REGISTRATION RIGHTS AGREEMENT
Exhibit
4.15
Execution
Copy
This
Registration Rights Agreement (this “Agreement”) is made and entered into as of
August 24, 2005, by and between Magnetech Integrated Services Corp., an Indiana
corporation (the “Company”), and Laurus Master Fund, Ltd. (the “Purchaser”).
This
Agreement is made pursuant to the Security and Purchase Agreement, dated as
of
the date hereof, by and among the Purchaser, the Company and various
subsidiaries of the Company (as amended, modified or supplemented from time
to
time, the “Security Agreement”), and pursuant to the Term Note, the Minimum
Borrowing Notes, the Option and the Warrants referred to therein.
The
Company and the Purchaser hereby agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in
the
Security Agreement shall have the meanings given such terms in the Security
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
“Commission”
means
the Securities and Exchange Commission.
“Common
Stock”
means
shares of the Company’s common stock, par value $0.01 per share.
“Effectiveness
Date”
means,
(i) with respect to the Registration Statement required to be filed in
connection with the Term Note issued on the initial funding date under the
Security Agreement and the Minimum Borrowing Note issued on the initial funding
date under the Security Agreement and the Warrants and the Option issued on
such
initial funding date, a date no later than one hundred fifty (150) days
following such initial funding date and (ii) with respect to each additional
Registration Statement required to be filed hereunder, a date no later than
sixty (60) days following the applicable Filing Date.
“Effectiveness
Period”
has the
meaning set forth in Section 2(a).
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and any successor
statute.
“Filing
Date”
means,
with respect to (1) the Registration Statement which is required to be filed
in
connection with the shares of Common Stock issuable upon conversion of Term
Note
issued on the initial funding date under the Security Agreement and the Minimum
Borrowing Note issued on the initial funding date under the Security Agreement,
the date which is sixty (60) days after the date hereof, (2) the Registration
Statement required to be filed in connection with each additional Minimum
Borrowing Note funded after the initial funding date, the date which is sixty
(60) days after such funding of such additional Minimum Borrowing Note, (3)
the
Registration Statement required to be filed in connection with the shares of
Common Stock issuable to the Holder upon exercise of a Warrant, the date which
is sixty (60)
days
after the issuance of such Warrant, (4) the Registration Statement required
to
be filed in connection with the shares of Common Stock issuable to the Holder
upon exercise of the Option, the date which is sixty (60) days after the date
hereof, and (5) the Registration Statement required to be filed in connection
with additional shares of Common Stock issuable to the Holder as a result of
adjustments to the Fixed Conversion Price or the Exercise Price, as the case
may
be, made pursuant to Section 3.6 of the Term Note, Section 2.6 of the Revolving
Note, Section 3.6 of the Minimum Borrowing Notes, Section 4 of the Warrant
or
otherwise, or in connection with additional shares of Common Stock issuable
to
the Holder as a result of the occurrence of certain events described in the
any
of the Term Note, the Revolving Note, the Minimum Borrowing Notes, any Warrant
or the Option, sixty (60) days after the occurrence of such event or the date
of
the adjustment of the Fixed Conversion Price or Exercise Price, as the case
may
be.
“Holder”
or
“Holders”
means
the Purchaser or any of its affiliates or transferees to the extent any of
them
hold Registrable Securities (provided such affiliates or transferees execute
a
copy or counterpart or joinder of this Agreement agreeing to be bound by its
terms and conditions), other then those purchasing Registrable Securities in
a
market transaction.
“Indemnified
Party”
has the
meaning set forth in Section 5(c).
“Indemnifying
Party”
has the
meaning set forth in Section 5(c).
“Option”has
the
meaning set forth in the Security Agreement.
“Proceeding”
means an
action, claim, suit, investigation or proceeding (including, without limitation,
an investigation or partial proceeding, such as a deposition), whether commenced
or threatened.
“Prospectus”
means
the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by such Registration Statement,
and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
“Registrable
Securities”
means
the shares of Common Stock issued upon the conversion of each of the Minimum
Borrowing Note and the Term Note and issuable upon exercise of the Warrants
and
the Option.
“Registration
Statement”
means
each registration statement required to be filed hereunder, including the
Prospectus therein, amendments and supplements to such registration statement
or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
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“Rule
144”
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Rule
415”
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Securities
Act”
means
the Securities Act of 1933, as amended, and any successor statute.
“Security
Agreement”
has the
meaning given to such term in the Preamble hereto.
“Term
Note”
has the
meaning set forth in the Security Agreement.
“Trading
Market”
means
any of the NASD Over The Counter Bulletin Board, NASDAQ SmallCap Market, the
NASDAQ National Market, the American Stock Exchange or the New York Stock
Exchange.
“Warrants”
means
the Common Stock purchase warrants issued in connection with the Security
Agreement, whether on the date thereof or thereafter.
2. Registration.
(a) On
or
prior to each Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the Registrable Securities for
a
selling stockholder resale offering to be made on a continuous basis pursuant
to
Rule 415. Each Registration Statement shall be on Form S-3 (except if the
Company is not then eligible to register for resale the Registrable Securities
on Form S-3, in which case such registration shall be on another appropriate
form in accordance herewith). The Company shall use its commercially reasonable
efforts to cause each Registration Statement to be declared effective under
the
Securities Act as promptly as possible after the filing thereof, but in any
event no later than the Effectiveness Date. The Company shall use its
commercially reasonable efforts to keep each Registration Statement continuously
effective under the Securities Act until the date which is the earlier date
of
when (i) all Registrable Securities covered by such Registration Statement
have
been sold or (ii) all Registrable Securities covered by such Registration
Statement may be sold immediately without registration under the Securities
Act
pursuant to Rule 144 (notwithstanding any volume restrictions that may be
applicable under Rule 144), as determined by the counsel to the Company pursuant
to a written opinion letter to such effect, addressed and acceptable to the
Company’s transfer agent and the affected Holders (each, an “Effectiveness
Period”).
(b)
If:
(i) any Registration Statement is not filed on or prior to the applicable Filing
Date for such Registration Statement; (ii) a Registration Statement filed
hereunder is not declared effective by the Commission by the applicable
Effectiveness Date; (iii) after a Registration Statement is filed with and
declared effective by the Commission, a Discontinuation Event (as hereafter
defined) shall occur and be continuing, or such Registration Statement ceases
to
be effective (by suspension or otherwise) as to all Registrable Securities
to
which it is required to relate at any time prior to the expiration of the
Effectiveness Period applicable to such
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Registration
Statement (without being succeeded immediately by an additional Registration
Statement filed and declared effective), for a period of time which shall exceed
30 days in the aggregate per year or more than 20 consecutive calendar days
(defined as a period of 365 days commencing on the date such Registration
Statement is declared effective); or (iv) until such time as the Common Stock
may be sold under Rule 144 outside of a Trading Market, the Common Stock is
not
listed or quoted, or is suspended from trading on any Trading Market for a
period of three (3) consecutive Trading Days (provided the Company shall not
have been able to cure such trading suspension within 30 days of the notice
thereof or list the Common Stock on another Trading Market); (any such failure
or breach being referred to as an “Event,” and for purposes of clause (i) or
(ii) the date on which such Event occurs, or for purposes of clause (iii) the
date which such 30 day or 20 consecutive day period (as the case may be) is
exceeded, or for purposes of clause (iv) the date on which such three (3)
Trading Day period is exceeded, being referred to as “Event Date”), then as
partial relief for the damages to the Purchaser by reason of the occurrence
of
any such Event (which remedy shall not be exclusive of any other remedies
available at law or in equity), the Company shall pay to the Purchaser for
each
day that an Event has occurred and is continuing, an amount in cash equal to
one-thirtieth (1/30th)
of the
product of: (A) the then outstanding principal amount of the Term Note and
each
Minimum Borrowing Note multiplied by (B) 0.01; provided, however, that the
Company shall not be required to pay the damages set forth in this sentence
if
the Event that gave rise to such damages directly arose or directly resulted
from any materially untrue statement to be included in any Registration
Statement or Prospectus, solely to the extent that such materially untrue
statement (I) was furnished in writing to the Company by the Purchaser or any
other Holder and (II) was specifically identified by the Purchaser or any other
Holder to be used in any Registration Statement or Prospectus, as the case
may
be.
(c)
Within three business days of the Effectiveness Date, the Company shall cause
its counsel to issue a blanket opinion substantially in the form attached hereto
as Exhibit
A
(with
customary assumptions, qualifications and limitations), and provided that the
Company’s counsel shall have received any representations letters and other
information reasonably requested to provide such opinion, to the transfer agent
of the Company stating that the shares are subject to an effective registration
statement and can be reissued free of restrictive legend upon notice of a sale
by the Purchaser and confirmation by the Purchaser that it has complied with
the
prospectus delivery requirements, provided that the Company has not advised
the
transfer agent orally or in writing that the opinion has been withdrawn. Copies
of the blanket opinion required by this Section 2(c) shall be delivered to
the
Purchaser within the time frame set forth above.
3. Registration
Procedures.
If and
whenever the Company is required by the provisions hereof to effect the
registration of any Registrable Securities under the Securities Act, the Company
will, as expeditiously as possible:
(a) prepare
and file with the Commission a Registration Statement with respect to such
Registrable Securities, respond as promptly as possible to any comments received
from the Commission, and use its commercially reasonable efforts to cause such
Registration Statement to become and remain effective for the Effectiveness
Period with respect thereto, and to promptly provide to the Purchaser copies
of
all filings and Commission letters of comment relating thereto;
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(b) prepare
and file with the Commission such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith as may
be
necessary to comply with the provisions of the Securities Act with respect
to
the disposition of all Registrable Securities covered by such Registration
Statement and to use its commercially reasonable efforts to keep such
Registration Statement effective until the expiration of the Effectiveness
Period applicable to such Registration Statement;
(c) furnish
to the Purchaser such number of copies of the Registration Statement and the
Prospectus included therein (including each preliminary Prospectus) as the
Purchaser reasonably may request to facilitate the public sale or disposition
of
the Registrable Securities covered by such Registration Statement;
(d) use
its
commercially reasonable efforts to register or qualify the Purchaser’s
Registrable Securities covered by such Registration Statement under the
securities or “blue sky” laws of such jurisdictions within the United States as
the Purchaser may reasonably request, provided, however, that the Company shall
not for any such purpose be required to qualify generally to transact business
as a foreign corporation in any jurisdiction where it is not so qualified or
to
consent to general service of process in any such jurisdiction;
(e) list
the
Registrable Securities covered by such Registration Statement with the Principal
Market on which the Common Stock of the Company is then listed or, if the Common
Stock is not so listed, then on a Principal Market selected by the Company;
(f) immediately
notify the Purchaser at any time when a Prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event of
which
the Company has knowledge as a result of which the Prospectus contained in
such
Registration Statement, as then in effect, includes an untrue statement of
a
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 in such event Purchaser and any other selling
Holders shall discontinue disposition of Registrable Securities under the
applicable Registration Statement until notified in writing by the Company
that
use of the applicable Prospectus may be resumed); and
(g) make
available for inspection by the Purchaser and any attorney, accountant or other
agent retained by the Purchaser, all publicly available, non-confidential
financial and other records, pertinent corporate documents and properties of
the
Company, and cause the Company’s officers, directors and employees to supply all
publicly available, non-confidential information reasonably requested by the
attorney, accountant or agent of the Purchaser.
4. Registration
Expenses.
All
expenses relating to the Company’s compliance with Sections 2 and 3 hereof,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company and independent
public accountants for the Company, fees and expenses (including reasonable
fees
of counsel for the Company) incurred in connection with complying with state
securities or “blue sky” laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, are called “Registration Expenses”. All
Registration Expenses shall be borne solely by the Company. All selling
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commissions,
fees and discounts applicable to the sale of Registrable Securities, as well
as
any fees and disbursements of any special counsel to the Holders, are called
“Selling Expenses.” All Selling Expenses shall be borne solely by the Purchaser
and the other Holders, jointly and severally.
5. Indemnification.
(a) In
the
event of a registration of any Registrable Securities under the Securities
Act
pursuant to this Agreement, the Company will indemnify and hold harmless each
Holder, and its officers, directors and each other person, if any, who controls
such Holder within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such Holder, or
such
persons may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement under which such
Registrable Securities were registered under the Securities Act pursuant to
this
Agreement, any preliminary Prospectus or final Prospectus contained therein,
or
any amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and
will reimburse such Holder, and each such person for any reasonable legal or
other expenses incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided,
however,
that
the Company will not be liable in any such case if and to the extent that any
such loss, claim, damage, liability or action arises out of or is based upon
an
untrue statement or alleged untrue statement or omission or alleged omission
(i)
so made in conformity with information furnished by or on behalf of the
Purchaser or any such person in writing specifically for use in any such
document, or (ii) contained in any preliminary Prospectus if such deficiency
is
corrected in the final Prospectus and such final Prospectus is provided to
the
Purchaser and the other Holders; and provided further, however, that the Company
will not be liable in any such case if and to the extent that any such loss,
claim, damage, liability or action arose from or is related to the failure
of
Purchaser, any Holder or any such person to deliver a Prospectus as required
by
the Securities Act.
(b) In
the
event of a registration of the Registrable Securities under the Securities
Act
pursuant to this Agreement, the Purchaser and any selling Holder, jointly and
severally, will indemnify and hold harmless the Company, and its officers,
directors and each other person, if any, who controls the Company within the
meaning of the Securities Act, against all losses, claims, damages or
liabilities, joint or several, to which the Company or such persons may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based
upon any untrue statement or alleged untrue statement of any material fact
which
was furnished in writing by the Purchaser to the Company expressly for use
in
(and such information is contained in) the Registration Statement under which
such Registrable Securities were registered under the Securities Act pursuant
to
this Agreement, any preliminary Prospectus or final Prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse the Company and each such person for any reasonable legal
or
other expenses incurred by them in connection with
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investigating
or defending any such loss, claim, damage, liability or action, provided,
however,
that
the Purchaser will be liable in any such case if and only to the extent that
any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made
in
conformity with information furnished in writing to the Company by or on behalf
of the Purchaser or any selling Holder specifically for use in any such
document. Notwithstanding the provisions of this paragraph, the Purchaser shall
not be required to indemnify any person or entity in excess of the amount of
the
aggregate proceeds (net of any selling commissions, fees and discounts) received
by the Purchaser and all other Holders in respect of Registrable Securities
in
connection with any such registration under the Securities Act.
(c) Promptly
after receipt by a party entitled to claim indemnification hereunder (an
“Indemnified Party”) of notice of the commencement of any action, such
Indemnified Party shall, if a claim for indemnification in respect thereof
is to
be made against a party hereto obligated to indemnify such Indemnified Party
(an
“Indemnifying Party”), notify the Indemnifying Party in writing thereof, but the
omission so to notify the Indemnifying Party shall not relieve it from any
liability which it may have to such Indemnified Party other than under Section
5
and shall only relieve it from any liability which it may have to such
Indemnified Party under Section 5 if and to the extent the Indemnifying Party
is
prejudiced by such omission. In case any such action shall be brought against
any Indemnified Party and it shall notify the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to participate
in
and, to the extent it shall wish, to assume and undertake the defense thereof
with counsel reasonably satisfactory to such Indemnified Party, and, after
notice from the Indemnifying Party to such Indemnified Party of its election
so
to assume and undertake the defense thereof, the Indemnifying Party shall not
be
liable to such Indemnified Party under this Section 5(c) for any legal expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof; if the Indemnified Party retains its own counsel, then the Indemnified
Party shall pay all fees, costs and expenses of such counsel, provided,
however,
that,
if the defendants in any such action include both the Indemnified Party and
the
Indemnifying Party and outside counsel to the Indemnified Party shall have
reasonably concluded that there may be reasonable defenses available to it
which
are different from or additional to those available to the Indemnifying Party
or
if the interests of the Indemnified Party are reasonably deemed to conflict
in
any material respect with the interests of the Indemnifying Party, the
Indemnified Party shall have the right to select one separate counsel and to
assume such legal defenses and otherwise to participate in the defense of such
action, with the reasonable expenses and fees of such separate counsel and
other
expenses related to such participation to be reimbursed by the Indemnifying
Party as incurred. No compromise or settlement of any claims in an action shall
be binding on an Indemnifying Party for purposes of the Indemnifying Party’s
indemnity obligations under this Agreement without the Indemnifying Party’s
express written consent.
(d) A
party
granted the right to direct the defense of any action under this Section 5
shall
keep the other parties hereto informed of material developments in the action
and shall promptly submit to the other parties copies of all pleadings,
responsive pleadings, motions and other similar legal documents and papers
received or submitted in connection with the action. The parties shall make
available to each other and each other’s counsel and accountants all of their
books and records relating to the action, and each party shall provide to the
others
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such
assistance as may be reasonably required to insure the proper and adequate
defense of the action. Each party shall use its good faith efforts to avoid
the
waiver of any privilege of another party. The assumption of the defense of
any
action by an Indemnifying Party shall not constitute an admission of
responsibility to indemnify or in any manner impair or restrict the Indemnifying
Party’s rights to later seek to be reimbursed its costs or expenses if
indemnification under this Agreement with respect to the action was not
required. An Indemnifying Party may elect to assume the defense of an Action
at
any time during the pendency of the Action, even if initially the Indemnifying
Party did not elect to assume the defense, so long as the assumption at such
later time would not materially prejudice the rights of the Indemnified
Party.
(e) In
order
to provide for just and equitable contribution in the event of joint liability
under the Securities Act in any case in which either (i) the Purchaser, or
any
officer, director or controlling person of the Purchaser, makes a claim for
indemnification pursuant to this Section 5 but it is judicially determined
(by
the entry of a final judgment or decree by a court of competent jurisdiction
and
the expiration of time to appeal or the denial of the last right of appeal)
that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 5 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of the
Purchaser or such officer, director or controlling person of the Purchaser
in
circumstances for which indemnification is provided under this Section 5; then,
and in each such case, the Company, on the one hand, and the Purchaser, on
the
other hand, will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportion so that the Purchaser is responsible only for the portion
represented by the percentage that the public offering price of its securities
offered by the Registration Statement bears to the public offering price of
all
securities offered by such Registration Statement, provided,
however,
that,
in any such case, (A) the Purchaser will not be required to contribute any
amount in excess of the public offering price of all such securities offered
by
it pursuant to such Registration Statement; and (B) no person or entity guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person or entity
who
was not guilty of such fraudulent misrepresentation.
6. [Intentionally
Omitted]
7. Miscellaneous.
(a) Remedies.
In the
event of a breach by the Company or by a Holder, of any of their respective
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.
(b) No
Piggyback on Registrations.
Except
as and to the extent set forth on Schedule
7(b)
hereto,
or except with the written consent of the Purchaser, which consent shall not
be
unreasonably withheld, neither the Company nor any of its security holders
(other than the Holders in such capacity pursuant hereto) may include securities
of the Company in any Registration Statement other than the Registrable
Securities, and the Company shall not after the date hereof enter into any
agreement providing any such right for inclusion of shares in the
8
Registration
Statement to any of its security holders. Except as and to the extent specified
in Schedule
7(b)
hereto,
the Company has not previously entered into any agreement granting any
registration rights with respect to any of its securities to any Person that
have not been fully satisfied.
(c) Compliance.
Each
Holder (including but not limited to the Purchaser) covenants and agrees that
it
will comply with the prospectus delivery requirements of the Securities Act
as
well as all other federal and applicable state securities laws, rules and
regulations applicable to it in connection with sales of Registrable Securities
pursuant to any Registration Statement.
(d) Discontinued
Disposition.
Each
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of a Discontinuation
Event (as defined below), such Holder will, if so directed by the Company in
such notice, forthwith discontinue disposition of such Registrable Securities
under the applicable Registration Statement until such Holder’s receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
or
until it is advised in writing (the “Advice”) by the Company that the use of the
applicable Prospectus may be resumed, and, in either case, has received copies
of any additional or supplemental filings that are incorporated or deemed to
be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
Section 7(d). For purposes of this Section 7(d), a “Discontinuation Event” shall
mean (i) when the Commission notifies the Company whether there will be a
“review” of such Registration Statement and whenever the Commission comments in
writing on such Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the
Holders); (ii) any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance by
the
Commission of any stop order suspending the effectiveness of such Registration
Statement covering any or all of the Registrable Securities or the initiation
of
any Proceedings for that purpose; (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and/or (v) the occurrence of any event or passage of time that makes
the financial statements included in such Registration Statement ineligible
for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein
by
reference untrue in any material respect or that requires any revisions to
such
Registration Statement, Prospectus or other documents so that, in the case
of
such Registration Statement or Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
(e) Piggy-Back
Registrations.
If at
any time during any Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities required to be covered
during such Effectiveness Period and the Company shall determine to prepare
and
file with the Commission 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
9
Form S-4
or Form S-8 (each as promulgated under the Securities Act) 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, then the Company
shall send to each Holder written notice of such determination and, if within
fifteen (15) days after receipt of such notice, any such Holder shall so request
in writing, the Company shall include in such registration statement all or
any
part of such Registrable Securities such Holder requests to be registered,
to
the extent the Company may do so without violating registration rights of others
which exist as of the date of this Agreement, subject to customary underwriter
cutbacks applicable to all holders of registration rights and subject to
obtaining any required consent of any selling stockholder(s) to such inclusion
under such registration statement. If the Company provides written notice to
the
Holders as required above and such Holder is permitted but elects not to
register its Registrable Securities on such registration statement, then the
Company shall have no obligation to file a Registration Statement with respect
to such Holder’s Registrable Securities.
(f) Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this sentence, may
not
be amended, modified or supplemented, and waivers or consents to departures
from
the provisions hereof may not be given, unless the same shall be in writing
and
signed by the Company and Holders of at least a majority of the then outstanding
Registrable Securities (and in such event the amendment, modification,
supplement or waiver shall be binding on all Holders). Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of certain Holders and that
does not directly or indirectly affect the rights of other Holders may be given
by Holders of at least a majority of the Registrable Securities to which such
waiver or consent relates; provided,
however,
that
the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding
sentence.
(g) Notices.
Any
notice or request required or permitted hereunder shall be given to the Company,
the Purchaser or any Holder at the respective addresses set forth below or
as
may hereafter be specified in a notice designated as a change of address under
this Section 7(g). Any notice or request hereunder shall be given by registered
or certified mail, return receipt requested, hand delivery, overnight mail,
Federal Express or other national overnight next day carrier (collectively,
“Courier”) or telecopy (confirmed by mail). Notices and requests shall be, in
the case of those by hand delivery, deemed to have been given when delivered
to
any party to whom it is addressed, in the case of those by mail or overnight
mail, deemed to have been given three (3) business days after the date when
deposited in the mail or with the overnight mail carrier, in the case of a
Courier, the next business day following timely delivery of the package with
the
Courier, and, in the case of a telecopy, when confirmed. The address for such
notices and communications shall be as follows:
If
to the Company:
|
Magnetech
Integrated Services Corp.
|
||
0000
X. Xxxxxx Xxxxxx
|
|||
Xxxxx
Xxxx, Xxxxxxx 00000
|
|||
Attention: Chief
Financial Officer
|
|||
Facsimile:
000-000-0000
|
10
with
a copy to:
|
|||
Xxxxxx
& Xxxxxxxxx LLP
|
|||
600
1st
Source Bank Center
|
|||
000
Xxxxx Xxxxxxxx
|
|||
Xxxxx
Xxxx, Xxxxxxx 00000
|
|||
Attention:
Xxxxxxx X. Xxxxx, Esq.
|
|||
Facsimile:
000-000-0000
|
|||
If
to a Purchaser:
|
To
the address set forth under such Purchaser name on the signature
pages
hereto.
|
||
If
to any other Person who is then the registered
Holder:
|
To
the address of such Holder as it appears in the stock transfer books
of
the Company
|
or
such
other address as may be designated in writing hereafter in accordance with
this
Section 7(g) by such Person.
(h) Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
permitted assigns of each of the parties and shall inure to the benefit of
and
be binding upon each Holder. The Company may not assign its rights or
obligations hereunder without the prior written consent of each Holder. Each
Holder may assign their respective rights hereunder in the manner and to the
Persons as permitted under the Notes and the Security Agreement so long as
such
assignee is subject to the terms and conditions of this Agreement.
(i) Execution
and Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same agreement. In the event that any signature
is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.
(j) Governing
Law, Jurisdiction and Waiver of Jury Trial.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
SUCH
STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. The Company hereby
consents and agrees that the state or federal courts located in the County
of
New York, State of New York shall have exclusion jurisdiction to hear and
determine any Proceeding between the Company, on the one hand, and the
Purchaser, on the other hand, pertaining to this Agreement or to any matter
arising out of or related to this Agreement; provided,
that
the Purchaser and the Company acknowledge that any appeals from those courts
may
have to be heard by a court located outside of the County of New York, State
of
New York, and further provided,
that
nothing in this Agreement shall be deemed or operate to preclude the Purchaser
from bringing a Proceeding in any other jurisdiction to collect the obligations,
to realize on the Collateral or any other security for the obligations, or
to
enforce a judgment or other court order in favor of the Purchaser. The Company
expressly
11
submits
and consents in advance to such jurisdiction in any Proceeding commenced in
any
such court, and the Company hereby waives any objection which it may have based
upon lack of personal jurisdiction, improper venue or forum
non conveniens.
The
Company hereby waives personal service of the summons, complaint and other
process issued in any such Proceeding and agrees that service of such summons,
complaint and other process may be made by registered or certified mail
addressed to the Company at the address set forth in Section 7(g) and that
service so made shall be deemed completed upon the earlier of the Company’s
actual receipt thereof or three (3) days after deposit in the U.S. mails, proper
postage prepaid. The parties hereto desire that their disputes be resolved
by a
judge applying such applicable laws. Therefore, to achieve the best combination
of the benefits of the judicial system and of arbitration, the parties hereto
waive all rights to trial by jury in any Proceeding brought to resolve any
dispute, whether arising in contract, tort, or otherwise between the Purchaser
and/or the Company arising out of, connected with, related or incidental to
the
relationship established between then in connection with this Agreement. If
either party hereto shall commence a Proceeding to enforce any provisions of
this Agreement, the Security Agreement or any other Ancillary Agreement, then
the prevailing party in such Proceeding shall be reimbursed by the other party
for its reasonable attorneys’ fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such Proceeding.
(k) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
(l) Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(m) Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
[Balance
of page intentionally left blank; signature page follows]
12
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
MAGNETECH
INTEGRATED SERVICES CORP.
|
||
By:
|
/s/ Xxxx X. Xxxxxxx
|
|
Name:
|
Xxxx X. Xxxxxxx | |
Title:
|
President & CEO | |
LAURUS
MASTER FUND, LTD.
|
||
By:
|
/s/ Xxxxx Grin
|
|
Name:
|
Xxxxx Grin | |
Title:
|
Director | |
Address
for Notices:
|
||
000
Xxxxx Xxxxxx, 00xx Xxxxx
|
||
Xxx
Xxxx, Xxx Xxxx 00000
|
||
Attention:
Xxxxx Grin
|
||
Facsimile:
000-000-0000
|
13
EXHIBIT
A
____________,
200___
[stock
transfer agent name and address
Attn:
______________]
Re:
|
Magnetech
Integrated Services Corp. Registration Statement on Form
[S-3]
|
Ladies
and Gentlemen:
As
counsel to Magnetech Integrated Services Corp., an Indiana corporation (the
“Company”), we have been requested to render our opinion to you in connection
with the resale by the individuals or entitles listed on Schedule
A
attached
hereto (the “Selling Stockholders”), of an aggregate of __________ shares (the
“Shares”) of the Company’s Common Stock.
A
Registration Statement on Form [S-3] under the Securities Act of 1933, as
amended (the “Act”), with respect to the resale of the Shares was declared
effective by the Securities and Exchange Commission on [date]. Enclosed is
the
Prospectus dated [date]. We understand and assume that the Shares are to be
offered and sold in the manner described in the Prospectus. We further assume
that the Selling Stockholders will comply with their prospectus delivery
requirements under the Act.
Based
upon the foregoing, upon request by the Selling Stockholders at any time while
the registration statement remains effective, it is our opinion that the Shares
have been registered for resale under the Act and, so long as you have not
been
advised by us or the Company to the contrary, new certificates evidencing the
Shares upon their transfer or re-registration by the Selling Stockholders may
be
issued without restrictive legend.
Very
truly yours,
[Company
counsel]
Schedule
A to Exhibit A
Selling
Stockholder
|
Shares
Being Offered
|
SCHEDULE
7(b)
A. Additional
Shares to be Registered
The
Company will include in one or more of the Registration Statements all of the
32,443,335 shares of its Common Stock outstanding as of the date of this
Agreement, as well as an additional 18,919,900 shares of its Common Stock
issuable upon conversion of outstanding warrants and subordinated convertible
debentures.
B. Outstanding
Obligations to Register Shares
The
Company is obligated to register for resale shares of its Common Stock
that:
a) were
issued upon the conversion of shares of Series A Preferred Stock issued by
Magnetech Industrial Services, Inc. in a private offering occurring in February
2004;
b)
were
issued in a private offering that commenced in May 2004;
c) are
issuable upon conversion of warrants and subordinated convertible debentures
issued in a private offering that commenced in January 2005;
d) were
issued to Xxxxxxx Xxxxxxx; and
e) are
issuable upon conversion of outstanding warrants issued to Strasbourger Xxxxxxx
Tulcin Xxxxx Incorporated (“Strasbourger”) or its designees pursuant to the
Company’s placement agency agreements with Strasbourger.