EXHIBIT 10.3
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
     THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of
the [___] day of [                    ] 2007, by and among JK Acquisition Corp.,
a Delaware corporation (the “Company”), Catalyst/Hall Growth Capital Management
Co., LLC, as members’ representative a Texas limited liability company
(“Catalyst”), and [Investor’s designee], a [                    ] (“Designee”
and together with Catalyst, each or either or both, the “Members’
Representative”), and the undersigned parties listed on the signature page
hereto (each a “Stockholder” and collectively, the “Stockholders”), each of whom
was a member of Multi-Shot, LLC prior to the Effective Time of the Merger.
Unless otherwise indicated, capitalized terms not defined herein have the
meanings set forth in the Merger Agreement.
     WHEREAS, the Company and the Stockholders are parties to that certain First
Amended and Restated Agreement and Plan of Merger, dated February 14, 2007,
among the Company, Multi-Shot, Inc., Multi-Shot, LLC, Catalyst Hall Growth
Capital Management Co., LLC and the members of Multi-Shot, LLC (the “Merger
Agreement”);
     WHEREAS, the Stockholders own [                    ] shares of Common Stock
of the Company and [                    ] Warrants;
     WHEREAS, as a material inducement to enter into the Merger Agreement, the
Stockholders and the Company desire to enter into this Agreement to provide the
Stockholders with certain rights relating to the registration of such shares of
Common Stock and such shares of Common Stock issuable upon the exercise of such
Warrants held by them;
     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS. The following capitalized terms used herein have the following
meanings:
     “Agreement” means this Agreement, as amended, restated, supplemented, or
otherwise modified from time to time.
     “Commission” means the Securities and Exchange Commission, or any other
federal agency then administering the Securities Act or the Exchange Act.
     “Common Stock” means the common stock, par value $0.0001 per share, of the
Company.
     “Company” is defined in the preamble to this Agreement.
     “Demand Registration” means a written demand for registration under the
Securities Act of all or part of their Registrable Securities.
     “Demanding Holder” means each holder of Registrable Securities who wishes
to include all or a portion of such holder’s Registrable Securities in a Demand
Registration.
     “Disclosure Package” means the preliminary prospectus included in the
Registration Statement immediately prior to the Time of Sale and any additional
materials distributed in connection with the offering and sale of Registrable
Securities.

 

--------------------------------------------------------------------------------

 

     “Escrow Agreement” means the Escrow Agreement dated as of [___], 2007
executed and delivered by the Company, the Members’ Representative, and Zions
First National Bank pursuant to Section 2.04(b) of the Merger Agreement.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder, all as the
same shall be in effect at the time.
     “Form S-3” is defined in Section 2.3.
     “Indemnified Party” is defined in Section 4.3.
     “Indemnifying Party” is defined in Section 4.3.
     “Stockholder Indemnified Party” is defined in Section 4.1.
     “Maximum Number of Shares” is defined in Section 2.1.4.
     “Merger Agreement” is defined in the recitals to this Agreement.
     “Notices” is defined in Section 6.2.
     “Piggy-Back Registration” is defined in Section 2.2.1.
     “Register,” “Registered” and “Registration” mean a registration effected by
preparing and filing a registration statement or similar document in compliance
with the requirements of the Securities Act, and the applicable rules and
regulations promulgated thereunder, and such registration statement becoming
effective.
     “Registrable Securities” mean all of the shares of Common Stock and
Warrants owned or held by the Stockholders and all of the shares of Common Stock
issuable upon exercise of the Warrants, whether or not such shares of Common
Stock or Warrants are then subject to the Escrow Agreement. Registrable
Securities include any warrants, shares of capital stock or other securities of
the Company issued as a dividend or other distribution with respect to or in
exchange for or in replacement of such shares of Common Stock. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when: (a) a Registration Statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been sold, transferred, disposed of or exchanged in
accordance with such Registration Statement; (b) such securities shall have been
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not require registration under the
Securities Act; (c) such securities shall have ceased to be outstanding, (d) the
Securities and Exchange Commission makes a definitive determination to the
Company that the Registrable Securities are salable under Rule 144(k), or
(e) such securities shall no longer be entitled to registration rights pursuant
to the terms hereof.
     “Registration Statement” means a registration statement filed by the
Company with the Commission in compliance with the Securities Act and the rules
and regulations promulgated thereunder for a public offering and sale of Common
Stock (other than a registration statement on Form S-4 or Form S-8, or their
successors, or any registration statement covering only securities proposed to
be issued in exchange for securities or assets of another entity).
     “Release Date” means the date that is six months after the Effective Time
as defined in the Merger Agreement.
     “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder, all as the same
shall be in effect at the time.
     “Time of Sale” means the time and date as of which contracts for sale of
Registrable Securities are deemed made pursuant to a Registration Statement
filed pursuant to this Agreement.

2

--------------------------------------------------------------------------------

 

     “Underwriter” means a securities dealer who purchases any Registrable
Securities as principal in an underwritten offering and not as part of such
dealer’s market-making activities.
     “Warrants” means those Parent Warrants and Redemption Warrants issued by
the Company to the Stockholders as Merger Consideration pursuant to the Merger
Agreement.
2. REGISTRATION RIGHTS.
     2.1 Demand Registration.
     2.1.1 Request for Registration by the Stockholders. At any time and from
time to time on or after the Release Date, Members’ Representative or, if the
Members’ Representative ceases to act as such, the holders of a
majority-in-interest of the Registrable Securities held by the Stockholders or
the transferees of the Stockholders, may make up to four (4) written demands for
a Demand Registration. The Company will notify the Stockholders of its receipt
of and intent to act upon the demand, and each Stockholder shall notify the
Company within fifteen (15) days after the receipt by the holder of the notice
from the Company specifying the number of Registerable Securities that such
Demanding Holder wishes to include in such Demand Registration and the intended
method(s) of distribution thereof. Upon any such request, the Demanding Holders
shall be entitled to have their Registrable Securities included in the Demand
Registration, subject to Section 2.1.4 and the provisos set forth in
Section 3.1.1. The Company shall not be obligated to effect more than an
aggregate of four (4) Demand Registrations under this Section 2.1.1 in respect
of Registrable Securities.
     2.1.2 Effective Registration. A registration will not count as a Demand
Registration until the Registration Statement filed with the Commission with
respect to such Demand Registration has been declared effective and the Company
has complied with all of its obligations under this Agreement with respect
thereto; provided, however, that if, after such Registration Statement has been
declared effective, the offering of Registrable Securities pursuant to a Demand
Registration is interfered with by any stop order or injunction of the
Commission or any other governmental agency or court, the Registration Statement
with respect to such Demand Registration will be deemed not to have been
declared effective, unless and until, (i) such stop order or injunction is
removed, rescinded or otherwise terminated, and (ii) the Members’ Representative
or a majority-in-interest of the Demanding Holders, whichever is applicable,
thereafter elect to continue the offering; provided, further, that the Company
shall not be obligated to file a second Registration Statement until a
Registration Statement that has been filed is counted as a Demand Registration
or is terminated.
     2.1.3 Underwritten Offering. If the Members’ Representative or a
majority-in-interest of the Demanding Holders, whichever is applicable, so
elects and such holders so advise the Company as part of their written demand
for a Demand Registration, the offering of such Registrable Securities pursuant
to such Demand Registration shall be in the form of an underwritten offering. In
such event, the right of any holder to include its Registrable Securities in
such registration shall be conditioned upon such holder’s participation in such
underwriting and the inclusion of such holder’s Registrable Securities in the
underwriting to the extent provided herein. All Demanding Holders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the Underwriter or Underwriters
selected for such underwriting by the Members’ Representative or a
majority-in-interest of the holders initiating the Demand Registration,
whichever is applicable.
     2.1.4 Reduction of Offering. If the managing Underwriter or Underwriters
for a Demand Registration that is to be an underwritten offering advises the
Company and the Demanding Holders in writing that the dollar amount or number of
shares of Registrable Securities which the Demanding Holders desire to sell,
taken together with all other shares of Common Stock or other securities which
the Company desires to sell and the shares of Common Stock, if any, as to which
registration has been requested pursuant to written contractual piggy-back
registration rights held by other stockholders of the Company who desire to
sell, exceeds the maximum dollar amount or maximum number of shares that can be
sold in such offering without adversely affecting the proposed offering price,
the timing, the distribution method, or the probability of success of such
offering (such maximum dollar amount or maximum number of shares, as applicable,
the “Maximum Number of Shares”), then the Company shall include in such
registration: (i) first, the Registrable Securities as to which such Demand
Registration has been requested by the Demanding Holders (pro rata in accordance
with the number of shares that each such Person has requested be included in
such registration, regardless of the number of shares held by each such Person
(such proportion is

3

--------------------------------------------------------------------------------

 

referred to herein as “Pro Rata”)) that can be sold without exceeding the
Maximum Number of Shares; (ii) second, to the extent that the Maximum Number of
Shares has not been reached under the foregoing clause (i), the shares of Common
Stock or other securities that the Company desires to sell that can be sold
without exceeding the Maximum Number of Shares; and (iii) third, to the extent
that the Maximum Number of Shares have not been reached under the foregoing
clauses (i) and (ii), the shares of Common Stock or other securities for the
account of other persons that the Company is obligated to register pursuant to
written contractual arrangements with such persons and that can be sold without
exceeding the Maximum Number of Shares.
     2.1.5 Withdrawal. If the Members’ Representative or a majority-in-interest
of the Demanding Holders, whichever is applicable, disapprove of the terms of
any underwriting or are not entitled to include all of their Registrable
Securities in any offering, the Members’ Representative or such
majority-in-interest of the Demanding Holders, whichever is applicable, may
elect to withdraw from such offering by giving written notice to the Company and
the Underwriter or Underwriters of their request to withdraw prior to the
effectiveness of the Registration Statement filed with the Commission with
respect to such Demand Registration. If the Members’ Representative or such
majority-in-interest of the Demanding Holders withdraws from a proposed offering
relating to a Demand Registration, then such registration shall be terminated
and withdrawn and shall not count as a Demand Registration provided for in
Section 2.1.
     2.2 Piggy-Back Registration.
     2.2.1 Piggy-Back Rights. If at any time on or after the Release Date the
Company proposes to file a Registration Statement under the Securities Act with
respect to an offering of equity securities, or securities or other obligations
exercisable or exchangeable for, or convertible into, equity securities, by the
Company for its own account or for stockholders of the Company for their account
(or by the Company and by stockholders of the Company including, without
limitation, pursuant to Section 2.1), other than a Registration Statement
(i) filed in connection with any employee stock option or other benefit plan,
(ii) for an exchange offer or offering of securities solely to the Company’s
existing stockholders, (iii) for an offering of debt that is convertible into
equity securities of the Company or (iv) for a dividend reinvestment plan, then
the Company shall (x) give written notice of such proposed filing to the holders
of Registrable Securities as soon as practicable but in no event less than ten
(10) days before the anticipated filing date, which notice shall describe the
amount and type of securities to be included in such offering, the intended
method(s) of distribution, and the name of the proposed managing Underwriter or
Underwriters, if any, of the offering, and (y) offer to the holders of
Registrable Securities in such notice the opportunity to register the sale of
such number of shares of Registrable Securities as such holders may request in
writing within five (5) days following receipt of such notice (a “Piggy-Back
Registration”). The Company shall cause such Registrable Securities to be
included in such registration and shall use its best efforts to cause the
managing Underwriter or Underwriters of a proposed underwritten offering to
permit the Registrable Securities requested to be included in a Piggy-Back
Registration on the same terms and conditions as any similar securities of the
Company and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method(s) of distribution thereof.
All holders of Registrable Securities proposing to distribute their securities
through a Piggy-Back Registration that involves an Underwriter or Underwriters
shall enter into an underwriting agreement in customary form with the
Underwriter or Underwriters selected for such Piggy-Back Registration.
     2.2.2 Reduction of Offering. If the managing Underwriter or Underwriters
for a Piggy-Back Registration that is to be an underwritten offering advises the
Company and the holders of Registrable Securities in writing that the dollar
amount or number of shares of Common Stock which the Company desires to sell,
taken together with shares of Common Stock, if any, as to which registration has
been demanded pursuant to written contractual arrangements with persons other
than the holders of Registrable Securities hereunder, the Registrable Securities
as to which registration has been requested under this Section 2.2, and the
shares of Common Stock, if any, as to which registration has been requested
pursuant to the written contractual piggy-back registration rights of other
stockholders of the Company, exceeds the Maximum Number of Shares, then the
Company shall include in any such registration:
     (i) If the registration is undertaken for the Company’s account: (A) first,
the shares of Common Stock or other securities that the Company desires to sell
that can be sold without exceeding the Maximum Number of Shares; (B) second, to
the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (A), the shares of Common Stock or other securities, if any,
comprised of Registrable Securities, as to which registration has

4

--------------------------------------------------------------------------------

 

been requested pursuant to the applicable written contractual piggy-back
registration rights of such security holders, Pro Rata, that can be sold without
exceeding the Maximum Number of Shares; and (C) third, to the extent that the
Maximum Number of shares has not been reached under the foregoing clauses
(A) and (B), the shares of Common Stock or other securities for the account of
other persons that the Company is obligated to register pursuant to written
contractual piggy-back registration rights with such persons and that can be
sold without exceeding the Maximum Number of Shares; and
     (ii) If the registration is a “demand” registration undertaken at the
demand of persons other than the holders of Registrable Securities, (A) first,
the shares of Common Stock or other securities for the account of the demanding
persons that can be sold without exceeding the Maximum Number of Shares;
(B) second, to the extent that the Maximum Number of Shares has not been reached
under the foregoing clause (A), collectively the shares of Common Stock or other
securities comprised of Registrable Securities, pro rata, as to which
registration has been requested pursuant to the terms hereof, that can be sold
without exceeding the Maximum Number of Shares; (C) third, to the extent that
the Maximum Number of Shares has not been reached under the foregoing clauses
(A) and (B), the shares of Common Stock or other securities that the Company
desires to sell that can be sold without exceeding the Maximum Number of Shares;
and (D) fourth, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clauses (A), (B) and (C), the shares of Common Stock
or other securities for the account of other persons that the Company is
obligated to register pursuant to written contractual arrangements with such
persons, that can be sold without exceeding the Maximum Number of Shares. .
     2.2.3 Withdrawal. Any holder of Registrable Securities may elect to
withdraw such holder’s request for inclusion of Registrable Securities in any
Piggy-Back Registration by giving written notice to the Company of such request
to withdraw prior to the effectiveness of the Registration Statement. The
Company (whether on its own determination or as the result of a withdrawal by
persons making a demand pursuant to written contractual obligations) may
withdraw a registration statement at any time prior to the effectiveness of the
Registration Statement. Notwithstanding any such withdrawal, the Company shall
pay all expenses incurred by the holders of Registrable Securities in connection
with such Piggy-Back Registration as provided in Section 3.3.
     2.3 Registrations on Form S-3. The holders of Registrable Securities may at
any time and from time to time, request in writing that the Company register the
resale of any or all of such Registrable Securities on Form S-3 or any similar
short-form registration which may be available at such time (“Form S-3”);
provided, however, that the Company shall not be obligated to effect such
request through an underwritten offering. Upon receipt of such written request,
the Company will promptly give written notice of the proposed registration to
all other holders of Registrable Securities, and, as soon as practicable
thereafter, effect the registration of all or such portion of such holder’s or
holders’ Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities or other securities of the
Company, if any, of any other holder or holders joining in such request as are
specified in a written request given within fifteen (15) days after receipt of
such written notice from the Company; provided, however, that the Company shall
not be obligated to effect any such registration pursuant to this Section 2.3:
(i) if Form S-3 is not available for such offering; or (ii) if the holders of
the Registrable Securities, together with the holders of any other securities of
the Company entitled to inclusion in such registration, propose to sell
Registrable Securities and such other securities (if any) at any aggregate price
to the public of less than $500,000. Registrations effected pursuant to this
Section 2.3 shall not be counted as Demand Registrations effected pursuant to
Section 2.1.
3. REGISTRATION PROCEDURES.
     3.1 Filings; Information. Whenever the Company is required to effect the
registration of any Registrable Securities pursuant to Section 2, the Company
shall use its best efforts to effect the registration and sale of such
Registrable Securities in accordance with the intended method(s) of distribution
thereof as expeditiously as practicable, and in connection with any such
request:
     3.1.1 Filing Registration Statement. The Company shall, as expeditiously as
possible and in any event within sixty (60) days after receipt of a request for
a Demand Registration pursuant to Section 2.1, prepare and file with the
Commission a Registration Statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of all Registrable Securities to be registered
thereunder in accordance with the intended method(s) of distribution thereof,
and shall use its best efforts

5

--------------------------------------------------------------------------------

 

to cause such Registration Statement to become and remain effective for the
period required by Section 3.1.3; provided, however, that the Company shall have
the right to defer any Demand Registration for up to thirty (30) days, and any
Piggy-Back Registration for such period as may be applicable to deferment of any
demand registration to which such Piggy-Back Registration relates, in each case
if the Company shall furnish to the holders a certificate signed by the Chief
Executive Officer or President of the Company stating that, in the good faith
judgment of the Board of Directors of the Company, it would be materially
detrimental to the Company and its stockholders for such Registration Statement
to be effected at such time; provided further, however, that the Company shall
not have the right to exercise the right set forth in the immediately preceding
proviso more than once in any 365-day period in respect of a Demand Registration
hereunder.
     3.1.2 Copies. The Company shall, prior to filing a Registration Statement
or prospectus, or any amendment or supplement thereto, furnish without charge to
the holders of Registrable Securities included in such registration, and such
holders’ legal counsel, copies of such Registration Statement as proposed to be
filed, each amendment and supplement to such Registration Statement (in each
case including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such Registration Statement (including each
preliminary prospectus), and such other documents as the holders of Registrable
Securities included in such registration or legal counsel for any such holders
may request in order to facilitate the disposition of the Registrable Securities
owned by such holders.
     3.1.3 Amendments and Supplements. The Company shall prepare and file with
the Commission such amendments, including post-effective amendments, and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and
in compliance with the provisions of the Securities Act until all Registrable
Securities and other securities covered by such Registration Statement have been
disposed of in accordance with the intended method(s) of distribution set forth
in such Registration Statement (which period shall not exceed the sum of one
hundred eighty (180) days plus any period during which any such disposition is
interfered with by any stop order or injunction of the Commission or any
governmental agency or court) or such securities have been withdrawn.
     3.1.4 Notification. After the filing of a Registration Statement, the
Company shall promptly, and in no event more than two (2) business days after
such filing, notify the holders of Registrable Securities included in such
Registration Statement of such filing, and shall further notify such holders
promptly and confirm such advice in writing in all events within two (2)
business days of the occurrence of any of the following: (i) when such
Registration Statement becomes effective; (ii) when any post-effective amendment
to such Registration Statement becomes effective; (iii) the issuance or
threatened issuance by the Commission of any stop order (and the Company shall
take all actions required to prevent the entry of such stop order or to remove
it if entered); and (iv) any request by the Commission for any amendment or
supplement to such Registration Statement or any prospectus relating thereto or
for additional information or of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of the securities covered by such
Registration Statement, such prospectus will not contain an 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 not misleading, and promptly make
available to the holders of Registrable Securities included in such Registration
Statement any such supplement or amendment; except that before filing with the
Commission a Registration Statement or prospectus or any amendment or supplement
thereto, including documents incorporated by reference, the Company shall
furnish to the holders of Registrable Securities included in such Registration
Statement and to the legal counsel for any such holders, copies of all such
documents proposed to be filed sufficiently in advance of filing to provide such
holders and legal counsel with a reasonable opportunity to review such documents
and comment thereon, and the Company shall not file any Registration Statement
or prospectus or amendment or supplement thereto, including documents
incorporated by reference, to which such holders or their legal counsel shall
object.
     3.1.5 State Securities Laws Compliance. The Company shall use its best
efforts to (i) register or qualify the Registrable Securities covered by the
Registration Statement under such securities or “blue sky” laws of such
jurisdictions in the United States as the holders of Registrable Securities
included in such Registration Statement (in light of their intended plan of
distribution) may request and (ii) take such action necessary to cause such
Registrable Securities covered by the Registration Statement to be registered
with or approved by such other Governmental Authorities as may be necessary by
virtue of the business and operations of the Company and do any and all other
acts and things that may be necessary or advisable to enable the holders of
Registrable Securities included in such

6

--------------------------------------------------------------------------------

 

Registration Statement to consummate the disposition of such Registrable
Securities in such jurisdictions; provided, however, that the Company shall not
be required to qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph or subject
itself to taxation in any such jurisdiction.
     3.1.6 Agreements for Disposition. The Company shall enter into customary
agreements (including, if applicable, an underwriting agreement in customary
form) and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities. The
representations, warranties and covenants of the Company in any underwriting
agreement which are made to or for the benefit of any Underwriters, to the
extent applicable, shall also be made to and for the benefit of the holders of
Registrable Securities included in such Registration Statement. No holder of
Registrable Securities included in such Registration Statement shall be required
to make any representations or warranties in the underwriting agreement except,
if applicable, with respect to such holder’s organization, good standing,
authority, title to Registrable Securities, lack of conflict of such sale with
such holder’s material agreements and organizational documents, and with respect
to written information relating to such holder that such holder has furnished in
writing expressly for inclusion in such Registration Statement.
     3.1.7 Cooperation. The principal executive officer of the Company, the
principal financial officer of the Company, the principal accounting officer of
the Company and all other officers and members of the management of the Company
shall cooperate fully in any offering of Registrable Securities hereunder, which
cooperation shall include, without limitation, the preparation of the
Registration Statement with respect to such offering and all other offering
materials and related documents, and participation in meetings with
Underwriters, attorneys, accountants and potential investors.
     3.1.8 Records. The Company shall make available for inspection by the
holders of Registrable Securities included in such Registration Statement, any
Underwriter participating in any disposition pursuant to such Registration
Statement and any attorney, accountant or other professional retained by any
holder of Registrable Securities included in such Registration Statement or any
Underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, as shall be necessary to enable them to exercise
their due diligence responsibility, and cause the Company’s officers, directors
and employees to supply all information requested by any of them in connection
with such Registration Statement.
     3.1.9 Opinions and Comfort Letters. The Company shall furnish to each
holder of Registrable Securities included in any Registration Statement a signed
counterpart, addressed to such holder, of (i) any opinion of counsel to the
Company delivered to any Underwriter and (ii) any comfort letter from the
Company’s independent public accountants delivered to any Underwriter. In the
event no legal opinion is delivered to any Underwriter, the Company shall
furnish to each holder of Registrable Securities included in such Registration
Statement, at any time that such holder elects to use a prospectus, an opinion
of counsel to the Company to the effect that the Registration Statement
containing such prospectus has been declared effective and that no stop order is
in effect.
     3.1.10 Earnings Statement. The Company shall comply with all applicable
rules and regulations of the Commission and the Securities Act, and make
available to its stockholders, as soon as practicable, an earnings statement
covering a period of twelve (12) months, beginning within three (3) months after
the effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
     3.1.11 Listing. The Company shall use its best efforts to cause all
Registrable Securities included in any registration to be listed on such
exchanges or otherwise designated for trading in the same manner as similar
securities issued by the Company are then listed or designated or, if no such
similar securities are then listed or designated, in a manner satisfactory to
the holders of a majority of the Registrable Securities included in such
registration.
     3.2 Obligation to Suspend Distribution. Upon receipt of any notice from the
Company of the happening of any event of the kind described in
Section 3.1.4(iv), or, in the case of a resale registration on Form S-3 pursuant
to Section 2.3 hereof, upon any suspension by the Company, pursuant to a written
insider trading compliance program adopted by the Company’s Board of Directors,
of the ability of all “insiders” covered by such program to transact in the
Company’s securities because of the existence of material non-public
information, each holder of Registrable

7

--------------------------------------------------------------------------------

 

Securities included in any registration shall immediately discontinue
disposition of such Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until such holder receives the
supplemented or amended prospectus contemplated by Section 3.1.4(iv) or the
restriction on the ability of “insiders” to transact in the Company’s securities
is removed, as applicable, and, if so directed by the Company, each such holder
will deliver to the Company all copies, other than permanent file copies then in
such holder’s possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice.
     3.3 Registration Expenses. The Company shall bear all costs and expenses
incurred in connection with any Demand Registration pursuant to Section 2.1, any
Piggy-Back Registration pursuant to Section 2.2, and any registration on Form
S-3 effected pursuant to Section 2.3, and all expenses incurred in performing or
complying with its other obligations under this Agreement, whether or not the
Registration Statement becomes effective, including, without limitation: (i) all
registration and filing fees; (ii) fees and expenses of compliance with
securities or “blue sky” laws (including fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities);
(iii) printing expenses; (iv) the Company’s internal expenses (including,
without limitation, all salaries and expenses of its officers and employees);
(v) the fees and expenses incurred in connection with the listing of the
Registrable Securities as required by Section 3.1.11; (vi) National Association
of Securities Dealers, Inc. fees; (vii) fees and disbursements of counsel for
the Company and fees and expenses for independent certified public accountants
retained by the Company (including the expenses or costs associated with the
delivery of any opinions or comfort letters requested pursuant to
Section 3.1.9); (viii) the fees and expenses of any special experts retained by
the Company in connection with such registration and (ix) the fees and expenses
of one legal counsel selected by the Members’ Representative or the holders of a
majority-in-interest of the Registrable Securities included in such
registration, whichever is applicable. The Company shall have no obligation to
pay any underwriting discounts or selling commissions attributable to the
Registrable Securities being sold by the holders thereof, which underwriting
discounts or selling commissions shall be borne by such holders. Additionally,
in an underwritten offering, all selling stockholders and the Company shall bear
the expenses of the underwriter pro rata in proportion to the respective amount
of shares each is selling in such offering.
     3.4 Information. The holders of Registrable Securities shall provide such
information as may reasonably be requested by the Company, or the managing
Underwriter, if any, in connection with the preparation of any Registration
Statement, including amendments and supplements thereto, in order to effect the
registration of any Registrable Securities under the Securities Act pursuant to
Section 2 and in connection with the Company’s obligation to comply with federal
and applicable state securities laws.
     3.5 Form S-3 Availability. For so long as any Registerable Securities are
outstanding, the Company will (a) not incorporation or reincorporate in any
jurisdiction other than one of the United States; (b) maintain its principal
place of business in the United States; (c) maintain a class of securities
registered under Section 12(b) or 12(g) of the Exchange Act; (d) timely file
when due all reports required to be filed by it under Section 13, 14 or 15(d) of
the Exchange Act (other than reports required pursuant to Items 1.01, 1.02,
2.03, 2.04, 2.05, 2.06, 4.02(a), 6.01, 6.03 or 6.05 of Form 8-K); (e) pay when
due all dividends and installments of any sinking fund relating to preferred
stock, (f) not default on (i) any installments of principal and interest on any
indebtedness or (ii) any rents under any long-term lease such that any such
defaults in the aggregate would be material to the consolidated financial
position of the Company and its subsidiaries, taken as a whole; and (g) maintain
the Common Stock as listed and registered on a national securities exchange or
quoted on the automated quotation system of a national securities association in
accordance with General Instruction I.B.3. to Form S-3.
     3.6 Outstanding Agreements. The Company has provided the Stockholders with
copies of all outstanding agreements providing for the demand registration or
piggyback registration of securities issued by the Company.
4. INDEMNIFICATION AND CONTRIBUTION.
     4.1 Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Stockholder and each other holder of Registrable Securities,
and each of their respective officers, employees, affiliates, directors,
partners, members, attorneys and agents, and each person, if any, who controls a
Stockholder and each other holder of Registrable Securities (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act) (each, an
“Stockholder Indemnified Party”), from and against any expenses, losses,
judgments, claims, damages or liabilities, whether joint or several, arising out
of or based upon any untrue statement (or allegedly untrue

8

--------------------------------------------------------------------------------

 

statement) of a material fact contained in any Registration Statement under
which the sale of such Registrable Securities was registered under the
Securities Act, any preliminary prospectus, final prospectus, summary prospectus
or Disclosure Package contained in the Registration Statement, or any amendment
or supplement to such Registration Statement or Disclosure Package, or arising
out of or based upon any omission (or alleged omission) to state 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 rule or
regulation promulgated thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration; and the Company shall promptly reimburse the Stockholder
Indemnified Party for any legal and any other expenses reasonably incurred by
such Stockholder Indemnified Party in connection with investigating and
defending any such expense, loss, judgment, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such expense, loss, claim, damage or liability arises out of or
is based upon any untrue statement or allegedly untrue statement or omission or
alleged omission made in such Registration Statement, preliminary prospectus,
final prospectus, summary prospectus or Disclosure Package, or any such
amendment or supplement, in reliance upon and in conformity with information
furnished to the Company, in writing, by such selling holder expressly for use
therein. The Company also shall indemnify any Underwriter of the Registrable
Securities, their officers, affiliates, directors, partners, members and agents
and each person who controls such Underwriter on substantially the same basis as
that of the indemnification provided above in this Section 4.1.
     4.2 Indemnification by Holders of Registrable Securities. Each selling
holder of Registrable Securities will, in the event that any registration is
being effected under the Securities Act pursuant to this Agreement of any
Registrable Securities held by such selling holder, indemnify and hold harmless
the Company, each of its directors and officers and each underwriter (if any),
and each other selling holder and each other person, if any, who controls
another selling holder or such underwriter within the meaning of the Securities
Act, against any losses, claims, judgments, damages or liabilities, whether
joint or several, insofar as such losses, claims, judgments, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or allegedly untrue statement of a material fact contained in
any Registration Statement or Disclosure Package under which the sale of such
Registrable Securities was registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained in the Registration
Statement or Disclosure Package, or any amendment or supplement to the
Registration Statement, or arise out of or are based upon any omission or the
alleged omission to state a material fact required to be stated therein or
necessary to make the statement therein not misleading, if the statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by such selling holder expressly for use therein, and
shall reimburse the Company, its directors and officers, and each other selling
holder or controlling person for any legal or other expenses reasonably incurred
by any of them in connection with investigation or defending any such loss,
claim, damage, liability or action. Each selling holder’s indemnification
obligations hereunder shall be several and not joint and shall be limited to the
amount of any net proceeds actually received by such selling holder.
     4.3 Conduct of Indemnification Proceedings. Promptly after receipt by any
person of any notice of any loss, claim, damage or liability or any action in
respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such
person (the “Indemnified Party”) shall, if a claim in respect thereof is to be
made against any other person for indemnification hereunder, notify such other
person (the “Indemnifying Party”) in writing of the loss, claim, judgment,
damage, liability or action; provided, however, that the failure by the
Indemnified Party to notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability which the Indemnifying Party may have to
such Indemnified Party hereunder, except and solely to the extent the
Indemnifying Party is actually prejudiced by such failure. If the Indemnified
Party is seeking indemnification with respect to any claim or action brought
against the Indemnified Party, then the Indemnifying Party shall be entitled to
participate in such claim or action, and, to the extent that it wishes, jointly
with all other Indemnifying Parties, to assume control of the defense thereof
with counsel satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume control of
the defense of such claim or action, the Indemnifying Party shall not be liable
to the Indemnified Party for any legal or other expenses subsequently incurred
by the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that in any action in
which both the Indemnified Party and the Indemnifying Party are named as
defendants, the Indemnified Party shall have the right to employ separate
counsel (but no more than one such separate counsel) to represent the
Indemnified Party and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees

9

--------------------------------------------------------------------------------

 

and expenses of such counsel to be paid by such Indemnifying Party if, based
upon the written opinion of counsel of such Indemnified Party, representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, consent to entry of judgment
or effect any settlement of any claim or pending or threatened proceeding in
respect of which the Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such judgment or settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such claim or proceeding.
     4.4 Contribution.
     4.4.1 If the indemnification provided for in the foregoing Sections 4.1,
4.2 and 4.3 is unavailable to any Indemnified Party in respect of any loss,
claim, damage, liability or action referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, claim, damage, liability or action in such proportion as is
appropriate to reflect the relative fault of the Indemnified Parties and the
Indemnifying Parties in connection with the actions or omissions which resulted
in such loss, claim, damage, liability or action, as well as any other relevant
equitable considerations. The relative fault of any Indemnified Party and any
Indemnifying Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such Indemnified Party or such Indemnifying Party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
     4.4.2 The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 4.4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding Section.
     4.4.3 The amount paid or payable by an Indemnified Party as a result of any
loss, claim, damage, liability or action referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, no holder of Registrable
Securities shall be required to contribute any amount in excess of the dollar
amount of the net proceeds (after payment of any underwriting fees, discounts,
commissions or taxes) actually received by such holder from the sale of
Registrable Securities which gave rise to such contribution obligation. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
5. UNDERWRITING AND DISTRIBUTION.
     5.1 Rule 144. The Company covenants that it shall file any reports required
to be filed by it under the Securities Act and the Exchange Act and shall take
such further action as the holders of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holders to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or any similar Rule or regulation
hereafter adopted by the Commission.
6. MISCELLANEOUS.
     6.1 Assignment; No Third Party Beneficiaries. This Agreement and the
rights, duties and obligations of the Company hereunder may not be assigned or
delegated by the Company in whole or in part. This Agreement and the rights,
duties and obligations of the holders of Registrable Securities hereunder may be
freely assigned or delegated by such holder of Registrable Securities in
conjunction with and to the extent of any transfer of Registrable Securities by
any such holder. This Agreement and the provisions hereof shall be binding upon
and shall inure to the benefit of each of the parties and their respective
successors, and the permitted assigns of the Stockholder or holder of
Registrable Securities or of any assignee of the Stockholder or holder of
Registrable Securities. The Company acknowledges that the Registerable
Securities may be held from time to time by an escrow agent pursuant to the
Escrow Agreement and specifically consents to the exercise of the rights of the
Stockholders under this Agreement

10

--------------------------------------------------------------------------------

 

in the manner described in the Escrow Agreement. This Agreement is not intended
to confer any rights or benefits on any persons that are not party hereto other
than as expressly set forth in Article 4 and this Section 6.1.
     6.2 Notices. All notices, demands, requests, consents, approvals or other
communications (collectively, “Notices”) required or permitted to be given
hereunder or which are given with respect to this Agreement shall be in writing
and shall be personally served, delivered by reputable air courier service with
charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile,
addressed as set forth below, or to such other address as such party shall have
specified most recently by written notice. Notice shall be deemed given on the
date of service or transmission if personally served or transmitted by telegram,
telex or facsimile; provided, that if such service or transmission is not on a
business day or is after normal business hours, then such notice shall be deemed
given on the next business day. Notice otherwise sent as provided herein shall
be deemed given on the next business day following timely delivery of such
notice to a reputable air courier service with an order for next-day delivery.
     To the Company:
     JK Acquisition Corp.
     4400 Post Oak Parkway, Suite 2530
     Houston, Texas 77057
     Facsimile No.: (713) 552-9226
     Attn: President
     with a copy to:
     Patton Boggs LLP
     2001 Ross Avenue, Suite 3000
     Dallas, Texas 75201
     Facsimile No.: (214) 758-1550
     Attn: Fred S. Stovall, Esq.
     To a Stockholder, to:
     The address of such Stockholder as set forth on the signature pages hereto
     with a copy to:
     Catalyst/Hall Growth Capital Management Co., LLC
     2 Riverway, Suite 1710
     Houston, Texas 77056
     Facsimile No.: (713) 623-0473
     Attention: Ron Nixon and Rick Herrman
     [Designee]
     [Address]
     [Address]
     [Facsimile No.:]
     [Attention:]
     Franklin, Cardwell & Jones, P.C.
     1001 McKinney, Suite 1800
     Houston, Texas 77002
     Attention: Randolph Ewing, Esq.
     Facsimile: (713) 623-0478
     6.3 Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that

11

--------------------------------------------------------------------------------

 

there shall be added as a part of this Agreement a provision as similar in terms
to such invalid or unenforceable provision as may be possible that is valid and
enforceable.
     6.4 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, and all of which taken together shall
constitute one and the same instrument.
     6.5 Entire Agreement. This Agreement (including all agreements entered into
pursuant hereto and all certificates and instruments delivered pursuant hereto
and thereto) constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede all prior and contemporaneous agreements,
representations, understandings, negotiations and discussions between the
parties, whether oral or written.
     6.6 Modifications and Amendments. No amendment, modification or termination
of this Agreement shall be binding upon any party unless executed in writing by
such party.
     6.7 Titles and Headings. Titles and headings of sections of this Agreement
are for convenience only and shall not affect the construction of any provision
of this Agreement.
     6.8 Waivers and Extensions. Any party to this Agreement may waive any
right, breach or default which such party has the right to waive, provided that
such waiver will not be effective against the waiving party unless it is in
writing, is signed by such party, and specifically refers to this Agreement.
Waivers may be made in advance or after the right waived has arisen or the
breach or default waived has occurred. Any waiver may be conditional. No waiver
of any breach of any agreement or provision herein contained shall be deemed a
waiver of any preceding or succeeding breach thereof or of any other agreement
or provision herein contained. No waiver or extension of time for performance of
any obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.
     6.9 Remedies Cumulative. In the event that the Company fails to observe or
perform any covenant or agreement to be observed or performed under this
Agreement, the Stockholder or any other holder of Registrable Securities may
proceed to protect and enforce its rights by suit in equity or action at law,
whether for specific performance of any term contained in this Agreement or for
an injunction against the breach of any such term or in aid of the exercise of
any power granted in this Agreement or to enforce any other legal or equitable
right, or to take any one or more of such actions, without being required to
post a bond. None of the rights, powers or remedies conferred under this
Agreement shall be mutually exclusive, and each such right, power or remedy
shall be cumulative and in addition to any other right, power or remedy, whether
conferred by this Agreement or now or hereafter available at law, in equity, by
statute or otherwise.
     6.10 Governing Law. This Agreement shall be governed by, interpreted under,
and construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed within the State of New York,
without giving effect to any choice-of-law provisions thereof that would compel
the application of the substantive laws of any other jurisdiction.
     6.11 Waiver of Trial by Jury. Each party hereby irrevocably and
unconditionally waives the right to a trial by jury in any action, suit,
counterclaim or other proceeding (whether based on contract, tort or otherwise)
arising out of, connected with or relating to this Agreement, the transactions
contemplated hereby, or the actions of the Stockholders in the negotiation,
administration, performance or enforcement hereof.
[Remainder of this page intentionally left blank; signature pages follows.]

12

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be executed and delivered by their duly authorized representatives
as of the date first written above.

                      JK ACQUISITION CORP.    
 
                              By: Keith D. Spickelmier, President    
 
                    CATALYST/HALL GROWTH CAPITAL MANAGEMENT CO., LLC (as the
Members’ Representative)    
 
                              By: Rick Herrman, President    
 
                    [DESIGNEE] (as the Members’ Representative)    
 
                              By: [Name, Title]    
 
                    STOCKHOLDERS:    
 
                    [INVESTOR]    
 
               
 
  By:                          
 
  Name:                          
 
  Title:                          
 
               
 
                    Address for Notices:    
 
                    [Address]         [Address]         [Facsimile No:]    
 
                    CATALYST/HALL GROWTH CAPITAL, LP    
 
                    By:   Catalyst/Hall Growth Capital Management Co., LLC      
      Its sole general partner    
 
               
 
      By:        
 
               
 
      Name:   Rick Herrman    
 
      Title:   President    
 
                    Address for Notices:    
 
                    [Address]         [Address]         [Facsimile No:]    

Registration Rights Agreement – Signature Pages

 

--------------------------------------------------------------------------------

 

                      CATALYST/HALL PRIVATE EQUITY, LP    
 
                    By:   Catalyst/Hall Private Equity Management
Company, LLC    
 
      Its   sole general partner    
 
               
 
      By:        
 
               
 
      Name:   Rick Herrman    
 
      Title:   President    
 
                    Address for Notices:    
 
                    [Address]         [Address]         [Facsimile No:]    
 
                    CATALYST CAPITAL PARTNERS I, LTD.    
 
                    By:   The Catalyst Group, Inc.             Its sole general
partner    
 
               
 
      By:        
 
               
 
      Name:   Rick Herrman    
 
      Title:   Vice President    
 
                    Address for Notices:    
 
                    [Address]         [Address]         [Facsimile No:]    
 
                    CATALYST CAPITAL PARTNERS II, LTD.    
 
                    By:   The Catalyst Group II, Inc.             Its sole
general partner    
 
               
 
      By:        
 
               
 
      Name:   Rick Herrman    
 
      Title:   Vice President    
 
                    Address for Notices:    
 
                    [Address]         [Address]         [Facsimile No:]    

Registration Rights Agreement – Signature Pages

 

--------------------------------------------------------------------------------

 

                      CRF AIR, LLC    
 
               
 
  By:                               Name:   Jay C. Jimerson         Title:  
Manager    
 
                    Address for Notices:    
 
                    [Address]         [Address]         [Facsimile No:]    
 
                              ROBERT P. VILYUS    
 
                    Address for Notices:    
 
                    [Address]         [Address]         [Facsimile No:]    
 
                              ALLEN NEEL    
 
                    Address for Notices:    
 
                    [Address]         [Address]         [Facsimile No:]    
 
                              DAVID CUDD    
 
                    Address for Notices:    
 
                    [Address]         [Address]         [Facsimile No:]    

Registration Rights Agreement – Signature Pages

 

--------------------------------------------------------------------------------

 

                                PAUL CULBRETH    
 
                    Address for Notices:    
 
                    [Address]         [Address]         [Facsimile No:]    

Registration Rights Agreement – Signature Pages