Exhibit 10.5
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into this
3rd day of January, 2005, by and between DIGITAL FUSION, INC., a Delaware
corporation (the "Company") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇").
WHEREAS, pursuant to that certain Stock Purchase Agreement of even date
herewith by and between the Company and Wicks (the "Stock Purchase Agreement"),
Wicks acquired 575,000 shares of the Company's common stock (the "Common Stock")
and was issued a convertible promissory note (the "Note") which is convertible
into Common Stock in certain events (a "Conversion Event") as specifically set
forth in the Note.
WHEREAS, as a condition to entering into the Stock Purchase Agreement,
Wicks desires that the Company grant certain registration rights with respect to
the Common Stock.
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein contained, the Investors and the Company hereby agree as follows:
1. Definitions.
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As used herein:
(a) The term "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
(b) The term "Holder" means Wicks and any heirs, successors,
assigns or transferees of Wicks contemplated by Section 18 hereof.
(c) The terms "register," "registered," and "registration,"
unless the context otherwise requires, refer to a registration effected by
preparing and filing a Registration Statement in compliance with the Securities
Act, and the declaration or ordering of the effectiveness of such Registration
Statement.
(d) The term "Person" shall have the meaning set forth in
Section 2(2) of the Securities Act.
(e) The term "Prospectus" shall have the meaning set forth in
Section 2(10) of the Securities Act.
(f) The term "Registrable Securities" means all of the
Company's Common Stock which was acquired by Holder pursuant to the Stock
Purchase Agreement and all of the Company's Common Stock which will be converted
from the Note.
(g) The term "Registration Expenses" shall mean any and all
expenses incident to the performance of or compliance by the Company with this
Agreement, including without limitation: (i) all SEC or National Association of
Securities Dealers, Inc. (the "NASD") registration and filing fees, including,
if applicable, the fees and expenses of any "qualified independent underwriter"
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(and its counsel) that is required to be retained by any Holder of Registrable
Securities in accordance with the rules and regulations of the NASD, (ii) all
fees and expenses incurred in connection with compliance with state securities
or blue sky laws (including reasonable fees and disbursements of one counsel for
any underwriters or Holder in connection with blue sky qualification of any of
the Registrable Securities) and compliance with the rules of the NASD, (iii) all
expenses of any Persons in preparing or assisting in preparing, word processing,
printing and distributing any Registration Statement, any Prospectus and any
amendments or supplements thereto, and in preparing or assisting in preparing,
printing and distributing any underwriting agreements, securities sales
agreements and other documents relating to the performance of and compliance
with this Agreement, (iv) all rating agency fees, (v) the fees and disbursements
of counsel for the Company and of the independent certified public accountants
of the Company, including the expenses of any "cold comfort" letters required by
or incident to such performance and compliance, (vi) the fees and expenses of
any exchange agent or custodian, (vii) all fees and expenses incurred in
connection with the listing, if any, of any of the Registrable Securities on any
securities exchange or exchanges, (viii) the reasonable fees and expenses of any
special experts retained by the Company in connection with any Registration
Statement, and (v) the reasonable fees and expenses of one special legal counsel
for Holder.
(h) The term "Registration Statement" shall mean any
Registration Statement of the Company that covers any of the Registrable
Securities pursuant to the provisions of this Agreement, and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
(i) The term "Securities Act" means the Securities Act of
1933, as amended.
(j) The term "SEC" means the Securities and Exchange
Commission.
2. Piggyback Registration Rights.
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(a) Whenever securities of the Company are to be registered
under the Securities Act (other than on a registration statement related to any
employee benefit plan, acquisition or corporate reorganization) (a "Piggyback
Registration"), the Company will: (i) promptly give to the Holder written notice
thereof (in any event within three business days after its receipt of notice of
any exercise of demand registration rights by any holder of the Company's
securities and at least 40 days prior to the filing of any registration
statement), which notice shall include a list of the jurisdictions in which the
Company intends to attempt to qualify its Common Stock under the applicable blue
sky or other state securities laws; and (ii) use its best efforts to cause to be
included in such registration under the Securities Act (and any related
qualification under blue sky laws or other compliance) and in any underwriting
involved therein, all of the Registrable Securities specified in a written
request made within 30 days after receipt of such written notice from the
Company by the Holder.
(b) If, in connection with a Piggyback Registration that is an
underwritten primary registration on behalf of the Company, the managing
underwriter shall impose a limitation on the number of shares of Common Stock
which may be included in the Registration Statement because, in its judgment,
such limitation is necessary to effect an orderly public distribution, then the
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number of shares of Common Stock that may be included in such Registration
Statement shall be apportioned in the following priority: (i) first, the shares
of Common Stock the Company proposes to sell under the Registration Statement;
(ii) second shares of Common Stock Madison Run, LLC or Madison Run Holdings, LLC
proposes to sell under the Registration Statement pursuant to registration
rights possessed by those entities as of the date hereof, (iii) third the
Registrable Securities requested to be included in such Registration Statement
by the Holder; and (iv) fourth, other shares of Common Stock requested to be
included in such Registration Statement by any other selling stockholder. The
Company shall not be required by this Section 2(b) to reduce the number of
shares of Common Stock to be offered by the Company in such Registration
Statement for any reason.
(c) If, in connection with a Piggyback Registration that is an
underwritten secondary registration on behalf of holders of the Company's
securities (the "Initiating Securityholders"), the managing underwriter shall
impose a limitation on the number of shares of Common Stock which may be
included in the Registration Statement because, in its judgment, such limitation
is necessary to effect an orderly public distribution, then the number of shares
of Common Stock that may be included in such Registration Statement shall be
apportioned in the following priority: (i) first, B, shares of Common Stock
Madison Run, LLC or Madison Run Holdings, LLC proposes to sell under the
Registration Statement pursuant to registration rights possessed by those
entities as of the date hereof; second, the Registrable Securities owned by the
Holder, and (iii) third, other shares of Common Stock requested to be included
in such Registration Statement by any other selling stockholder.
3. Effectiveness.
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A Registration Statement pursuant to which any Registrable Securities
are being offered will not be deemed to have become effective unless it has been
declared effective by the SEC; provided, however, that if, after it has been
declared effective, the offering of the Registrable Securities pursuant to such
Registration Statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or court, such
Registration Statement will be deemed not to have been effective during the
period of such interference, until the offering of Registrable Securities
pursuant to such Registration Statement may legally resume. The Company will be
deemed not to have used best efforts to cause the Registration Statement to
become, or to remain, effective during the requisite period if it voluntarily
takes any action that would result in any such Registration Statement not being
declared effective or that would result in the Holder not being able to offer
and sell the Registrable Securities during that period unless such action is
required by applicable laws and regulations or currently prevailing
interpretations of the staff of the SEC. The Company shall use best efforts to
maintain the effectiveness for up to 120 days (or such shorter period of time as
the underwriters need to complete the distribution of the registered offering)
of any Registration Statement pursuant to which any of the Registrable
Securities are being offered, and from time to time will amend or supplement
such Registration Statement and the Prospectus contained therein to the extent
necessary to comply with the Securities Act and any applicable state securities
laws or regulations. The Company shall also provide the Holder with as many
copies of the Prospectus contained in any such Registration Statement as the
Holder may reasonably request.
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4. Expenses of Registration.
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All Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to this Agreement shall be borne by the
Company. Except as provided herein, the Holder shall pay all underwriters' fees,
discounts or commissions or transfer taxes, if any, relating to the sale or
disposition of the Holder's Registrable Securities.
5. Registration Procedures.
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In the case of each registration, qualification, or compliance effected
by the Company pursuant to this Agreement, the Company will keep the Holder
advised in writing as to the initiation of each registration, qualification and
compliance and as to the completion thereof. At its expense, the Company will:
(a) Prepare and file with the SEC a Registration Statement
with respect to such Registrable Securities as described in Section 2 and use
its best efforts to cause such Registration Statement to become effective and to
remain effective in accordance with Section 3 (provided that at least five
business days before filing a Registration Statement or Prospectus or any
amendments or supplements thereto, the Company will furnish to the counsel
selected by the Holder copies of all such documents proposed to be filed, which
documents will be subject to the review of such counsel);
(b) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and
current for a period of not less than 120 days and comply with the provisions of
the Securities Act with respect to the disposition of all securities covered by
such Registration Statement during such period in accordance with the intended
methods of disposition by the sellers thereof as set forth in such Registration
Statement;
(c) (i) Furnish to the Holder, and to each underwriter, if
any, without charge, such number of copies of such Registration Statement, each
amendment and supplement thereto, the Prospectus included in such Registration
Statement (including each preliminary Prospectus), and such other documents as
the Holder or underwriters may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by the Holder; and (ii) consent
to the use of the Prospectus or any amendment or supplement thereto by the
Holder of Registrable Securities included in the Registration Statement in
connection with the offering and sale of the Registrable Securities covered by
the Prospectus or any amendment or supplement thereto;
(d) Use its best efforts to register or qualify such
Registrable Securities under all applicable securities or blue sky laws of such
jurisdictions of the United States by the time the applicable Registration
Statement is declared effective by the SEC as the Holder and any underwriters
reasonably request in writing and do any other related acts which may be
reasonably necessary or advisable to enable the Holder and underwriters to
consummate the disposition in such jurisdictions of the Registrable Securities;
provided, however, that the Company shall not be required to (i) qualify as a
foreign corporation or as a dealer in securities in any jurisdiction where it
would not otherwise be required to qualify but for this Section 5(d), (ii) file
any general consent to service of process in any jurisdiction where it would not
otherwise be subject to such service of process, or (iii) subject itself to
taxation in any such jurisdiction if it is not then so subject;
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(e) Notify the Holder, its counsel, and the managing
underwriters, if any, promptly, and promptly confirm such notice in writing, (i)
at any time when a Prospectus relating thereto is required to be delivered under
the Securities Act, of the happening of any event as a result of which, or the
fact that, the Prospectus included in such Registration Statement contains an
untrue statement of a material fact or omits any fact necessary to make the
statements therein not misleading, and, at the reasonable request of a majority
of the Holders, the Company will prepare a supplement or amendment to such
Prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such Prospectus will not contain any untrue statement of
a material fact or omit to state any fact necessary to make the statements
therein not misleading; (ii) when a Registration Statement has become effective
and when any post-effective amendments and supplements thereto become effective,
(iii) of any request by the SEC or any state securities authority for amendments
and supplements to a Registration Statement or Prospectus or for additional
information after the Registration Statement has become effective, (iv) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the qualification of
the Registrable Securities or the initiation of any proceedings for that
purpose, (v) if, between the effective date of a Registration Statement and the
closing of any sale of Registrable Securities covered thereby, the
representations and warranties of the Company contained in any underwriting or
purchase agreement, securities sales agreement or other similar agreement, if
any, cease to be true and correct in all material respects, and (vi) the
Company's reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate;
(f) If applicable, use its best efforts to cause all such
Registrable Securities to be listed or quoted on each securities exchange or
interdealer quotation system on which similar securities issued by the Company
are then listed or quoted;
(g) Provide a transfer agent for all such Registrable
Securities not later than the effective date of such Registration Statement;
(h) Enter into such customary agreements (including
underwriting agreements on customary terms) and take all such other actions as
the underwriter, if any, reasonably requests in order to expedite or facilitate
the disposition of such Registrable Securities;
(i) Obtain for delivery to the Company and the managing
underwriters, if any, with copies to the Holders of the Registrable Securities
being registered, (i) an opinion of legal counsel representing the Company in
customary form and covering such matters of the type customarily covered by
legal opinions of company counsel in public offerings as the Holders shall
reasonably request, dated on the date or dates provided for in the underwriting
agreement and (ii) a comfort letter from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by comfort letters as the Holders shall reasonably request, dated the
effective date of the Registration Statement and brought down to the closing;
(j) If necessary, obtain a CUSIP number for the Registrable
Securities not later than the effective date of the Registration Statement;
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(k) Make available for inspection by the Holder, any
underwriter participating in any disposition pursuant to such Registration
Statement and any attorney, accountant or any other agent retained by the Holder
or any such underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably requested by the
Holder, any such underwriter, attorney, accountant or agent in connection with
such Registration Statement;
(l) Cooperate with the Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold and not bearing any restrictive legends and registered in such names as
the Holder or the underwriters may reasonably request at least two business days
prior to the closing of any sale of Registrable Securities pursuant to such
Registration Statement;
(m) Upon the occurrence of any circumstance contemplated by
Section 5(e)(iii), 5(e)(iv), or 5(e)(v) hereof, use best efforts to prepare a
supplement or post-effective amendment to such Registration Statement or the
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, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; and to notify the Holder to suspend use of the Prospectus
as promptly as practicable after the occurrence of such an event, and the Holder
hereby agrees to suspend use of the Prospectus until the Company has amended or
supplemented the Prospectus to correct such misstatement or omission;
(n) Cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
NASD; and
(o) Use best efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by a Registration
Statement contemplated hereby.
6. Indemnification and Contribution.
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(a) In connection with any Registration Statement, the Company
shall indemnify and hold harmless each Holder and each underwriter who
participates in an offering of the Registrable Securities, each Person, if any,
who controls any of such parties within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and each of their respective
directors, officers, employees and agents, as follows:
(i) from and against any and all loss, liability,
claim, damage and expense whatsoever, joint or several, as incurred,
arising out of or based upon any of the following statements, omissions
or violations (a "Violation"): (A) any untrue statement or alleged
untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) covering Registrable Securities,
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; (B) any untrue statement or alleged untrue statement of a
material fact contained in any Prospectus (including any preliminary or
final Prospectus or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; or (C) any violation or alleged violation by the Company of
the Securities Act, the Exchange Act, any state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange
Act or any state securities law;
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(ii) from and against any and all loss, liability,
claim, damage and expense whatsoever, joint or several, as incurred, to
the extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any court or
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such Violation, if such settlement is
effected with the prior written consent of the Company, which consent
shall not be unreasonably withheld; and
(iii) from and against any and all expenses
whatsoever, as incurred (including reasonable fees and disbursements of
counsel chosen by Holder or any underwriter (except to the extent
otherwise expressly provided in Section 6(c) hereof)), incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any court or governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any
such Violation, to the extent that any such expense is not paid under
subparagraph (i) or (ii) of this Section 6(a);
provided, however, that (i) this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of a Violation
that occurs in reliance upon and in conformity with written information
furnished in writing to the Company by the Holder, or any underwriter with
respect to the Holder, as the case may be, expressly for use in a Registration
Statement (or any amendment thereto) or any Prospectus (including any
preliminary or final Prospectus or any amendment or supplement thereto) and (ii)
the Company shall not be liable to the Holder, any underwriter or controlling
Person, with respect to any untrue statement or alleged untrue statement or
omission or alleged omission in any preliminary Prospectus to the extent that
any such loss, liability, claim, damage or expense of the Holder, any
underwriter or controlling Person results from the fact that the Holder or any
underwriter, sold Registrable Securities to a Person to whom there was not sent
or given, at or prior to the written confirmation of such sale, a copy of the
final Prospectus as then amended or supplemented if the Company had previously
furnished copies thereof to the Holder or any underwriter or controlling Person
and the loss, liability, claim, damage or expense of the Holder or underwriter,
or controlling Person results from an untrue statement or omission of a material
fact contained in the preliminary Prospectus which was corrected in the final
Prospectus. Any amounts advanced by the Company to an indemnified party pursuant
to this Section 6 as a result of such losses shall be returned to the Company if
it shall be finally determined by such a court in a judgment not subject to
appeal or final review that such indemnified party was not entitled to
indemnification by the Company.
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(b) A selling Holder agrees to indemnify and hold harmless the
Company, any underwriter and each of their respective directors, officers
(including each officer of the Company who signed the Registration Statement),
employees and agents, or any other selling Holder within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, from and against any
and all loss, liability, claim, damage and expense whatsoever described in the
indemnity contained in Section 6(a) hereof, as incurred, but only with respect
to a Violation that occurs in reliance upon and in conformity with written
information furnished to the Company by such selling Holder with respect to such
Holder expressly for use in such Registration Statement, or any such Prospectus;
provided, however, that the obligations of any such Holder hereunder shall be
limited to the proceeds received by such Holder from the sale of Registrable
Securities contemplated herein.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers properly
served on such indemnified party, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability which it may have
under this Section 6, except to the extent that it is materially prejudiced by
such failure. An indemnifying party may participate at its own expense in the
defense of such action, or, if it so elects within a reasonable time after
receipt of such notice, assume the defense of any suit brought to enforce any
such claim; but if it so elects to assume the defense, such defense shall be
conducted by counsel chosen by it and approved by the indemnified party or
parties, which approval shall not be unreasonably withheld. In the event that an
indemnifying party elects to assume the defense of any such suit and retain such
counsel, the indemnified party or parties shall bear the fees and expenses of
any additional counsel thereafter retained by such indemnified party or parties;
provided, however, that the indemnified party or parties shall have the right to
employ counsel (in addition to local counsel) to represent the indemnified party
or parties who may be subject to liability arising out of any action in respect
of which indemnity may be sought against the indemnifying party if, in the
reasonable judgment of counsel for the indemnified party or parties, there may
be legal defenses available to such indemnified party or parties which are
different from or in addition to those available to the indemnifying party, in
which event the fees and expenses of appropriate separate counsel shall be borne
by the indemnifying party. In no event shall the indemnifying parties be liable
for the fees and expenses of more than one counsel (in addition to local
counsel), separate from its own counsel, for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release in form and substance satisfactory to the
indemnified parties of each indemnified party from all liability arising out of
such litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
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(d) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 6 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company and the Holder
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by such indemnity agreement incurred by the
Company and the Holder, as incurred; provided, that no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person that was not
guilty of such fraudulent misrepresentation. As between the Company and the
Holder, such parties shall contribute to such aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement in such proportion as shall be appropriate to reflect the relative
fault of the Company, on the one hand, and the Holder, on the other hand, with
respect to the statements or omissions which resulted in such loss, liability,
claim, damage or expense, or action in respect thereof, as well as any other
relevant equitable considerations. The relative fault of the Company, on the one
hand, and of the Holder, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or by or on behalf of the
Holder, on the other, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Holder agree that it would not be just and equitable if
contribution pursuant to this Section 6 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the relevant equitable considerations. For purposes of this Section 6, each
affiliate of the Holder, and each director, officer, employee, agent and Person,
if any, who controls a Holder or such affiliate within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Holder, and each director of the Company, each
officer of the Company who signed the Registration Statement, and each Person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company. In no event shall the Holder be liable for an
amount in excess of the proceeds it receives from the offering.
(e) The obligations of the Company and the Holders under this
Section 6 shall survive the completion of an offering of Registrable Securities
pursuant to a Registration Statement. Notwithstanding the foregoing, to the
extent that the indemnification and contribution provisions contained in the
underwriting agreement executed in connection with such Registration Statement
conflict with the foregoing provisions, the provisions in such underwriting
agreement shall control.
7. Information by Holder.
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The Holder of Registrable Securities included in any registration shall
furnish to the Company such written information regarding Holder and the
distribution proposed by Holder as the Company may reasonably request in writing
and as shall be required in connection with any registration, qualification, or
compliance referred to in this paragraph.
8. Suspension Rights.
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The Company shall have the right, which right may be exercised by the
Company only twice during any 12-month period, to extend, suspend or delay the
effectiveness of any Registration Statement for a period of up to 90 days if,
upon advice of counsel to the Company, effectiveness of such Registration
Statement would interfere with any then currently active acquisition, financing
or similar transaction of the Company by requiring the premature disclosure of
any material non-public corporate development.
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9. Postponement Rights.
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The Company shall have the right to postpone the filing of any
Registration Statement for up to three periods of 30 days if, upon advice of
counsel to the Company, the filing of such Registration Statement would
interfere with any then currently active acquisition, financing or similar
transaction of the Company by requiring the premature disclosure of any material
non-public information or because the Company's Board of Directors determines in
good faith that it would be seriously detrimental to the Company and its
stockholders for such Registration Statement to be filed.
10. No Note Registration Rights.
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Nothing in this Agreement shall be construed to impose on the Company
any obligations or duties as to the registration of the Note nor grant any
holder of the Note any registration rights enforceable against the Company with
respect to the Note prior to such Note being converted to Common Stock.
11. Lock-Up Arrangements.
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Upon the consummation of an underwritten public offering yielding gross
proceeds to the Company of at least $5,000,000 (a "Public Offering") the Holder
agrees that upon the reasonable request of the managing underwriter selected for
the Public Offering the Holder will allow for restrictions on sales of its
shares pursuant to the Registration Statement for the period selected by the
managing underwriter (not to exceed 180 days in any event), including without
limitation, at a minimum, not to sell, make any short sale of, pledge, grant any
option for the purchase of or otherwise dispose of or reduce its risk of
ownership with respect to any Registrable Securities (other than those included
in the registration) or other securities of the Company without the prior
written consent of the Company or the managing underwriter, as the case may be.
Additionally, Holder agrees to execute and deliver a lock-up letter (setting
forth the above restrictions in greater detail) if requested by the managing
underwriter or the Company in connection with any offering of Registrable
Securities; provided that all members of management and all other major
stockholders are required to execute and deliver a substantially similar letter.
12. Termination of Obligations.
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The right of Holder to request inclusion in any registration pursuant
to Section 2 hereof shall terminate on the date that all shares of Registrable
Securities held or entitled to be held on conversion by such Holder may
immediately be sold without restriction (including volume limitations) under
Rule 144 promulgated under the Securities Act during any 90-day period.
13. Compliance with Rule 144.
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With a view to making available to Holder the benefits of Rule 144
promulgated under the Securities Act and any other rule or regulation of the SEC
that may at any time permit Holder to sell securities of the Company to the
public without registration, the Company agrees to use its best efforts to (i)
make available to the public and to the Holder such information as will enable
Holder to make sales pursuant to Rule 144 and (ii) file with the SEC in a timely
manner all reports and other documents required of the Company under the
Exchange Act.
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14. Changes in Capital Stock.
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If, and as often as, there is any change in the Common Stock by way of
a stock split, stock dividend, combination or reclassification, or through a
merger, consolidation, reorganization or recapitalization, or by any other
means, appropriate adjustment shall be made in the provisions hereof so that the
rights and privileges granted hereby shall continue with respect to the
Registrable Shares as so changed.
15. Governing Law.
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This Agreement shall be governed by and construed in accordance with
the laws of Alabama, without regard to the conflict of laws provisions thereof.
16. Amendment.
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Any modification, amendment or waiver of this Agreement or any
provision hereof shall be in writing executed by Holder and the Company.
17. Severability.
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In the event that any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
18. Successors and Assigns.
-----------------------
This Agreement shall inure to the benefit of and be binding upon the
respective heirs, successors, assigns and transferees of the parties hereto,
including, without limitation and without the need for an express assignment,
subsequent holders of any of the Registrable Securities, who each shall be
deemed a "Holder" under this Agreement. If any transferee of Holder shall
acquire Registrable Securities, in any manner, whether by operation of law,
express assignment or otherwise, such Registrable Securities shall be held
subject to all of the terms of this Agreement, and by taking and holding such
Registrable Securities, such Person shall be conclusively deemed to have agreed
to be bound by and to perform all of the terms and provisions of this Agreement
and such Person shall be entitled to receive all of the the benefits hereof.
19. Entire Agreement.
-----------------
This Agreement and the other writings referred to herein contain the
entire understandings among the parties with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings among the parties
with respect to its subject matter.
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20. Headings.
---------
The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
21. Counterparts.
-------------
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.
IN WITNESS WHEREOF, the undersigned Holder and the Company have
executed this Agreement on the day and year first above written.
COMPANY: DIGITAL FUSION, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇, III
--------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇ III
Title: Chief Executive Officer
HOLDER: /w/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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