Exhibit 10.8
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Rights Agreement"), entered
into as of December 30, 1999, between Cripple Creek Securities, LLC, a New York
limited liability company (the "Investor"), and Elcom International, Inc., a
Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Structured Equity Line Flexible
Financing Agreement by and between the Company and the Investor (the
"Agreement"), the parties desire that, upon the terms and subject to the
conditions contained herein, the Company may elect to issue to the Investor,
and, at the Company's option, the Investor shall purchase from the Company, from
time to time as provided in the Agreement, shares of the Company's common stock
(the "Common Stock"), par value $.01 per share, for a maximum aggregate purchase
price of $50,000,000;
WHEREAS, the Company has agreed to issue to the Investor warrants (the
"Warrants") to purchase up to an aggregate of 750,000 shares of Common Stock
(the "Shares") at prices determined pursuant to the Agreement upon the
occurrence, if any, of certain circumstances set forth in the Agreement; and
WHEREAS, pursuant to the terms of and in partial consideration for, the
Investor's commitment to enter into the Agreement, the Company has agreed to
provide the Investor with certain registration rights with respect to the Shares
as set forth in this Rights Agreement;
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the
Agreement, the Warrants and this Rights Agreement and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, intended to be legally bound hereby, the Company and the Investor
agree as follows:
1. Certain Definitions. Capitalized terms used in this Rights Agreement and not
otherwise defined herein shall have the same meaning ascribed to them in the
Agreement. The following terms shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Investor" shall include the Investor and any permitted assignee or
transferee of the rights under the Agreement and the Warrants to whom the
registration rights conferred by this Rights Agreement have been transferred in
compliance with Section 9 of this Rights Agreement.
The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing an appropriate 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, subject to Section 11.2 of the
Agreement, all expenses to be incurred by the Company in connection with
Investor's exercise of its registration rights under this Rights Agreement,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company, blue sky fees and
expenses, reasonable fees and disbursements of counsel to Investor for a "due
diligence" examination of the Company and review of the Registration Statement
(as defined below), and the expense of any special audits incident to or
required employees of the Company, which shall be paid in any event by the
Company); provided, however, that in no event shall the aggregate amount paid by
the Company under this Rights Agreement and under the Agreement exceed the
limitations, to the extent applicable, set forth in Section 11.2 of the
Agreement.
"Registrable Securities" shall mean any Shares or other securities
issued or issuable to the Investor or any holder or transferee upon the exercise
of the Warrants until (i) a registration statement under the Securities Act
covering the offering of such Shares has been declared effective by the
Commission and such Shares have been disposed of pursuant to such effective
registration statement, (ii) such Shares are sold under circumstances in which
all of the applicable conditions of Rule 144 (or any similar provision then in
force) under the Securities Act ("Rule 144") are met, (iii) such Shares have
been otherwise transferred and the Company has delivered a new certificate or
other evidence of ownership for such securities not bearing a restrictive
legend, or (iv) such time as, in the opinion of counsel to the Company, which
counsel shall be acceptable to the Investor in its reasonable discretion, all
such Shares may be sold without any time, volume or manner limitation pursuant
to Rule 144(k) (or any similar provision then in effect) under the Securities
Act.
2. Registration Requirements. The Company shall use its reasonable best
efforts to effect the registration of the Registrable Securities contemplated by
the Warrants (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 warrant holder for
purposes of maximizing the proceeds realizable by the Investor from such sale or
distribution. Such reasonable best efforts by the Company shall include without
limitation the following:
(a) Subject to the terms and conditions of this Rights Agreement,
the Company shall file with the Commission (i) no later than thirty (30) days
from the date of execution of the Agreement, an appropriate registration
statement under the Securities Act for the registration of the resale by the
Investor of the Registrable Securities (the "Registration Statement") which
Registration Statement shall have been declared effective by the Commission no
later than one hundred twenty (120) days from the Effective Date. Furthermore,
at the time of filing of the Registration Statement, the Company shall file (A)
such blue sky filings as shall have been requested by the Investor; and (B) any
required filings with the National Association of Securities Dealers, Inc. or
exchange or market where the Shares are traded. The Company shall use its best
efforts to have all filings declared effective as promptly as practicable.
(b) (i) If the Company (A) fails to file the Registration Statement
complying with the requirements of this Rights Agreement within thirty (30) days
from the date
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of the execution of the Agreement or if the Registration Statement has not
become effective on or before one hundred twenty (120) days from the Effective
Date, the Investor shall have, in addition to and without limiting any other
rights it may have at law, in equity or under the Agreement, or this Rights
Agreement (including the right to specific performance), the right to receive,
as liquidated damages, the payments as provided in subparagraph (ii) of this
section.
(ii) In the event the Company fails to obtain the effectiveness
of a Registration Statement within the time period set forth in Section 2(a),
the Company shall pay to the Investor an amount equal to (A) $100, in cash, for
each day of the thirty (30) day period following the date by which such
Registration Statement was required to have been declared effective and (B)
$500, in cash, for each day after such first thirty (30) day period. In addition
to the foregoing, in the event the Company fails to maintain the effectiveness
of a Registration Statement (or the use of the underlying prospectus) throughout
the period set forth in Section 5(a), other than suspensions as set forth in
Section 4, the Company shall pay to the Investor an amount equal to $500, in
cash, per day, in which a suspension has occurred.
(c) The Company shall enter into such customary agreements and take
all such other reasonable actions in connection therewith in order to expedite
or facilitate the disposition of such Registrable Securities.
3. Registration Procedures. The Company will keep the Investor advised
in writing as to the initiation of each registration and as to the completion
thereof. At its expense, the Company will use its reasonable best efforts to:
(a) Keep such registration effective for the period ending sixty
(60) months, as extended pursuant to Section 4 hereof, following the Effective
Date of the Agreement, or until such shorter period that will terminate when
there are no Registrable Securities outstanding.
(b) Furnish such number of prospectuses and amendments and
supplements thereto, and other documents incident thereto as the Investor from
time to time may reasonably request.
(c) Prepare and file with the Commission such amendments and post-
effective amendments to the Registration Statement as may be necessary to keep
such Registration Statement effective for the applicable period; cause the
related prospectus to be supplemented by any required prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 under the Securities Act;
and comply with the provisions of the Securities Act applicable to it with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended methods
of disposition by the sellers thereof set forth in such Registration Statement
or supplement to such prospectus;
(d) Notify the Investor and its counsel (as designated in writing by
the Investor) promptly, and confirm such notice (a "Notice") in writing, (i)
when a prospectus or any prospectus supplement or post-effective amendment has
been filed, and, with respect to the Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the Commission for amendments or supplements to the Registration
Statement or related prospectus or for additional information, (iii) of the
issuance by the
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Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purposes, (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, (v) of the
happening of any event as a result of which the prospectus included in the
Registration Statement (as then in effect) contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein (in the case of the prospectus or
any preliminary prospectus, in light of the circumstances under which they were
made) not misleading, and (vi) of the Company's reasonable determination that a
post-effective amendment to the Registration Statement would be appropriate or
that there exist circumstances not yet disclosed to the public which make
further sales under such Registration Statement inadvisable pending such
disclosure and post-effective amendment;
(e) Upon the occurrence of any event contemplated by Section 3(d)(ii)
-(vi) and immediately upon the expiration of any Blocking Period (as defined in
Section 4), prepare, if the occurrence of such event or period requires such
preparation, a supplement or post-effective amendment to the Registration
Statement or related prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities being sold thereunder, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements, in light of the
circumstances under which they were made, not misleading;
(f) Obtain the withdrawal of any order suspending the effectiveness of
the Registration Statement, or the lifting of any suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction,
at the earliest possible moment;
(g) Cause all Registrable Securities subject to the Registration
Statement at all times to be registered or qualified for offer and sale under
the securities or blue sky laws of such jurisdictions as any Investor reasonably
requests in writing; use its best efforts to keep each such registration or
qualification effective, including through new filings or amendments or
renewals, during the period the Registration Statement is required to be kept
effective and do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Registrable Securities
covered by the Registration Statement; provided, however, that the Company will
not be required to qualify to do business or take any action that would subject
it to taxation or general service of process in any jurisdiction where it is not
then so qualified or subject;
(h) Cause the Registrable Securities covered by the Registration
Statement to be registered with or approved by such other governmental agencies
or authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Registrable Securities in accordance with the
chosen method or methods of distribution; and
(i) Cause all Registrable Securities included in such
Registration Statement to be listed, by the date of first sale of Registrable
Securities pursuant to such Registration Statement, on the principal securities
exchange or automated interdealer system on which the same type of securities of
the Company are then listed or traded.
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4. Suspensions of Effectiveness. The Company may suspend dispositions under
the Registration Statement and notify the Investor that it may not sell the
Registrable Securities pursuant to any Registration Statement or prospectus (a
"Blocking Notice") if the Company's management determines in its good faith
judgment that the Company's obligation to ensure that such Registration
Statement and prospectus are current and complete would require the Company to
take actions that might reasonably be expected to have a materially adverse
effect on the Company and its shareholders; provided that such suspension
pursuant to a Blocking Notice or Prospectus Inadequacy Notice (as defined below)
or as a result of the circumstances described in Section 3(d)(ii)-(vi) may not
exceed ninety (90) days (whether or not consecutive) in any twelve (12) month
period. The Investor agrees by acquisition of the Registrable Securities that,
upon receipt of a Blocking Notice or "Prospectus Inadequacy Notice" from the
Company of the existence of any fact of the kind described in the following
sentence, the Investor shall not dispose of, sell or offer for sale the
Registrable Securities pursuant to the Registration Statement until such
Investor receives (i) copies of the supplemented or amended prospectus, or until
counsel for the Company shall have determined that such disclosure is not
required due to subsequent events, (ii) notice in writing (the "Advice") from
the Company that the use of the prospectus may be resumed and (iii) copies of
any additional or supplemental filings that are incorporated by reference in the
Prospectus. Pursuant to the immediately preceding sentence, the Company may
provide such Prospectus Inadequacy Notice to the Investor upon the determination
by the Company of the existence of any fact or the happening or any event that
makes any statement of a material fact made in the Registration Statement, the
prospectus, any amendment or supplement thereto, or any document incorporated by
reference therein untrue in any material respect, or that requires the making of
any additions to or changes in the Registration Statement or the prospectus, in
order to make the statements therein not misleading in any material respect. If
so directed by the Company in connection with any such notice, each Investor
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Investor's possession, of the prospectus
covering such Registrable Securities that was current immediately prior to the
time of receipt of such notice. In the event the Company shall give any such
Blocking Notice or Prospectus Inadequacy Notice, the time regarding the
effectiveness of such Registration Statement set forth in Section 5(a) shall be
extended by one and one-half (1-1/2) times the number of days during the period
from and including the date of the giving of such Blocking Notice or Prospectus
Inadequacy Notice to and including the date when the Investor shall have
received the copies of the supplemented or amended prospectus, the Advice and
any additional or supplemental filings that are incorporated by reference in the
prospectus. Delivery of a Blocking Notice or Prospectus Inadequacy Notice and
the related suspension of any Registration Statement shall not constitute a
default under this Rights Agreement. However, if the Investor's ability to sell
under the Registration Statement is suspended for more than the ninety (90) days
period described above, the Investor may elect, in its sole and absolute
discretion, to terminate the Agreement pursuant to Section 10.4(b)(i) of the
Agreement.
5. Indemnification.
(a) Company Indemnity. The Company will indemnify the Investor, each
of its officers, directors and partners, and each person controlling the
Investor, within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act and the rules and regulations thereunder with respect to
which registration, qualification or compliance has been
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effected pursuant to this Rights Agreement, 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 (including any related registration statement, notification or
the like or any amendment thereto) 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 the Investor, each of its
officers, directors and partners, and each person controlling the Investor, 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 the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission (or alleged untrue statement or omission) that
is made in reliance upon and in conformity with written information furnished to
the Company by the Investor and stated to be specifically for use therein. In
addition to any other information furnished in writing to the Company by the
Investor, the information in the Registration Statement concerning the Investor
under the captions "Selling Shareholders" (or any similarly captioned Section
containing the information required pursuant to Item 507 of Regulation S-K
promulgated pursuant to the Securities Act) and "Plan of Distribution" (or any
similarly captioned Section containing information required pursuant to Item 508
of Regulation S-K) shall be deemed information furnished in writing to the
Company by the Investor to the extent it conforms to information actually
supplied in writing by the Investor. The indemnity agreement contained in this
Section 5(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) Investor Indemnity. The Investor will, 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 or Section 20 of the Exchange Act and the rules and regulations
thereunder, each other Investor (if any), and each of their officers, directors
and partners, and each person controlling such other Investor (if any), and each
of their officers, directors, and partners, and each person controlling such
other Investor 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 (or any amendment thereto) or prospectus 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 its directors, officers and partners, 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 or prospectus in reliance upon and in conformity with written
information furnished to the Company by the Investor and stated to be
specifically for use therein, and
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provided that no Investor shall be liable under this indemnity for an amount in
excess of the proceeds received by the Investor from the sale of the Registrable
Securities pursuant to such Registration Statement; provided, however, that
nothing contained herein shall limit the Investor's obligation to provide
indemnification pursuant to Section 11.3 of the Agreement. In addition to any
other information furnished in writing to the Company by the warrant holder, the
information in the Registration Statement concerning the Investor under the
captions "Selling Shareholders" (or any similarly captioned Section containing
the information required pursuant to Item 507 of Regulation S-K promulgated
pursuant to the Securities Act) and "Plan of Distribution" (or any similarly
captioned Section containing information required pursuant to Item 508 of
Regulation S-K) shall be deemed information furnished in writing to the Company
by the Investor to the extent it conforms to information actually supplied in
writing by the Investor. The indemnity agreement contained in this Section 5(b)
shall not apply to amounts paid in settlement of any such claims, losses,
damages or liabilities if such settlement is effected without the written
consent of the Investor (which consent shall not be unreasonably withheld).
(c) Procedure. Each party entitled to indemnification under this
Section 5 (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. The Indemnifying Party shall not, in
connection with any one such action or proceeding or separate but substantially
similar or related actions or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for such Indemnified Party, provided, however,
that if separate firm(s) of attorneys are required due to a conflict of
interest, then the indemnifying party shall be liable for the reasonable fees
and expenses of each such separate firm. 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.
6. Contribution. If the indemnification provided for in Section 5 hereof is
unavailable to the Indemnified Party 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 (i)
as between the Company and the Investor on the one hand and the underwriters on
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the other, in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Investor on the one hand or underwriters, as the
case may be, on the other from the offering of the Registrable Securities, or if
such allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and of 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 and (ii) as between the Company on the one hand and the Investor
on the other, in such proportion as is appropriate to reflect the relative fault
of the Company and of the Investor 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 benefits received by the Company on the one hand and the
Investor on the other shall be deemed to be in the same proportion as the
proceeds from the offering received by the Company from the initial sale of the
Registrable Securities by the Company to the Investor pursuant to this Rights
Agreement bear to the proceeds received by the Investor from the sale of
Registrable Securities pursuant to the Registration Statement. The relative
fault of the Company on the one hand and of the Investor 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 the Investor.
In no event shall the obligation of any Indemnifying Party to
contribute under this Section 6 exceed the amount that such Indemnifying Party
would have been obligated to pay by way of indemnification if the
indemnification provided for under Section 5(a) or Section 5(b) hereof had been
available under the circumstances.
The Company and the Investor agree that it would not be just and
equitable if contribution pursuant to this Section 6 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
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
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 Investor shall be required to
contribute any amount in excess of the amount by which the Investor, the total
price at which the shares of Common Stock offered by the Investor and
distributed to the public, or offered to the public, exceeds the amount of any
damages that the Investor has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. 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.
7. Survival. The indemnity and contribution agreements contained in Section
5 and Section 6 shall remain operative and in full force and effect regardless
of (i) any termination of the 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.
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8. Information by Investor. The Investor shall promptly furnish to the
Company such information regarding the Investor and the distribution proposed by
such Investor 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 Rights Agreement. All information provided to the
Company by the Investor shall be accurate and complete in all material respects
and the Investor shall promptly notify the Company if any such information
becomes incorrect or incomplete.
9. Transfer or Assignment of Rights. Neither this Rights Agreement nor any
rights of the Investor or the Company hereunder may be assigned by either party
to any other person. Notwithstanding the foregoing, upon prior written notice to
the Company, the Investor's rights and obligations under this Rights Agreement
may be assigned, in whole or in part, to any Affiliate of the Investor (a
"Permitted Transferee"), and the rights and obligation of the Investor under
this Rights Agreement shall inure to the benefit of, and be enforceable by and
against, any such Permitted Transferee.
10. Miscellaneous.
(a) Entire Agreement. This Rights Agreement, together with the
Agreement, contains the entire understanding and agreement of the parties
relating to the registration of Registrable Securities, and may not be modified
or terminated except by a written agreement signed by both parties.
(b) Notices. All notices, demands, requests, consents, approvals or
other communications required or permitted to be given hereunder or which are
given with respect to this Rights Agreement shall be in writing and shall be
personally served or deposited in the mail, registered or certified, return
receipt requested, postage prepaid, or delivered by reputable air courier
service with charges prepaid, or transmitted by hand delivery, telegram, telex
or facsimile, addressed as set forth below, or to such other address as such
party shall have specified most recently by written notice: If to the Company,
to:
Elcom International, Inc.
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to (which shall not constitute notice) to:
▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇ LLP
1400 ▇▇▇▇▇▇▇▇ Investment Center
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Investor, to
Cripple Creek Securities, LLC c/o The Palladin Group
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▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attn. ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Subject to Section 2.3(c) of the Agreement, notice shall be deemed given on the
date of service or transmission if personally served or transmitted by telegram,
telex or facsimile during normal business hours of the recipient. Notice
otherwise sent as provided herein shall be deemed given on the third business
day following the date mailed or on the second business day following delivery
of such notice by a reputable air courier service.
(c) Gender of Terms. All terms used herein shall be deemed to include
the feminine and the neuter, and the singular and the plural, as the context
requires.
(d) GOVERNING LAW; CONSENT OF JURISDICTION; WAIVER OF JURY TRIAL.
THIS RIGHTS AGREEMENT AND THE VALIDITY AND PERFORMANCE OF THE TERMS HEREOF SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW OR CHOICE OF LAW. THE
PARTIES HERETO HEREBY AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING DIRECTLY OR
INDIRECTLY FROM OR IN CONNECTION WITH THIS RIGHTS AGREEMENT SHALL BE LITIGATED
ONLY IN THE SUPREME COURT OF THE STATE OF NEW YORK OR THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK LOCATED IN NEW YORK COUNTY, NEW
YORK. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO CONSENT TO
THE JURISDICTION AND VENUE OF THE FOREGOING COURTS AND CONSENT THAT ANY PROCESS
OR NOTICE OF MOTION OR OTHER APPLICATION TO EITHER OF SAID COURTS OR A JUDGE
THEREOF MAY BE SERVED INSIDE OR OUTSIDE THE STATE OF NEW YORK OR THE SOUTHERN
DISTRICT OF NEW YORK BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO
THE SUCH PARTY AT ITS ADDRESS SET FORTH IN THIS RIGHTS AGREEMENT (AND SERVICE SO
MADE SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER THE SAME HAS BEEN POSTED AS
AFORESAID) OR BY PERSONAL SERVICE OR IN SUCH OTHER MANNER AS MAY BE PERMISSIBLE
UNDER THE RULES OF SAID COURTS. THE
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PARTIES HERETO HEREBY WAIVE ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY
LITIGATION PURSUANT TO THIS RIGHTS AGREEMENT.
(e) Titles. The titles used in this Rights Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Rights Agreement.
(f) Rule 144. The Company will use its reasonable best efforts to file
all reports required to be filed by it under the Securities Act and the Exchange
Act and it will take such further action as holders of Registrable Securities
may reasonably request, all to the extent required from time to time to enable
the Investor to sell Registrable Securities without registration under the Act
within the limitation of the exemptions provided by (a) Rule 144, as such Rule
may be amended from time to time, or (b) any similar role or regulation
hereafter adopted by the Commission. If at any time the Company is not required
to file such reports, it will, upon the request of the Investor, make publicly
available other information so long as necessary to permit sales pursuant to
Rule 144. Upon the request of the Investor, the Company will deliver to the
Investor a written statement as to whether it has complied with such
requirements.
(g) Counterparts. This Rights Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed as of the date first above written.
CRIPPLE CREEK SECURITIES, LLC ELCOM INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Printed: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Printed: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Principal Title: Chief Financial Officer
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]