EXHIBIT 4.9
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of
June 30, 1998 between ABLE TELCOM HOLDING CORP., a Florida corporation with
offices at 0000 Xxxxx Xxxxx, Xxxxx 0000, Xxxx Xxxx Xxxxx, Xxxxxxx 00000 (the
"Company") and each of the entities listed under "Investors" on the signature
page hereto (each an "Investor" and collectively the "Investors"), each with
offices at the address listed under such Investor's name on Schedule I hereto.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Convertible Preferred Stock Purchase
Agreement by and between the Company and the Investors dated as of June 26,
1998 (the "Purchase Agreement"), the Company initially has agreed to sell and
issue to the Investors, and the Investors have agreed to purchase from the
Company, an aggregate of 4,000 shares of Series B Preferred Stock (the "Series B
Preferred Stock",) at an aggregate price of $20,000,000 on the terms and
conditions set forth therein;
WHEREAS, the Purchase Agreement contemplates that the Series B
Preferred Stock will be convertible into shares (the "Common Shares") of common
stock, $0.001 par value, of the Company ("Common Stock") pursuant to the terms
and conditions set forth in the Articles of Amendment to the Articles of
Incorporation of Able Telcom Holding Corp. (the "Articles of Amendment"); and
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investors' agreement to enter into the Purchase Agreement, the Company has
agreed to issue to the Investors warrants exercisable for 350,000 shares of
Common Stock in the form attached as EXHIBIT 1.1B;
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the Purchase
Agreement and this Agreement, the Company and the Investors agree as follows:
1. CERTAIN DEFINITIONS. Capitalized terms used herein and not otherwise
defined shall have the meaning ascribed thereto in the Purchase Agreement,
Warrants or the Articles of Amendment. As used in this Agreement, the following
terms shall have the following respective meanings:
"CLOSING" and "CLOSING DATE" shall have the meanings ascribed
to such terms in the Purchase Agreement.
"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 Common Shares and
Warrants Shares issued to each Holder or its permitted transferee or designee
upon conversion of the Series B Preferred Stock or exercise of the Warrants, as
applicable, or upon any stock split, stock dividend,
recapitalization or similar event with respect to such Common Shares or Warrant
Shares; (ii) any securities issued or issuable to each Holder upon the
conversion, exercise or exchange of any Series B Preferred Stock, Warrants,
Warrant Shares, or Common Shares; and (iii) 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 an Investor or the
Investors, respectively, and any transferee of the Series B Preferred Stock,
Warrants, Warrant Shares or Common 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.
"WARRANTS" shall mean the warrants in form and substance of
EXHIBIT 1.1B to the Purchase Agreement between the Company and the Investors
dated as of the date hereof.
"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 on an Approved Market. Such best
efforts by the Company shall include the following:
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(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 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 conversion in full of the Series B Preferred
Stock or exercise of the Warrants (i) to prevent dilution resulting from stock
splits, stock dividends or similar transactions or (ii) by reason of changes in
the Conversion 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 120 days following the Closing Date.
The number of shares of Common Stock initially included in such Registration
Statement shall be no less than 200% of the number of Conversion Shares and 150%
of the number of Warrant Shares that are then issuable upon conversion of the
Series B Preferred Stock and the exercise of the Warrants, without regard to any
limitation on the Investor's ability to convert the Preferred Stock or 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 conversion of the Preferred Stock and
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 conversion of the
Series B Preferred Stock 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. The provisions of Section
2(b)(i) below shall be applicable with respect to such obligation, with the one
hundred and twenty (120) days running from the day after the date on which the
Company reasonably first determines (or reasonably should have determined) the
need therefor.
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(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 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.
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(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 Investors, the Investor's beneficial
ownership of securities of the Company or the Investors' intended method of
disposition of Registrable Securities shall conform to the information provided
to the Company by each of the Investors.
(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.
(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 an Investor 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 an
Investor is sought in or by a court of governmental body of competent
jurisdiction or through other means, give prompt notice to such Investor prior
to making such disclosure, and allow the Investor, 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 Investors
who hold 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 pusuant 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 Investors may reasonably request and registered in
such names as the managing underwriter or underwriters, if any, or the Investors
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 Investors whose Registrable Securities are included in
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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.
(xv) The Company shall take all other reasonable
actions necessary to expedite and facilitate disposition by the Investors 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 the Articles of Amendment, the Purchase
Agreement and 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, provide a remedy to the Investors if an
Interfering Event occurs and provide that the Investors may require that the
Company redeem outstanding shares, of Series B Preferred Stock at a specified
price if certain Interfering Events are not timely cured.
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 Investors to redeem
outstanding shares of Series B Preferred Stock at a specified price.
Paragraph (vi) provides, INTER ALIA, that the
Investors 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 of the initial closing of the Purchase Agreement (the
"Closing Date") and shall use its best efforts to cause such Registration
Statement to become effective as soon as possible and in any event within 120
days from the Closing Date. In the event that such Registration Statement has
not been declared effective within
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120 days from the Closing Date, then the Conversion Price (as defined in Section
3(b) of the Articles of Amendment) shall be reduced by 1% of the Conversion
Price on such 120th day after the Closing Date during and after the 30-day
period ("Default Period") from and after the 120th day following the Closing
Date 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. For example, if the Registration Statement does not become
effective until 160 days from the Closing Date, the Conversion Price during days
121 through 149 shall be equal to 99% of the Conversion Price. The Conversion
Price from and after day number 150 after the Closing Date shall be equal to
97.5% of the Conversion Price. In each case, the Conversion Price shall be
subject to further adjustment as set forth in the Articles of Amendment. If the
Registration Statement has not been declared effective within 180 days after the
Closing Date, then each Holder shall have the right to redemption of its
Preferred Shares by the Company in accordance with Sections 4(b), 4(d)(i) and
4(f) of the Articles of Amendment.
(ii) NO LISTING; PREMIUM PRICE REDEMPTION FOR
DELISTING OF CLASS OF SHARES.
(A) 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 120th day
following the Closing Date and (ii) the date the Registration Statement is
declared effective by the SEC, until the Maturity Date (provided that such date
shall be deferred 1.5 days for each day that there is no Effective
Registration), then the Company shall pay in cash to each Holder a default
payment in an amount equal to three percent (3%) of the aggregate Liquidation
Value represented by the Series B Preferred Shares held by such Holder 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
(B) In the event that shares of Common Stock
of the Company are delisted from the Approved Market at any time following the
Closing Date and remain delisted for five (5) consecutive trading days, then at
the option of each Holder and to the extent such Holder so elects, the Company
shall redeem the Series B Preferred Stock and/or Common Shares and/or Warrant
Shares held by such Holder, in whole or in part, in accordance with Sections
4(b), 4(d)(iii) and 4(f) of the Articles of Amendment; provided, however, that
such Holder may revoke such request at any time prior to receipt of such payment
of such redemption price. Default payments shall no longer accrue on Series B
Preferred Shares after such shares have been redeemed by the Company pursuant to
the foregoing provision.
(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
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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
Liquidation Value for the Series B Preferred Shares held by such holder for each
30-day period from and after the expiration of the Suspension Grace Period. At
any time after the fifth day following the expiration of the Suspension Grace
Period, a Holder shall have the right to have the Company redeem its Series B
Preferred Stock in accordance with Sections 4(b), 4(d)(ii) and 4(f) of the
Articles of Amendment.
(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 Conversion Notice (as defined in the
Articles of Amendment) 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 Articles of Amendment for any
reason after receipt of a Conversion Notice, then:
(A) The Company shall pay in cash to each
Holder an amount equal to three percent (3%) of the Liquidation Value for the
Series B Preferred Shares held by such Holder 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 Articles of Amendment; and
(B) At any time five days after the
commencement of the running of the first 30-day period described above in clause
(A) of this paragraph (iv), at the request of any Holder pursuant to a
redemption notice, the Company promptly (1) shall purchase from such Holder, at
a purchase price equal to 130% of the Liquidation Value (the "Premium Redemption
Price"), the number of Series B Preferred Shares equal to such Holder's pro
rata share of the "Deficiency", as such terms are defined below, if the failure
to issue Common Shares results from the lack of a sufficient number thereof and
(2) shall purchase all (or such portion as such Holder may elect) of such
Holder's Series B Preferred Stock at such Premium Redemption Price if the
failure to issue Common Shares results from any other cause. The "Deficiency"
shall be equal to the number of Series B Preferred Shares that would not be able
to be converted for Common Shares, due to an insufficient number of Common
Shares available, if all the outstanding Series B Preferred Shares were
submitted for conversion at the Conversion Price set forth in the Articles of
Amendment as of the date such Deficiency is determined. Any request by a Holder
pursuant to this paragraph (iv)(B) shall be revocable by that Holder at any time
prior to its receipt of the Premium Redemption Price.
(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
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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 (lOth) day of each
calendar month for each partial or full 30-day period occurring prior to that
date.
(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 Series B Preferred Stock, Common Shares and/or 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
the Premium Redemption Price (as defined above), provided that such Holder may
revoke such request at any time prior to receipt of such payment of such
purchase price. Until such time as the Company purchases such Series B Preferred
Shares at the request of such Holder pursuant to the preceding sentence, at any
Holder's request and option the Company shall as to such Holder pay such amount
by adding and including the amount of such default payment to the Conversion
Amount and the Liquidation Value instead of in cash.
(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 Articles of Amendment, the Purchase Agreement, 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.
(vii) DEFERRAL OF MATURITY DATE. In the event of a
failure of Effective Registration, including without limitation by reason of any
of the circumstances described in the foregoing clauses (i) through (iv) above,
then the Maturity Date (as defined in the Articles of Amendment) shall be
deferred by 1.5 days for each day that any of the circumstances in clauses (i),
(ii), (iii) (without regard to the applicability of the Suspension Grace
Period), or (iv) exist
(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
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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 Investor who is entitled to registration rights under this Section
2(e) written notice of such determination and, if within fifteen (15) days after
the effective date of such notice, such Investor shall so request in writing,
the Company shall include in such Registration Statement all or any part of the
Registrable Securities such Investor 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
Investor has requested inclusion hereunder as the underwriter shall permit. Any
exclusion of Registrable Securities shall be made pro rata among the Investors
seeking to include Registrable Securities in proportion to the number of
Registrable Securities sought to be include by such Investors; 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 an Investor is entitled to registration under
this Section 2(e) is an underwritten offering, then each Investor 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
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the contrary set forth herein, the registration rights of the Investors 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).
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).
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(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, 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
-12-
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 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.
8. 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 the Purchase 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 Investor shall be included without alteration in the Registration
Statement covering the Registrable
-13-
Securities and shall not be changed without written consent of such Holder or
its designated 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.
11. REPLACEMENT CERTIFICATES. The certificate(s) representing the
Common Shares or Warrant Shares held by any Investor (or then Holder) may be
exchanged by such 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 such
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 Investors 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 Series B Preferred Shares or Warrants which transfer has been
effected in compliance with the Articles of Amendment and Warrants, and all
other rights granted to the Investors by the Company hereunder may be
transferred or assigned to any transferee or assignee of any Series B Preferred
Shares or Warrants; provided in each case that the Company must be given written
notice by the such 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 Investors 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 EACH OF THE INVESTORS (I)
HEREBY IRREVOCABLY SUBMITS 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 WAIVES,
AND AGREES 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 EACH OF THE
INVESTORS CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR
PROCEEDING
-14-
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:
to the Company:
Able Telcom Holding Corp.
0000 Xxxxx Xxxxx
Xxxxx 0000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, President
with copies to:
Gunster, Yoakley, Xxxxxx-Xxxxx & Xxxxxxx, P.A.
Xxxxxxxx Point, Suite 500 East
000 Xxxxx Xxxxxxx Xxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
to the Investors:
For Palladin Partners I, L.P., Halifax Fund L.P., The
Gleneagles Fund, Palladin Overseas Fund Limited,
Colonial Penn Life Insurance Company and Palladin
Securities, L.L.C.
c/o The Palladin Group, as Attorney-in-Fact
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
For RCG International Investors, LDC
c/o Xxxx Xxxx Capital Management, L.P.
0 Xxxx Xxxxx Xxxx, Xxxxx 000
000 Xx. Xxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Facsimile: (000)000-0000
-15-
with copies to:
Xxxxxx & Xxxxxx
000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: X. Xxxxxxxxx Xxxxxx, 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.
(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 any 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.
(g) ENTIRE AGREEMENT. This Agreement, together with the
Purchase Agreement, the Articles of Amendment and 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) SEVERABILITY. The parties acknowledge and agree that the
Investors are not agents, affiliates or partners of each other, that all
representations, warranties, covenants and agreements of the Investors hereunder
are several and not joint, that no Investor shall have any responsibility or
liability for the representations, warrants, agreements, acts or omissions of
any other Investor, and that any rights granted to "Investors" hereunder shall
be enforceable by each Investor hereunder.
(j) JURY TRIAL. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL
BY JURY.
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(k) 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]
-17-
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: /s/ XXXX X. XXXXX
---------------------------------------------
Name: Xxxx X. Xxxxx
Title: Chief Financial Officer
INVESTORS:
--------------------------------------------
RGC INTERNATIONAL INVESTORS, LDC
By: Xxxx Xxxx Capital Management, L.P.
Investment Manager
By: RGC General Partner Corp, as
General Partner
By: /s/ XXXXX XXXXX
---------------------------------
Xxxxx Xxxxx
Mananging Director
/s/ XXXXXX X. XXXXXXX
--------------------------------------------
PALLADIN SECURITIES L.L.C.
By: The Palladin Group, as Attorney-in-
Fact and Investment Advisor
By:
/s/ XXXXXX X. XXXXXXX
--------------------------------------------
HALIFAX FUND, L.P.
By: The Palladin Group, as Attorney-in-
Fact and Investment Advisor
By:
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/s/ XXXXXX X. XXXXXXX
-----------------------------------------
PALLADIN PARTNERS I, L.P.
By: Palladin Asset Management LLC as
Attorney-in-Fact
By:
/s/ XXXXXX X. XXXXXXX
-----------------------------------------
THE GLENEAGLES FUND COMPANY
By: The Palladin Group, as Attorney-in-Fact
and Investment Advisor
By:
/s/ XXXXXX X. XXXXXXX
-----------------------------------------
LADIN OVERSEAS FUND LIMITED
By: The Palladin Group, as Attorney-in-Fact
and Investment Advisor
By:
/s/ XXXXXX X. XXXXXXX
-----------------------------------------
COLONIAL PENN LIFE INSURANCE
COMPANY
By: The Palladin Group, as Attorney-in-Fact
and Investment Advisor
By:
[Signature page to Able Telecom Holding Corp. Registration Rights Agreement]
-19-
SCHEDULE 1
Palladin Securities L.L.C.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Halifax Fund, L.P.
x/x Xxxxx Xxxx Xxxxxxxx (Xxxxxx
Xxxxxxx) Ltd.
Xxxxxxxxx Xxxxxx, Xxxx Xxx Xxxx
X.X. Xxx 00000 SMB
Grand Cayman, Cayman Islands
Palladin Partners I, L.P.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
The Gleneagles Fund
x/x Xxxxx Xxxx Xxxxxxxx (Xxxxxx
Xxxxxxx) Ltd.
Xxxxxxxxx Xxxxxx, Xxxx Xxx Xxxx
X.X. Xxx 00000 SMB
Grand Cayman, Cayman Islands
Palladin Overseas Fund Limited
x/x Xxxxx Xxxx Xxxxxxxx (Xxxxxx
Xxxxxxx) Ltd.
Xxxxxxxxx Xxxxxx, Xxxx Xxx Xxxx
X.X. Xxx 00000 SMB
Grand Cayman, Cayman Islands
Colonial Penn Life Insurance Company
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
RCG International Investors, LDC
c/o Xxxx Xxxx Capital Management, L.P.
0 Xxxx Xxxxx Xxxx, Xxxxx 000
000 Xx. Xxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
-20-
