EXHIBIT 4.21
EXECUTION VERSION
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of
February 4, 2000 between ABLE TELCOM HOLDING CORP., a Florida corporation with
offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Company") and RGC International Investors, LDC (the "Investor").
W I T N E S S E T H:
WHEREAS, for the consideration set forth in the Securities Exchange
Agreement by and between the Company and the Investor, dated of even date
herewith (the "Exchange Agreement"), the Company has agreed to issue to the
Investor 500,00 shares of Common Stock and warrants exercisable for 100,000
shares of Common Stock in the form attached as EXHIBIT B to the Exchange
Agreement (the "WARRANTS");
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the Company and the Investor agree as follows:
1. CERTAIN DEFINITIONS. Capitalized terms used herein and not otherwise
defined shall have the meaning ascribed thereto in the Warrants. As used in this
Agreement, the following terms shall have the following respective meanings:
"APPROVED MARKET" shall mean the NASDAQ, New York Stock Exchange or
American Stock Exchange.
"CLOSING" shall mean the acquisition of the Warrants by the Holders.
"CLOSING DATE" shall mean February 4, 2000.
"COMMISSION" or "SEC" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
"REGISTRABLE SECURITIES" shall mean: (i) the 500,000 shares of
Common Stock issued to the Investor pursuant to the Exchange Agreement, (ii) the
Warrants Shares issued and/or issuable to each Holder or its permitted
transferees or designees upon exercise of the Warrants, or upon any stock split,
stock dividend, recapitalization or similar event with respect to such Warrant
Shares; (iii) any securities issued or issuable to each Holder upon the exercise
of any Warrants or Warrant Shares; and (iv) any other security of the Company
issued as a dividend or other distribution with respect to, or upon conversion
or exchange of or in replacement of Registrable Securities.
The terms "REGISTER", "REGISTERED" and "REGISTRATION" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and
applicable rules and regulations thereunder, and the declaration or ordering of
the effectiveness of such registration statement.
"REGISTRATION EXPENSES" shall mean all expenses to be incurred by
the Company in connection with each Holder's registration rights under this
Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, and the expense of any audited financial statements incident
to or required by any such registration (but excluding the compensation of
regular employees of the Company, which shall be paid in any event by the
Company).
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for Holders not included within "Registration
Expenses".
"HOLDER" and "HOLDERS" shall include the Investor and any transferee
of the Warrants or Warrant Shares or Registrable Securities which have not been
sold to the public to whom the registration rights conferred by this Agreement
have been transferred in compliance with this Agreement.
"REGISTRATION STATEMENT" shall have the meaning set forth in Section
2(a) herein.
"REGULATION D" shall mean Regulation D as promulgated pursuant to
the Securities Act, and as subsequently amended.
"SECURITIES ACT" or "ACT" shall mean the Securities Act of 1933, as
amended.
"WARRANT SHARES" shall mean shares of Common Stock of the Company
issued and issuable upon exercise of the Warrants.
2. REGISTRATION REQUIREMENTS. The Company shall use its best efforts to
effect the registration of the Registrable Securities (including without
limitation the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act) as would permit or facilitate the sale or distribution of all
the Registrable Securities in the manner (including manner of sale) and in all
states reasonably requested by the Holder. Such best efforts by the Company
shall include the following:
(a) The Company shall, as expeditiously as reasonably possible after
the Closing Date:
(i) But in any event within 45 days thereafter, prepare and
file a registration statement with the Commission pursuant to Rule 415 under the
Securities Act on Form S-3 under the Securities Act (or in the event that the
Company is ineligible to use such form, such other form as the Company is
eligible to use under the Securities Act) covering the Registrable Securities
("Registration Statement") which Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the
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statements therein not misleading. Such Registration Statement shall, in
addition and without limitation, register (pursuant to Rule 416 under the
Securities Act, or otherwise) such additional indeterminate number of
Registrable Securities as shall be necessary to permit the full exercise of the
Warrants to prevent dilution resulting from stock splits, stock dividends or
similar transactions or (ii) by reason of changes in the Purchase Price.
Thereafter, the Company shall use its best efforts to cause such Registration
Statement and other filings to be declared effective as soon as possible, and in
any event prior to Registration Deadline (as defined below). The number of
shares of Common Stock initially included in such Registration Statement shall
be no less than the sum of (x) 500,00 shares of Common Stock, plus (y) 150% of
the number of Warrant Shares that are then issuable upon exercise of the
Warrants, without regard to any limitation on the Investor's ability to exercise
the Warrants. The Company acknowledges that the number of shares initially
included in the Registration Statement represents a good faith estimate of the
maximum number of shares issuable upon exercise of the Warrants.
(ii) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in connection
with such Registration Statement as may be necessary to keep the Registration
Statement effective and to comply with the provisions of the Act with respect to
the disposition of all securities covered by such Registration Statement until
such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement and notify the Holders of the
filing and effectiveness of such Registration Statement and any amendments or
supplements. In the event the number of shares available under a Registration
Statement filed pursuant to this Agreement is insufficient to cover all of the
Registrable Securities issued or issuable upon and exercise of the Warrants, the
Company shall amend the Registration Statement, or file a new Registration
Statement (on the short form available therefore, if applicable), or both, so as
to cover all of the Registrable Securities, in each case, as soon as
practicable, but in any event within twenty (20) business days after the
necessity therefor arises (based on the market price of the Common Stock and
other relevant factors on which the Company reasonably elects to rely). The
Company shall use its best efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable following the
filing thereof.
(iii) Furnish to each Holder such numbers of copies of a
current prospectus conforming with the requirements of the Act, copies of the
Registration Statement, any amendment or supplement thereto and any documents
incorporated by reference therein and such other documents as such Holder may
reasonably require in order to facilitate the disposition of Registrable
Securities owned by such Holder and, in the case of the Registration Statement
referred to in Section 2(a)(i), each letter written by or on behalf of the
Company to the SEC or the staff of the SEC, and each item of correspondence from
the SEC or the staff of the SEC, in each case relating to such Registration
Statement (other than any portion of any thereof which contains information for
which the Company has sought confidential treatment). The Company will
immediately notify each Investor by facsimile of the effectiveness of the
Registration Statement or any post-effective amendment. The Company will
promptly respond to any and all comments received from the SEC, with a view
towards causing any Registration Statement or any amendment thereto to be
declared effective by the SEC as soon as practicable and shall promptly file an
acceleration request as soon as practicable following the resolution or
clearance of all SEC
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comments or, if applicable, following notification by the SEC that the
Registration Statement or any amendment thereto will not be subject to review.
(iv) (a) Register and qualify, or obtain an appropriate
exemption from registration or qualification, the securities covered by such
Registration Statement under such other securities or "Blue Sky" laws of such
jurisdictions as shall be reasonably requested by each Holder (b) prepare and
file in those jurisdictions such supplements (including post-effective
amendments) and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof, (c) take such other actions as
may be necessary to maintain such registrations and qualifications in effect at
all times, and (iv) take all other actions reasonably necessary or advisable to
qualify the Registrable Securities for sale in such jurisdictions; provided that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions, and shall not be required to
register or qualify in any jurisdiction where such registration or qualification
is not permitted or approved by such jurisdiction, following the Company's best
efforts to obtain such permission or approval.
(v) Notify each Holder immediately of the happening of any
event as a result of which the prospectus (including any supplements thereto or
thereof) included in such Registration Statement, as then in effect, includes an
untrue statement of material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and use its best efforts to promptly
update and/or correct such prospectus to correct such untrue statement or
omission, and deliver such number of copies of such supplement or amendment to
each Holder as such Holder may reasonably request.
(vi) Notify each Holder immediately of the issuance by the
Commission or any state securities commission or agency of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose. The Company shall prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible time.
(vii) Permit a single firm of counsel, designated as Holders'
counsel by a majority of the Registrable Securities included in the Registration
Statement, to review the Registration Statement and all amendments and
supplements thereto within a reasonable period of time prior to each filing, and
shall not file any document in a form to which such counsel reasonably objects
and will not request acceleration of the Registration Statement without prior
notice to such counsel. The sections of the Registration Statement covering
information with respect to the Investor, the Investor's beneficial ownership of
securities of the Company or the Investor's intended method of disposition of
Registrable Securities shall conform to the information provided to the Company
by the Investor.
(viii) List the Registrable Securities covered by such
Registration Statement with all securities exchange(s) and/or markets on which
the Common Stock is then listed and prepare and file any required filings with
the National Association of Securities Dealers, Inc. or any exchange or market
where the Common Shares are traded.
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(ix) If applicable, take all steps necessary to enable Holders
to avail themselves of the prospectus delivery mechanism set forth in Rule 153
(or successor thereto) under the Act.
(x) The Company shall hold in confidence and not make any
disclosure of information concerning a Holder provided to the Company unless (a)
disclosure of such information is necessary to comply with federal or state
securities laws, (b) the disclosure of such information is necessary to avoid or
correct a misstatement or omission in any Registration Statement, (c) the
release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction, or (d) such
information has been made generally available to the public other than by
disclosure in violation of this or any other agreement. The Company agrees that
it shall, upon learning that disclosure of such information concerning a Holder
is sought in or by a court of governmental body of competent jurisdiction or
through other means, give prompt notice to such Holder prior to making such
disclosure, and allow such Holder, at its expense, to undertake appropriate
action to prevent disclosure of, or obtain a protective order for, such
information.
(xi) The Company shall provide a transfer agent and registrar,
which may be a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement.
(xii) The Company shall cooperate with the Holders of
Registrable Securities being offered and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends with respect to
transferability) representing Registrable Securities to be offered pursuant to
the Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the managing underwriter or
underwriters, if any, or the Holders may reasonably request and registered in
such names as the managing underwriter or underwriters, if any, or the Holders
may request, and, within three (3) business days after a Registration Statement
which includes Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel selected by the Company to
deliver, to the transfer agent for the Registrable Securities (with copies to
the Holders whose Registrable Securities are included in such Registration
Statement) an instruction in the form attached hereto as EXHIBIT 1 and an
opinion of such counsel in the form attached hereto as EXHIBIT 2.
(xiii) At the reasonable request of the Holders of a
majority-in-interest of the Registrable SecuritiEs, the Company shall prepare
and file with the SEC such amendments (including post-effective amendments) and
supplements to a Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary in order to change the plan
of distribution set forth in such Registration Statement.
(xiv) From and after the date of this Agreement, the Company
shall not, and shall not agree to, allow the holders of any securities of the
Company to include any of their securities in any Registration Statement under
Section 2(a) hereof or any amendment or supplement thereto under Section 3(b)
hereof without the consent of the holders of a majority-in-interest of the
Registrable Securities.
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(xv) The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by the Holders of Registrable
Securities pursuant to the Registration Statement.
(b) Set forth below in this Section 2(b) are (I) events that may
arise that the Investors consider will interfere with the full enjoyment of
their rights under this Agreement (the "Interfering Events"), and (II) certain
remedies applicable in each of these events.
Paragraphs (i) through (iv) of this Section 2(b) describe the
Interfering Events, and provide a remedy to the Holders if an Interfering Event
occurs.
Paragraph (v) provides, INTER ALIA, that if cash payments
required as the remedy in the case of certain of the Interfering Events are not
paid when due, the Company may be required by the Holders to redeem outstanding
shares of Common Stock and Warrant Shares at a specified price.
Paragraph (vi) provides, INTER ALIA, that the Holders
have the right to specific performance.
The preceding paragraphs in this Section 2(b) are meant to
serve only as an introduction to this Section 2(b), are for convenience only,
and are not to be considered in applying, construing or interpreting this
Section 2(b).
(i) DELAY IN EFFECTIVENESS OF REGISTRATION STATEMENT. The
Company agrees that it shall file the Registration Statement complying with the
requirements of this Agreement promptly and in any event within 45 days
following the date hereof (the "Closing Date") and shall use its best efforts to
cause such Registration Statement to become effective as soon as possible and in
no event later than October 31, 2000 (the "Registration Deadline"). In the event
that such Registration Statement has not been declared effective by the
Registration Deadline, then the Purchase Price (as defined in the Warrant) shall
be reduced by 1% of the Purchase Price on the Registration Deadline during and
after the 30-day period ("Default Period") from and after the Registration
Deadline during any part of which such Registration Statement is not effective,
and shall be further reduced by an additional 1.5% during and after each Default
Period thereafter. In addition, the Purchase Price shall be subject to further
adjustment as set forth in the Warrant.
(ii) NO LISTING; PREMIUM PRICE REDEMPTION FOR DELISTING OF
CLASS OF SHARES. In the event that the Company fails, refuses or is unable to
cause the Registrable Securities covered by the Registration Statement to be
listed with the Approved Market and each other securities exchange and market on
which the Common Stock is then traded at all times during the period ("Listing
Period") from the earlier of (i) the 90th day following the Closing Date and
(ii) the date the Registration Statement is declared effective by the SEC, until
five years after the date hereof (the "Maturity Date"), then the Company shall
pay in cash to each Holder a default payment in an amount equal to three percent
(3%) of the aggregate market value represented by the shares of Common Stock
held by such Holder and of theWarrant Shares (measured by the fair market value
(as defined in the Warrant) of such shares as of the date the Company is
obligated to make each payment) that would be issued upon full conversion of the
Holder's Warrant (the "Share Value")
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for each 30-day period during the Listing Period from and after such failure,
refusal or inability to so list the Registrable Securities until the Registrable
Securities are so listed.
(iii) BLACKOUT PERIODS. In the event any Holder's ability to
sell Registrable Securities under the Registration Statement is suspended for
more than (i) five (5) consecutive days or (ii) ten (10) days in any calendar
year ("Suspension Grace Period"), including without limitation by reason of a
suspension of trading of the Common Stock on the Approved Market, any suspension
or stop order with respect to the Registration Statement or the fact that an
event has occurred as a result of which the prospectus (including any
supplements thereto) included in such Registration Statement then in effect
includes an untrue statement of material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, then the Company shall
pay in cash to each Holder an amount equal to three percent (3%) of the Share
Value for each 30-day period from and after the expiration of the Suspension
Grace Period.
(iv) CONVERSION DEFICIENCY; PREMIUM PRICE REDEMPTION FOR
CONVERSION DEFICIENCY. In the event that the Company does not have a sufficient
number of Common Shares available to satisfy the Company's obligations to any
Holder upon receipt of a Subscription Notice or is otherwise unable or unwilling
to issue such Common Shares (including without limitation by reason of the limit
described in Section 10 below) in accordance with the terms of the Warrant for
any reason after receipt of a Subscription Notice, then the Company shall pay in
cash to each Holder an amount equal to three percent (3%) of the Share Value
with respect to the Warrant Shares for each 30-day period (or portion thereof)
that the Company fails or refuses to issue Common Shares in accordance with the
terms of the Warrant.
(v) PREMIUM PRICE REDEMPTION FOR CASH PAYMENT DEFAULTS.
(A) The Company acknowledges that any failure,
refusal or inability by the Company described in the foregoing paragraphs (i)
through (iv) will cause the Holders to suffer damages in an amount that will be
difficult to ascertain, including without limitation damages resulting from the
loss of liquidity in the Registrable Securities and the additional investment
risk in holding the Registrable Securities. Accordingly, the parties agree that
it is appropriate to include in this Agreement the foregoing provisions for
default payments, discounts and mandatory redemptions in order to compensate the
Holders for such damages. The parties acknowledge and agree that the default
payments, discounts and mandatory redemptions set forth above represent the
parties' good faith effort to quantify such damages and, as such, agree that the
form and amount of such default payments, discounts and mandatory redemptions
are reasonable and will not constitute a penalty.
(B) Each default payment provided for in the
foregoing paragraphs (ii) through (iv) shall be in addition to each other
default payment. All default payments (which payments shall be pro rata on a per
diem basis for any period of less than 30 days) required to be made in
connection with the above provisions shall be paid in cash at any time upon
demand, and whether or not a demand is made, by the tenth (10th) day of each
calendar month for each partial or full 30-day period occurring prior to that
date.
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(C) In the event that the Company fails or refuses to
pay any default payment or honor any penalty or similar amounts when due, at any
Holder's request and option the Company shall purchase all or a portion of the
shares of Common Stock and Warrant Shares held by such Holder (with default
payments accruing through the date of such purchase), within five (5) days of
such request, at a purchase price equal to 130% of the fair market value (as
defined in the Warrant) of such shares or, if and to the extent that the Warrant
has not been exercised, by a 30% reduction in the then Purchase Price, provided
that such Holder may revoke such request at any time prior to receipt of such
payment of such purchase price.
(vi) CUMULATIVE REMEDIES. The default payments and mandatory
redemptions provided for above are in addition to and not in lieu or limitation
of any other rights the Holders may have at law, in equity or under the terms of
the Warrants or this Agreement, including without limitation the right to
specific performance. Each Holder shall be entitled to specific performance of
any and all obligations of the Company in connection with the registration
rights of the Holders hereunder.
(c) Subject to Section 2(b) above, the Company may suspend the use
of any prospectus used in connection with the Registration Statement only in the
event, and for such period of time as, such a suspension is required by the
rules and regulations of the Commission. The Company will use its best efforts
to cause such suspension to terminate at the earliest possible date.
(d) The Company shall file a Registration Statement with respect to
any newly authorized and/or reserved shares, if necessary to fulfill its
obligations under this Agreement, within five (5) business days of any
shareholders meeting authorizing same and shall use its best efforts to cause
such Registration Statement to become effective within sixty (60) days of such
shareholders meeting. If the Holders become entitled, pursuant to an event
described in clause (iii) of the definition of Registrable Securities, to
receive any securities in respect of Registrable Securities that were already
included in a Registration Statement, subsequent to the date such Registration
Statement is declared effective, and the Company is unable under the securities
laws to add such securities to the then effective Registration Statement, the
Company shall promptly file, in accordance with the procedures set forth herein,
an additional Registration Statement with respect to such newly Registrable
Securities. The Company shall use its best efforts to (i) cause any such
additional Registration Statement, when filed, to become effective under the
Securities Act, and (ii) keep such additional Registration Statement effective
during the period described in Section 5 below. All of the registration rights
and remedies under this Agreement shall apply to the registration of such newly
reserved shares and such new Registrable Securities, including without
limitation the provisions providing for default payments contained herein.
(e) Subject to the last sentence of this Section 2(e), if at any
time prior to the expiration of the Registration Period (as hereinafter defined)
the Company shall file with the SEC a Registration Statement relating to an
offering for its own account or the account of others under the Securities Act
of any of its equity securities (other than on Form S-4 or Form S-8 or their
then equivalents relating to equity securities to be issued solely in connection
with any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans), the Company shall
send to each Holder who is entitled to registration rights under this Section
2(e) written notice of such determination and, if within
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fifteen (15) days after the effective date of such notice, such Holder shall so
request in writing, the Company shall include in such Registration Statement all
or any part of the Registrable Securities such Holder requests to be registered,
except that if, in connection with any underwritten public offering for the
account of the Company the managing underwriter(s) thereof shall impose a
limitation on the number of shares of Common Stock which may be included in the
Registration Statement because, in such underwriter(s)' judgment, marketing or
other factors dictate such limitation is necessary to facilitate public
distribution, then the Company shall be obligated to include in such
Registration Statement only such limited portion of the Registrable Securities
with respect to which such Holder has requested inclusion hereunder as the
underwriter shall permit. Any exclusion of Registrable Securities shall be made
pro rata among the Holders seeking to include Registrable Securities in
proportion to the number of Registrable Securities sought to be include by such
Holders; PROVIDED, HOWEVER, that the Company shall not exclude any Registrable
Securities unless the Company has first excluded all outstanding securities, the
holders of which are not contractually entitled to inclusion of such securities
in such Registration Statement or are not entitled to pro rata inclusion with
the Registrable Securities; and PROVIDED, FURTHER, HOWEVER, that, after giving
effect to the immediately preceding proviso, any exclusion of Registrable
Securities shall be made pro rata with holders of other securities having the
right to include such securities in the Registration Statement other than
holders of securities entitled to inclusion of their securities in such
Registration Statement by reason of demand registration rights. No right to
registration of Registrable Securities under this Section 2(e) shall be
construed to limit any registration required under Section 2(a) hereof. If an
offering in connection with which a Holder is entitled to registration under
this Section 2(e) is an underwritten offering, then each Holder whose
Registrable Securities are included in such Registration Statement shall, unless
otherwise agreed by the Company, offer and sell such Registrable Securities in
an underwritten offering using the same underwriter or underwriters and, subject
to the provisions of this Agreement, on the same terms and conditions as other
shares of Common Stock included in such underwritten offering. Notwithstanding
anything to the contrary set forth herein, the registration rights of the
Holders pursuant to this Section 2(e) shall only be available in the event the
Company fails to timely file, obtain effectiveness or maintain effectiveness of
the Registration Statement to be filed pursuant to Section 2(a) in accordance
with the terms of this Agreement.
3. EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance with registration
pursuant to this Agreement shall be borne by the Company, and all Selling
Expenses of a Holder shall be borne by such Holder.
4. REGISTRATION ON FORM S-3. The Company shall seek to qualify for
registration on Form S-3 or any comparable or successor form or forms, or in the
event that the Company is ineligible to use such form, such form as the Company
is eligible to use under the Securities Act.
5. REGISTRATION PERIOD. In the case of the registration effected by the
Company pursuant to this Agreement, the Company will use its best efforts to
keep such registration effective until all the Holders have completed the sales
or distribution described in the Registration Statement relating thereto or, if
earlier, until such Registrable Securities may be sold under Rule 144(k)
(provided that the Company's transfer agent has accepted an instruction from the
Company to such effect).
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6. INDEMNIFICATION.
(a) THE COMPANY INDEMNITY. The Company will indemnify each Holder,
each of its officers, directors and partners, and each person controlling each
Holder, within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls, within the meaning of Section 15 of the
Securities Act and the rules and regulations thereunder, any underwriter,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering circular or
other document (including any related registration statement, notification or
the like) incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any state
securities law or in either case, any rule or regulation thereunder applicable
to the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance, and will
reimburse each Holder, each of its officers, directors and partners, and each
person controlling such Holder, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to a Holder to the extent that any such claim, loss, damage, liability
or expense arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company by such Holder or the
underwriter (if any) therefor and stated to be specifically for use therein. The
indemnity agreement contained in this Section 6(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent will
not be unreasonably withheld).
(b) HOLDER INDEMNITY. Each Holder will, severally and not jointly,
if Registrable Securities held by it are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors, officers, partners, and each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder, each
other Holder (if any), and each of their officers, directors and partners, and
each person controlling such other Holder(s) against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statement therein not
misleading, and will reimburse the Company and such other Holder(s) and their
directors, officers and partners, underwriters or control persons for any legal
or any other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
and stated to be specifically for use therein,
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and provided that the maximum amount for which such Holder shall be liable under
this indemnity shall not exceed the net proceeds received by such Holder from
the sale of the Registrable Securities. The indemnity agreement contained in
this Section 6(b) shall not apply to amounts paid in settlement of any such
claims, losses, damages or liabilities if such settlement is effected without
the consent of such Holder (which consent shall not be unreasonably withheld).
(c) PROCEDURE. Each party entitled to indemnification under this
Article (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim in any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at such party's expense, 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 Article
except to the extent that the Indemnifying Party is materially and adversely
affected by such failure to provide notice. 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 to such claim or litigation. Each Indemnified Party shall furnish
such information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
7. CONTRIBUTION. If the indemnification provided for in Section 6
herein is unavailable to the Indemnified Parties in respect of any losses,
claims, damages or liabilities referred to herein (other than by reason of the
exceptions provided therein), 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 losses, claims, damages or
liabilities as between the Company on the one hand and any Holder on the other,
in such proportion as is appropriate to reflect the relative fault of the
Company and of such Holder 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 on the one
hand and of any Holder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Holder.
In no event shall the obligation of any Indemnifying Party to
contribute under this Section 7 exceed the amount that such Indemnifying Party
would have been obligated to pay by way of indemnification if the
indemnification provided for under Section 6(a) or 6(b) hereof had been
available under the circumstances.
The Company and the Holders agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by PRO
RATA allocation (even if the Holders or the underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraphs. The amount paid or payable by an Indemnified Party as a
result of the losses, claims, damages and liabilities referred to in the
immediately
11
preceding paragraphs shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this section, no Holder or underwriter shall
be required to contribute any amount in excess of the amount by which (i) in the
case of any Holder, the net proceeds received by such Holder from the sale of
Registrable Securities or (ii) in the case of an underwriter, the total price at
which the Registrable Securities purchased by it and distributed to the public
were offered to the public exceeds, in any such case, the amount of any damages
that such Holder or underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person liable for or 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 liable for or guilty of such fraudulent
misrepresentation.
8A. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor hereby
makes the following representations and warranties to the Company as of the date
hereof:
(a) AUTHORIZATION; ENFORCEMENT. (i) The Investor has the requisite
power and authority to enter into and perform this Agreement and to acquire the
Warrants, (ii) the execution and delivery of this Agreement by the Investor and
the consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate or partnership action, and (iii) upon
execution, issuance and delivery hereof this Agreement will constitute, a valid
and binding obligation of the Investor enforceable against the Investor in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of creditors'
rights and remedies or by other equitable principles of general application.
8B. SURVIVAL. The indemnity and contribution agreements contained in
Sections 6 and 7 shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement or any underwriting agreement, (ii) any
investigation made by or on behalf of any Indemnified Party or by or on behalf
of the Company, and (iii) the consummation of the sale or successive resales of
the Registrable Securities.
9. INFORMATION BY HOLDERS. Each Holder shall furnish to the Company
such information regarding such Holder and the distribution and/or sale proposed
by such Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Agreement. The intended method or methods of
disposition and/or sale (Plan of Distribution) of such securities as so provided
by such Holder shall be included without alteration in the Registration
Statement covering the Registrable Securities and shall not be changed without
written consent of such Holder or its designee representative.
10. NASDAQ LIMIT ON STOCK ISSUANCES. Notwithstanding anything to the
contrary herein, the Company shall not be obligated to issue or register with
the SEC any shares of Common Stock to the extent that such issuance or
registration is prohibited by any rule, regulation or policy of Nasdaq or any
exchange or market upon which the Common Stock may be traded.
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11. REPLACEMENT CERTIFICATES. The certificate(s) representing the
Common Shares or Warrant Shares held by the Holder (or then Holder) may be
exchanged by the Investor (or such Holder) at any time and from time to time for
certificates with different denominations representing an equal aggregate number
of Common Shares or Warrant Shares, as reasonably requested by the Investor (or
such Holder) upon surrendering the same. No service charge will be made for such
registration or transfer or exchange.
12. TRANSFER OR ASSIGNMENT. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the Investor by
the Company under this Agreement to cause the Company to register Registrable
Securities may be transferred or assigned (in whole or in part) to a transferee
or assignee of Warrants which transfer has been effected in compliance with the
Warrants, and all other rights granted to the Investor by the Company hereunder
may be transferred or assigned to any transferee or assignee of any Warrants;
provided in each case that the Company must be given written notice by the
Investor at the time of or within a reasonable time after said transfer or
assignment, stating the name and address of said transferee or assignee and
identifying the securities with respect to which such registration rights are
being transferred or assigned; and provided further that the transferee or
assignee of such rights agrees in writing to be bound by the registration
provisions of this Agreement.
13. MISCELLANEOUS.
(a) REMEDIES. The Company and the Investor acknowledge and agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof, this being in addition to any other remedy to which any of
them may be entitled by law or equity.
(b) JURISDICTION. THE COMPANY AND THE INVESTOR (I) HEREBY
IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT, THE NEW YORK STATE COURTS AND OTHER COURTS OF THE UNITED STATES SITTING
IN NEW YORK COUNTY, NEW YORK FOR THE PURPOSES OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND (II) HEREBY WAIVE, AND AGREE
NOT TO ASSERT IN ANY SUCH SUIT ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER. THE COMPANY AND THE INVESTOR CONSENT TO
PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY
THEREOF TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS
AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING IN THIS PARAGRAPH SHALL AFFECT OR
LIMIT ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
(c) NOTICES. Any notice or other communication required or permitted
to be given hereunder shall be in writing by facsimile, mail or personal
delivery and shall be effective upon actual receipt of such notice. The
addresses for such communications shall be:
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to the Company:
Able Telcom Holding Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
with copies to:
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
to the Investor:
RGC International Investors, LDC
c/o ▇▇▇▇ ▇▇▇▇ Capital Management, L.P.
▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Any party hereto may from time to time change its address for notices by giving
at least 10 days' written notice of such changed address to the other parties
hereto.
(d) WAIVERS. No waiver by any party of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter. The representations and warranties and the agreements and
covenants of the Company and each Investor contained herein shall survive the
Closing.
14
(e) EXECUTION. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, it
being understood that all parties need not sign the same counterpart.
(f) PUBLICITY. The Company agrees that it will not disclose, and
will not include in any public announcement, the name of the Investor without
its consent, unless and until such disclosure is required by law or applicable
regulation, and then only to the extent of such requirement. The Company agrees
to deliver a copy of any public announcement regarding the matters covered by
this Agreement or any agreement or document executed herewith to each Investor
and any public announcement including the name of an Investor to such Investor,
prior to the publication of such announcements.
(g) ENTIRE AGREEMENT. This Agreement, together with the Warrants and
the agreements and documents contemplated hereby and thereby, contains the
entire understanding and agreement of the parties, and may not be modified or
terminated except by a written agreement signed by both parties.
(h) GOVERNING LAW; CONSENT OF JURISDICTION. THIS AGREEMENT AND THE
VALIDITY AND PERFORMANCE OF THE TERMS HEREOF SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED ENTIRELY IN SUCH STATE AND,
WHERE APPLICABLE, FEDERAL LAW.
(i) JURY TRIAL. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY
JURY.
(j) TITLES. The titles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
[SIGNATURE PAGE FOLLOWS]
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ABLE TELCOM HOLDING CORP.
By:________________________________________
Name:
Title:
INVESTOR:
RGC INTERNATIONAL INVESTORS, LDC
BY: ▇▇▇▇ ▇▇▇▇ CAPITAL MANAGEMENT, L.P.
INVESTMENT MANAGER
BY: RGC GENERAL PARTNER CORP, AS
GENERAL PARTNER
__________________________________________
BY:▇▇▇▇▇ BLOCHTNER CORP, AS
TITLE: MANAGING DIRECTOR
16
EXHIBIT 1
TO REGISTRATION
RIGHTS AGREEMENT
[Company Letterhead]
[Date]
[Name and address of Transfer Agent]
Ladies and Gentlemen:
This letter shall serve as our irrevocable authorization and direction
to you (1) to transfer or re-register (or at the holders request to reissue to
the holder thereof without any restrictive legend) the certificates for the
shares of Common Stock, par value $0.001 per share (the "COMMON STOCK"), of Able
Telcom Holding Corp., a Florida corporation (the "COMPANY") represented by
certificate numbers ____ for an aggregate of ____ shares (the "OUTSTANDING
SHARES") of Common Stock presently registered in the name of RGC International
Investors, LDC (the "INVESTOR") (certain of which shares were previously issued
upon exercise of the Warrants (as hereinafter defined)), upon surrender of such
certificates to you, notwithstanding the legend appearing on such certificates,
and (2) to issue shares (the "WARRANT SHARES") of Common Stock to or upon the
order of the registered holder from time to time of the Warrants of the Company
(the "WARRANTS") upon surrender to you of a properly completed and duly executed
Exercise Agreement and such Warrants notwithstanding the legend appearing on
such Warrants. The transfer or re-registration of the certificates for the
Outstanding Shares by you should be made at such time as you are requested to do
so by the record holder of the Outstanding Shares. The certificate issued upon
such transfer or re-registration should be registered in such name as requested
by the holder of record of the certificate surrendered to you and should not
bear any legend which would restrict the transfer of the shares represented
thereby. In addition, you are hereby directed to remove any stop-transfer
instruction relating to the Outstanding Shares. Certificates for the Warrant
Shares should not bear any restrictive legend and should not be subject to any
stop-transfer restriction.
Pursuant to applicable securities laws or certain agreements between
the Company and the Investor, the Investor may be prohibited during certain
limited periods of time from selling its Outstanding Shares or other shares of
Common Stock issuable upon exercise of the Warrants under the Registration
Statement; PROVIDED, HOWEVER, that such Investor may continue to sell
17
such securities pursuant to an exemption from registration under the Securities
Act of 1933, as amended (the "SECURITIES ACT"). The Company may, during such
periods, deliver a notice to you advising you to refrain from transferring any
Outstanding Shares pursuant to such Registration Statement, provided that such
notice shall not prohibit the transfer of such shares pursuant to an exemption
from registration under the Securities Act during such periods.
Contemporaneous with the delivery of this letter, the Company is
delivering to you a letter of ____________________ as to registration of the
Outstanding Shares and the Conversion Shares under the Securities Act of 1933,
as amended.
Should you have any questions concerning this matter, please contact
me.
Very truly yours,
ABLE TELCOM HOLDING CORP.
_______________________________________
By:
Title:
Enclosures:
cc: RGC International Investors, LDC
18
EXHIBIT 2
TO REGISTRATION
RIGHTS AGREEMENT
[Date]
[Name and address
of Transfer Agent]
RE: ABLE TELCOM HOLDING CORP.
Ladies and Gentlemen:
We are counsel to Able Telcom Holding Corp., a Florida corporation (the
"COMPANY"), and we understand that RGC International Investors, LDC (the
"HOLDER") has received from the Company in an exchange, 500,000 shares of Common
Stock and warrants (the "WARRANTS") that are exercisable into 100,000 shares of
the Company's Common Stock, par value $0.001 per share (the "COMMON STOCK").
Pursuant to a Registration Rights Agreement, dated as of February 4, 2000,
between the Company and the Holder (the "REGISTRATION RIGHTS AGREEMENT"), the
Company agreed with the Holder, among other things, to register the Registrable
Securities (as that term is defined in the Registration Rights Agreement) under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), upon the terms
provided in the Registration Rights Agreement. In connection with the Company's
obligations under the Registration Rights Agreement, on _______, 2000, the
Company filed a Registration Statement on Form S-3 (File No. 333-___________)
(the "REGISTRATION STATEMENT") with the Securities and Exchange Commission
relating to the Registrable Securities, which names the Holder as a selling
stockholder thereunder.
[Other introductory language to be inserted]
Based on the foregoing, we are of the opinion that the Registrable
Securities have been
19
registered under the Securities Act.
[Other appropriate language to be included.]
Very truly yours,
cc: RGC International Investors, LDC
20