Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of May 22, 2009 by and among American Defense Systems, Inc., a Delaware
corporation (the “Company”), and the Holders named in that certain Settlement
Agreement, Waiver and Amendment of even date herewith by and among the Company
and the Holders (the “Settlement Agreement”). Capitalized terms used herein have
the respective meanings ascribed thereto in the Settlement Agreement unless
otherwise defined herein.

 

The parties hereby agree as follows:

 

1.                                       Certain Definitions.

 

As used in this Agreement, the following terms shall have the following
meanings:

 

“Common Stock” shall mean the Company’s common stock, par value $0.001 per
share, and any securities into which such shares may hereinafter be
reclassified.

 

“Investors” shall mean the Holders identified in the Settlement Agreement and
any permitted transferee of any Investor who is a subsequent holder of any
Registrable Securities.

 

“Prospectus” shall mean (i) the prospectus included in any Registration
Statement, 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 by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus, and (ii) any “free
writing prospectus” as defined in Rule 405 under the 1933 Act.

 

“Register,” “registered” and “registration” refer to a registration made by
preparing and filing a Registration Statement or similar document in compliance
with the 1933 Act (as defined below), and the declaration or ordering of
effectiveness of such Registration Statement or document.

 

“Registrable Securities” shall mean (i) the Settlement Shares and (ii) any other
securities issued or issuable with respect to or in exchange for Registrable
Securities; provided, that, a security shall cease to be a Registrable Security
upon (A) sale pursuant to a Registration Statement or Rule 144 under the 1933
Act, or (B) such security becoming eligible for sale by the Investors pursuant
to Rule 144.

 

“Registration Statement” shall mean any registration statement of the Company
filed under the 1933 Act that covers the resale of any of the Registrable
Securities pursuant to the provisions of this Agreement, amendments and
supplements to such Registration Statement, including post-effective amendments,
and all exhibits and all material incorporated by reference in such Registration
Statement.

 

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“Required Investors” means the Investors holding a majority of the Registrable
Securities.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“1933 Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

“1934 Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

 

2.                                       Registration.

 

(a)                                  Registration Statement.  Within ten days
following the Effective Date, the Company shall prepare and file with the SEC
one Registration Statement on Form S-3 (or, if Form S-3 is not then available to
the Company, on such form of registration statement as is then available to
effect a registration for resale of the Registrable Securities), covering the
resale of the Registrable Securities.  Subject to any SEC comments, such
Registration Statement shall include the plan of distribution attached hereto as
Exhibit A; provided, however, that no Investor shall be named as an
“underwriter” in the Registration Statement without the Investor’s prior written
consent. Such Registration Statement also shall cover, to the extent allowable
under the 1933 Act and the rules promulgated thereunder (including Rule 416),
such indeterminate number of additional shares of Common Stock resulting from
stock splits, stock dividends or similar transactions with respect to the
Registrable Securities.  The Registration Statement (and each amendment or
supplement thereto, and each request for acceleration of effectiveness thereof)
shall be provided in accordance with Section 3(c) to the Investors and one
counsel to the Investors prior to its filing or other submission.

 

(b)                                 Expenses. The Company will pay all expenses
associated with the registration pursuant hereto, including filing and printing
fees, the Company’s counsel and accounting fees and expenses, costs associated
with clearing the Registrable Securities for sale under applicable state
securities laws and listing fees, and fees and expenses of one counsel to the
Investors (up to a maximum of $10,000), but excluding any other fees or expenses
incurred by the Investors and any discounts, commissions, fees of underwriters,
selling brokers, dealer managers or similar securities industry professionals
with respect to the Registrable Securities being sold.

 

(c)                                  Effectiveness.

 

(i)                                     The Company shall use best efforts to
have the Registration Statement declared effective as soon as practicable after
the filing thereof. The Company shall notify the Investors by facsimile or
e-mail as promptly as practicable, and in any event within 24 hours, after the
Registration Statement is declared effective and shall simultaneously provide
the Investors with copies of any related Prospectus to be used in connection
with the sale or other disposition of the securities covered thereby.

 

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(ii)                                  For not more than 20 consecutive days or
for a total of not more than 60 days in any 12 month period, the Company may
suspend the use of any Prospectus included in any Registration Statement in the
event that the Company determines in good faith that such suspension is
necessary to (A) delay the disclosure of material non-public information
concerning the Company, the disclosure of which at the time is not, in the good
faith opinion of the Company, in the best interests of the Company or (B) amend
or supplement the affected Registration Statement or the related Prospectus so
that such Registration Statement or Prospectus shall not include an 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, in the case of the
Prospectus in light of the circumstances under which they were made, not
misleading (an “Allowed Delay”); provided, however, that the Company shall
promptly (a) notify each Investor in writing of the commencement of and the
reasons for an Allowed Delay, but shall not (without the prior written consent
of an Investor) disclose to such Investor any material non-public information
giving rise to an Allowed Delay and (b) advise the Investors in writing to cease
all sales under the Registration Statement until the end of the Allowed Delay.

 

(d)                                 Rule 415; Cutbacks. If at any time the SEC
takes the position that the offering of some or all of the Registrable
Securities in a Registration Statement is not eligible to be made on a delayed
or continuous basis under the provisions of Rule 415 under the 1933 Act or
requires any Investor to be named as an “underwriter”, the Company shall use its
best efforts to persuade the SEC that the offering contemplated by the
Registration Statement is a valid secondary offering and not an offering “by or
on behalf of the issuer” as defined in Rule 415 and that none of the Investors
is an “underwriter”. The Investors shall have the right to participate or have
their counsel participate in any meetings or discussions with the SEC regarding
the SEC’s position and to comment or have their counsel comment on any written
submission made to the SEC with respect thereto. No such written submission
shall be made to the SEC to which the Investors’ counsel reasonably objects. In
the event that, despite the Company’s best efforts and compliance with the terms
of this Section 2(d), the SEC refuses to alter its position, the Company shall
(i) remove from the Registration Statement such portion of the Registrable
Securities (the “Cut Back Shares”) and/or (ii) agree to such restrictions and
limitations on the registration and resale of the Registrable Securities as the
SEC may require to assure the Company’s compliance with the requirements of
Rule 415; provided, however, that the Company shall not agree to name any
Investor as an “underwriter” in such Registration Statement without the prior
written consent of such Investor (collectively, the “SEC Restrictions”). Any
cut-back imposed on the Investors pursuant to this Section 2(d) shall be
allocated among the Investors on a pro rata basis, unless the SEC Restrictions
otherwise require or provide.

 

3.                                       Company Obligations. The Company will
use best efforts to effect the registration of the Registrable Securities in
accordance with the terms hereof, and pursuant thereto the Company will, as
expeditiously as possible:

 

(a)                                  use best efforts to cause such Registration
Statement to remain continuously effective for a period commencing on the date
on which the Registration Statement is declared effective pursuant to
Section 2(c)(i), and terminating upon the earlier of (i) the date on which all
Registrable Securities covered by such Registration Statement as amended from

 

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time to time, have been sold, and (ii) the date on which all Registrable
Securities covered by such Registration Statement may be sold pursuant to
Rule 144 (the “Effectiveness Period”);

 

(b)                                 prepare and file with the SEC such
amendments and post-effective amendments to the Registration Statement and the
Prospectus as may be necessary to keep the Registration Statement effective for
the Effectiveness Period and to comply with the provisions of the 1933 Act and
the 1934 Act with respect to the distribution of all of the Registrable
Securities covered thereby;

 

(c)                                  provide copies to and permit counsel
designated by the Investors to review each Registration Statement and all
amendments and supplements thereto no fewer than two days prior to their filing
with the SEC and not file any document to which such counsel reasonably objects;

 

(d)                                 furnish to the Investors and their legal
counsel (i) promptly after the same is prepared and publicly distributed, filed
with the SEC, or received by the Company (but not later than two Business Days
after the filing date, receipt date or sending date, as the case may be) one
copy of any Registration Statement and any amendment thereto, each preliminary
prospectus and Prospectus and each amendment or supplement thereto, and 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), and (ii) such number of copies of a Prospectus, including a
preliminary prospectus, and all amendments and supplements thereto and such
other documents as each Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor that are
covered by the related Registration Statement;

 

(e)                                  (i) promptly notify the Investors of the
issuance of any stop order or other suspension of the effectiveness of any
Registration Statement and (ii) use best efforts to (A) prevent the issuance of
any stop order or other suspension of effectiveness and, (B) if such order is
issued, obtain the withdrawal of any such order at the earliest possible moment;

 

(f)                                    use best efforts to register or qualify
or cooperate with the Investors and their counsel in connection with the
registration or qualification of such Registrable Securities for offer and sale
under the securities or blue sky laws of such jurisdictions requested by the
Investors and do any and all other commercially reasonable acts or things
necessary or advisable to enable the distribution in such jurisdictions of the
Registrable Securities covered by the Registration Statement; provided, however,
that the Company shall not be required in connection therewith or as a condition
thereto to (i) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(f), (ii) subject itself
to general taxation in any jurisdiction where it would not otherwise be so
subject but for this Section 3(f), or (iii) file a general consent to service of
process in any such jurisdiction;

 

(g)                                 use best efforts to cause all Registrable
Securities covered by a Registration Statement to be listed on each securities
exchange, interdealer quotation system or other market on which similar
securities issued by the Company are then listed;

 

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(h)                                 immediately notify the Investors, at any
time prior to the end of the Effectiveness Period, upon discovery that the
Prospectus includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and promptly
prepare, file with the SEC and furnish to such holder a supplement to or an
amendment of such Prospectus as may be necessary so that such Prospectus shall
not include an 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 in light of the circumstances then existing; and

 

(i)                                     otherwise use best efforts during the
Effectiveness Period to comply with all applicable rules and regulations of the
SEC under the 1933 Act and the 1934 Act with respect to the Registration
Statement, including, without limitation, Rule 172 under the 1933 Act, file any
final Prospectus, including any supplement or amendment thereof, with the SEC
pursuant to Rule 424 under the 1933 Act, promptly inform the Investors in
writing if, at any time during the Effectiveness Period, the Company does not
satisfy the conditions specified in Rule 172 and, as a result thereof, the
Investors are required to deliver a Prospectus in connection with any
disposition of Registrable Securities and take such other actions as may be
reasonably necessary to facilitate the registration of the Registrable
Securities hereunder; and make available to its security holders, as soon as
reasonably practicable, but not later than the Availability Date (as defined
below), an earnings statement covering a period of at least twelve (12) months,
beginning after the effective date of each Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the 1933
Act, including Rule 158 promulgated thereunder (for the purpose of this
subsection 3(i), “Availability Date” means the 45th day following the end of the
fourth fiscal quarter that includes the effective date of such Registration
Statement, except that, if such fourth fiscal quarter is the last quarter of the
Company’s fiscal year, “Availability Date” means the 90th day after the end of
such fourth fiscal quarter).

 

4.                                       Obligations of the Investors.

 

(a)                                  Each Investor shall furnish in writing to
the Company such information regarding itself, the Registrable Securities held
by it and the intended method of disposition of the Registrable Securities held
by it, as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. At least five Business Days
prior to the first anticipated filing date of any Registration Statement, the
Company shall notify each Investor of the information the Company requires from
such Investor if such Investor elects to have any of the Registrable Securities
included in the Registration Statement. An Investor shall provide such
information to the Company at least two Business Days prior to the first
anticipated filing date of such Registration Statement if such Investor elects
to have any of the Registrable Securities included in the Registration
Statement.

 

(b)                                 Each Investor, by its acceptance of the
Registrable Securities agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of a
Registration Statement hereunder, unless such Investor has notified the Company
in writing of its election to exclude all of its Registrable Securities from
such Registration Statement.

 

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(c)                                  Each Investor agrees that, upon receipt of
any notice from the Company of either (i) the commencement of an Allowed Delay
pursuant to Section 2(c)(ii) or (ii) the happening of an event pursuant to
Section 3(h) hereof, such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities, until the Investor is advised by the Company that such
dispositions may again be made.

 

5.                                       Indemnification.

 

(a)                                  Indemnification by the Company. The Company
will indemnify and hold harmless each Investor and its officers, directors,
members, employees and agents, successors and assigns, and each other person, if
any, who controls such Investor within the meaning of the 1933 Act, against any
losses, claims, damages, liabilities and expense (including reasonable attorney
fees) resulting from (i) any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, any preliminary
Prospectus or final Prospectus, or any amendment or supplement thereof or
(ii) any violation by the Company or its agents of any rule or regulation
promulgated under the 1933 Act applicable to the Company or its agents and
relating to action or inaction required of the Company in connection with such
registration; provided, however, that the Company will not be liable in any such
case if and to the extent that any such loss, claim, damage or liability arises
out of or is based upon (1) an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information furnished by
such Investor or any such controlling person in writing specifically for use in
such Registration Statement or Prospectus,  (2) the use by such Investor of an
outdated or defective Prospectus after the Company has notified such Investor in
writing that the Prospectus is outdated or defective, or (3) the failure of such
Investor to deliver a Prospectus as amended or supplemented prior to the
confirmation of a sale.

 

(b)                                 Indemnification by the Investors. Each
Investor agrees, severally but not jointly, to indemnify and hold harmless, to
the fullest extent permitted by law, the Company, its directors, officers,
employees, stockholders and each person who controls the Company (within the
meaning of the 1933 Act) against any losses, claims, damages, liabilities and
expense (including reasonable attorney fees) resulting from (i) any untrue
statement of a material fact or any omission of a material fact required to be
stated in the Registration Statement or Prospectus or preliminary Prospectus or
amendment or supplement thereto or necessary to make the statements therein not
misleading, to the extent, but only to the extent that such untrue statement or
omission is contained in any information furnished in writing by such Investor
to the Company specifically for inclusion in such Registration Statement or
Prospectus or amendment or supplement thereto, (ii) the use by such Investor of
an outdated or defective Prospectus after the Company has notified such Investor
in writing that the Prospectus is outdated or defective or (iii) the failure of
such Investor to deliver a Prospectus as amended or supplemented prior to the
confirmation of a sale.

 

(c)                                  Conduct of Indemnification Proceedings. Any
person entitled to indemnification hereunder shall (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided

 

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that any person entitled to indemnification hereunder shall have the right to
employ separate counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of such person unless
(a) the indemnifying party has agreed to pay such fees or expenses, or (b) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such person or (c) in the reasonable
judgment of any such person, based upon written advice of its counsel, a
conflict of interest exists between such person and the indemnifying party with
respect to such claims (in which case, if the person notifies the indemnifying
party in writing that such person elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such claim on behalf of such person); 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
hereunder, except to the extent that such failure to give notice shall
materially adversely affect the indemnifying party in the defense of any such
claim or litigation. It is understood that the indemnifying party shall not, in
connection with any proceeding in the same jurisdiction, be liable for fees or
expenses of more than one separate firm of attorneys at any time for all such
indemnified parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that 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 of such claim or litigation.

 

(d)                                 Contribution. If for any reason the
indemnification provided for in the preceding paragraphs (a) and (b) is
unavailable to an indemnified party or insufficient to hold it harmless, other
than as expressly specified therein, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of
such loss, claim, damage or liability in such proportion as is appropriate to
reflect the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations. No person guilty of
fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act
shall be entitled to contribution from any person not guilty of such fraudulent
misrepresentation. In no event shall the contribution obligation of a holder of
Registrable Securities be greater in amount than the dollar amount of the
proceeds (net of all expenses paid by such holder in connection with any claim
relating to this Section 6 and the amount of any damages such holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the sale of the
Registrable Securities giving rise to such contribution obligation.

 

7.                                       Miscellaneous.

 

(a)                                  Amendments and Waivers. This Agreement may
be amended only by a writing signed by the Company and the Required Investors.
The Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company shall have obtained
the written consent to such amendment, action or omission to act, of the
Required Investors.

 

(b)                                 Notices. All notices and other
communications provided for or permitted hereunder shall be made as set forth in
Section 7(f) of the Settlement Agreement.

 

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(c)                                  Assignments and Transfers by Investors. The
provisions of this Agreement shall be binding upon and inure to the benefit of
the Investors and their respective successors and assigns. An Investor may
transfer or assign, in whole or from time to time in part, to one or more
persons its rights hereunder in connection with the transfer of Registrable
Securities by such Investor to such person, provided that such Investor complies
with all laws applicable thereto and provides written notice of assignment to
the Company promptly after such assignment is effected.

 

(d)                                 Assignments and Transfers by the Company.
This Agreement may not be assigned by the Company (whether by operation of law
or otherwise) without the prior written consent of the Required Investors,
provided, however, that the Company may assign its rights and delegate its
duties hereunder to any surviving or successor corporation in connection with a
merger or consolidation of the Company with another corporation, or a sale,
transfer or other disposition of all or substantially all of the Company’s
assets to another corporation, without the prior written consent of the Required
Investors, after notice duly given by the Company to each Investor.

 

(e)                                  Benefits of the Agreement. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective permitted successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.

 

(f)                                    Counterparts. This Agreement may be
executed in two or more identical counterparts, all of which shall be considered
one and the same agreement and shall become effective when counterparts have
been signed by each party and delivered to the other party; provided that a
facsimile signature and a signature delivered electronically (including by
delivery via electronic mail of a signature page in “pdf” format) shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
or electronic signature.

 

(g)                                 Titles and Subtitles. The titles and
subtitles used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.

 

(h)                                 Severability. Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof but shall
be interpreted as if it were written so as to be enforceable to the maximum
extent permitted by applicable law, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction. To the extent permitted by applicable law, the
parties hereby waive any provision of law which renders any provisions hereof
prohibited or unenforceable in any respect.

 

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(i)                                     Further Assurances. The parties shall
execute and deliver all such further instruments and documents and take all such
other actions as may reasonably be required to carry out the transactions
contemplated hereby and to evidence the fulfillment of the agreements herein
contained.

 

(j)                                     Entire Agreement. This Agreement is
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

 

(k)                                  Governing Law; Consent to Jurisdiction;
Waiver of Jury Trial. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of Delaware, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of Delaware.  Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of Wilmington, Delaware, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. 
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, each Investor and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 

 

 

COMPANY:

 

 

 

AMERICAN DEFENSE SYSTEMS, INC.

 

 

 

 

 

By:

/s/ Gary Sidorsky

 

 

Name:  Gary Sidorsky

 

 

Title:   Chief Financial Officer

 

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IN WITNESS WHEREOF, each Investor and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 

 

 

INVESTORS:

 

 

 

WEST COAST OPPORTUNITY FUND, LLC

 

 

 

 

 

By:

/s/ Atticus Lowe

 

 

Name:  Atticus Lowe

 

 

Title:  CIO of Managing Member

 

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IN WITNESS WHEREOF, each Investor and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 

 

 

INVESTORS:

 

 

 

CENTAUR VALUE FUND, LP

 

 

 

 

 

By:

/s/ Zeke Ashton

 

 

Name:  Zeke Ashton

 

 

Title:   Managing Partner

 

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IN WITNESS WHEREOF, each Investor and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 

 

 

INVESTORS:

 

 

 

UNITED CENTAUR MASTER FUND

 

 

 

 

 

By:

/s/ Zeke Ashton

 

 

Name:  Zeke Ashton

 

 

Title:   Managing Partner

 

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Exhibit A

 

Plan of Distribution

 

The selling stockholders, which as used herein includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus
from a selling stockholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise dispose of any or
all of their shares of common stock or interests in shares of common stock on
any stock exchange, market or trading facility on which the shares are traded or
in private transactions. These dispositions may be at fixed prices, at
prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale, or at
negotiated prices.

 

The selling stockholders may use any one or more of the following methods when
disposing of shares or interests therein:

 

·              ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

 

·              block trades in which the broker-dealer will attempt to sell the
shares as agent, but may position and resell a portion of the block as principal
to facilitate the transaction;

 

·              purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;

 

·              an exchange distribution in accordance with the rules of the
applicable exchange;

 

·              privately negotiated transactions;

 

·              short sales effected after the date the registration statement of
which this Prospectus is a part is declared effective by the SEC;

 

·              through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;

 

·              broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a stipulated price per share; and

 

·              a combination of any such methods of sale.

 

The selling stockholders may, from time to time, pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock, from time to time, under
this prospectus, or under an amendment to this prospectus under
Rule 424(b)(3) or other applicable provision of the Securities Act amending the

 

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list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus. The
selling stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this prospectus.

 

In connection with the sale of our common stock or interests therein, the
selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The selling
stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).

 

The aggregate proceeds to the selling stockholders from the sale of the common
stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. Each of the selling stockholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of common stock to be made directly or
through agents. We will not receive any of the proceeds from this offering.

 

The selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided that they meet the criteria and conform to the requirements of that
rule.

 

The selling stockholders and any underwriters, broker-dealers or agents that
participate in the sale of the common stock or interests therein may be
“underwriters” within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the Securities Act.
Selling stockholders who are “underwriters” within the meaning of Section 2(11)
of the Securities Act will be subject to the prospectus delivery requirements of
the Securities Act.

 

To the extent required, the shares of our common stock to be sold, the names of
the selling stockholders, the respective purchase prices and public offering
prices, the names of any agents, dealer or underwriter, any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.

 

In order to comply with the securities laws of some states, if applicable, the
common stock may be sold in these jurisdictions only through registered or
licensed brokers or dealers. In addition, in some states the common stock may
not be sold unless it has been registered or qualified for sale or an exemption
from registration or qualification requirements is available and is complied
with.

 

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We have advised the selling stockholders that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of shares in the market
and to the activities of the selling stockholders and their affiliates. In
addition, to the extent applicable we will make copies of this prospectus (as it
may be supplemented or amended from time to time) available to the selling
stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The selling stockholders may indemnify any broker-dealer
that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities Act.

 

We have agreed to indemnify the selling stockholders against liabilities,
including liabilities under the Securities Act and state securities laws,
relating to the registration of the shares offered by this prospectus.

 

We have agreed with the selling stockholders to keep the registration statement
of which this prospectus constitutes a part effective until the earlier of
(1) such time as all of the shares covered by this prospectus have been disposed
of pursuant to and in accordance with the registration statement or (2) the date
on which the shares may be sold pursuant to Rule 144 of the Securities Act.

 

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