all the assets of the Investor, or (b) to any Affiliated Party of the
Investor; provided, however, that with respect to an assignment described in clause (b) above, such
assignment shall only be effective so long as the assignee is an Affiliated Party of the Investor
or an Affiliated Party of any successor to all or substantially all of the assets and business of
the Investor, including a successor by way of merger or other similarly structured transaction.
Each such assignment of rights shall be contingent upon the transferee providing a written
instrument to the Company notifying the Company of such transfer and assignment and agreeing in
writing to be bound by the terms of this Agreement.
4. General.
4.1 Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
4.2 Specific Performance. In addition to any and all other remedies that may be
available at law in the event of any breach of this Agreement, the Investor shall be entitled to
specific performance of the agreements and obligations of the Company hereunder and to such other
injunctive or other equitable relief as may be granted by a court of competent jurisdiction.
4.3 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
11
4.4 Notices. All notices, requests, consents and other communications under this
Agreement shall be in writing and shall be deemed delivered (i) three business days after being
sent by registered or certified mail, return receipt requested, postage prepaid or (ii) one
business day after being sent via a reputable nationwide overnight courier service guaranteeing
next business day delivery, in each case to the intended recipient as set forth below:
If to the Company, at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
General Counsel, or at such other address as may have been furnished in writing by the
Company to the Investor; or
If to the Investor, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or at such other address as may have been furnished in writing
by the Investor to the other parties hereto, with a copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Any party may give any notice, request, consent or other communication under this Agreement
using any other means (including, without limitation, personal delivery, messenger service,
telecopy, first class mail or electronic mail), but no such notice, request, consent or other
communication shall be deemed to have been duly given unless and until it is actually received by
the party for whom it is intended. Any party may change the address to which notices, requests,
consents or other communications hereunder are to be delivered by giving the other parties notice
in the manner set forth in this Section 4.4.
4.5 Complete Agreement. This Agreement, together with the Investor Rights Agreement,
constitutes the entire agreement and understanding of the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings relating to such
subject matter.
4.6 Amendments and Waivers. This Agreement may be amended or terminated and the
observance of any term of this Agreement may be waived with the written consent of the Company and
the Investor. No waivers of or exceptions to any term, condition or provision of this Agreement,
in any one or more instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.
4.7 Pronouns. Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns
and pronouns shall include the plural, and vice versa.
4.8 Counterparts; Facsimile Signatures. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of which together shall
constitute one and the same document. This Agreement may be executed by facsimile signatures.
4.9 Section Headings and References. The section headings are for the convenience of
the parties and in no way alter, modify, amend, limit or restrict the contractual obligations of
the parties. Any reference in this agreement to a particular section or subsection shall refer to
a section or subsection of this Agreement, unless specified otherwise.
12
Executed as of the date first written above.
| GLOBAL SECURE CORP. | ||||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
| Print Name: | ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
| Print Title: | President and CEO | |||||
|
|
||||||
| SKY CAPITAL ENTERPRISES INC. | ||||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||||
| Print Name: | ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||||
| Print Title: | President and CEO | |||||
13