Exhibit 10.3
 
 
REGISTRATION RIGHTS AGREEMENT
 
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the
[          ] day of [          ] 200[          ], by and among JK Acquisition
Corp., a Delaware corporation (which shall be renamed MS Energy Services, Inc.
at the Effective Time, the “Company”), Catalyst/Hall Growth Capital Management
Co., LLC, a Texas limited liability company (“Catalyst”), and SG-Directional,
LLC, an Arkansas limited liability company (“SG-Directional” and together with
Catalyst, 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 Second
Amended and Restated Agreement and Plan of Merger, dated as of August
          , 2007, among the Company, Multi-Shot, Inc., Multi-Shot, LLC,
Catalyst, SG-Directional 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 [                ],
200[  ] executed and delivered by the Company, the Members’ Representative, and
Zions First National Bank pursuant to Section 2.04(b) of the Merger Agreement.

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“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.
 
“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, Cash Exercise 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.

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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 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.

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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 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

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(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 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

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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 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.

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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 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,

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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 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

8

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(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 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

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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
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.

10

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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
 
SG-Directional, LLC
P.O. Box 3417
Little Rock, Arkansas 72203-3417
Facsimile No.: (501) 377-3463
Attention: Ronald M. Clark
 
Franklin, Cardwell & Jones, P.C.
1001 McKinney, Suite 1800
Houston, Texas 77002
Facsimile No.: (713) 623-0478
Attention: Randolph Ewing, Esq.
 
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 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.

11

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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

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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
 
SG-DIRECTIONAL, LLC
(as the Members’ Representative)
 
By: The Stephens Group, LLC,
          Its Manager
 

  By: 
    

  Name:  Ronald M. Clark

Title: Senior Vice President

 
STOCKHOLDERS:
 
SG-DIRECTIONAL, LLC
 

  By:  The Stephens Group, LLC

Its Manager
 

  By: 
    

  Name:  Ronald M. Clark

  Title:  Senior Vice President

 
Address for Notices:
 
Registration Rights Agreement — Signature Pages

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

 

 
SG-Directional, LLC
P.O. Box 3417
Little Rock, Arkansas 72203-3417
Facsimile No.: (501) 377-3463
Attention: Ronald M. Clark
 
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:
 
c/o 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
 
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:
 
Registration Rights Agreement — Signature Pages

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c/o 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
 
CATALYST CAPITAL PARTNERS I, LTD.
 

  By:   The Catalyst Group, Inc.

Its sole general partner
 

  By: 
    

  Name:  Rick Herrman

  Title:  Vice President

 
Address for Notices:
 
c/o 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
 
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:
 
c/o 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
 
Registration Rights Agreement — Signature Pages

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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