exv4w2



 






Exhibit 4.2




GLOBAL SECURE CORP.




INVESTOR RIGHTS AGREEMENT




     This Agreement dated as of August 9, 2005 is entered into by and among Global Secure Corp., a
Delaware corporation (the “Company”), and Sky Capital Enterprises Inc., a Delaware corporation (the
“Investor”).



Recitals




     WHEREAS, the Investor (and an Affiliated Party) have agreed to loan the Company up to
$1,500,000 pursuant to a loan agreement and promissory note (collectively, the “Loan Documents”);
and



     WHEREAS, the Investor currently has the right to designate a majority of the Company’s board
of directors pursuant to the terms of the Series A Convertible Preferred Stock (the “Shares”); and



     WHEREAS, the Investor previously had certain management approval rights as set forth in the
Company’s Amended and Restated Bylaws; and



     WHEREAS, the Investor has agreed to expand the Company’s Board of Directors and to designate
and elect new independent members to the Board; and



     WHEREAS, the Investor and the Company have agreed to move the Investor’s management approval
rights from the Bylaws into this Agreement; and



     WHEREAS, the Company and the Investor desire to provide for certain arrangements with respect
to certain covenants of the Company; and



     WHEREAS, in connection with the foregoing, the Company has entered into a registration rights
agreement of even data herewith (“Registration Rights Agreement”);



     NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this
Agreement, the parties hereto agree as follows:



     1. Certain Definitions.



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



          “Affiliated Party” means, with respect to the Investor, any person or entity which,
directly or indirectly, controls, is controlled by or is under common control with the Investor,
including, without limitation, any general partner, officer or director of the Investor and any
venture capital fund now or hereafter existing which is controlled by one or more general partners
of, or shares the same management company as, the Investor.



 









 





          “Common Stock” means the common stock, $0.0001 par value per share, of the Company.



          “Company” has the meaning ascribed to it in the introductory paragraph hereto.



          “Company Subsidiary” means any entity in which the Company has the power to elect a
majority of the directors, managers or similar governing body, or otherwise has the power to direct
the business and policies of that entity.



          “Series A Certificate” means the Certificate of Designation of Series A Convertible
Preferred Stock filed on April 15, 2003.



          “Sky Stockholders” means the stockholders of the Company set forth on Exhibit
A hereto.



     2. Representations and Warranties. The Company represents and warrants that: (a) it
is a corporation duly organized, validly existing and in good standing under the laws of the state
of its incorporation and is qualified to do business and is in good standing under the laws of
every state where its failure to so qualify would have a material and adverse effect on the
business, operations, property or other condition of the Company; (b) the execution, issuance and
delivery of this Agreement and the Registration Rights Agreement by the Company are within its
corporate powers and have been duly authorized, and they are valid, binding and enforceable in
accordance with their respective terms, and they are not in violation of law or of the terms of the
Company’s Certificate of Incorporation or Bylaws and do not result in the breach of or constitute a
default under any indenture, agreement or undertaking to which the Company is a party or by which
it or its property may be bound or affected; and (c) to the knowledge of the Company, no
authorization or approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery and performance by the
Company of this Agreement and the Registration Rights Agreement, except those as have been
obtained.



     3. Covenants.



          (a) Negative Covenants. In addition to the voting rights in the Series A Certificate,
so long as any Shares are outstanding and have not been converted into Common Stock, the vote or
written consent of the holders of a majority of the Shares, voting separately as a class, shall be
required for any action or inaction of the Company (or any Company Subsidiary) which involves any
of the following:




1. the approval, material modification or amendment of the Company’s annual capital
expenditure budget;




2. the approval, material modification or amendment of the Company’s annual
operating budget;




3. the incurrence of indebtedness for borrowed money (or the guarantying of
indebtedness of another person or entity) in excess of an aggregate of $300,000



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other than a loan from a commercial lender used to repay in full all indebtedness of
the Company to the Investor;




4. any merger of the Company (or Company Subsidiary) and any other entity
(regardless of which entity survives the merger) or the acquisition by the Company
(or Company Subsidiary) of another entity’s assets, except for the purpose of
effecting an internal reorganization;




5. the liquidation, dissolution or winding-up of the Company or the sale of all or
substantially all of the Company’s assets (or the assets of a Company Subsidiary);




6. the authorization, creation or issuance of any class or series, or any shares of
any class of series, of capital stock having any preference or priority over or in
parity with the Series A Preferred Stock as to dividends or as to distributions upon
liquidation, dissolution or winding up of the Company, or having redemption rights,
or anti-dilution protection superior to or in parity with those applicable to the
Series A Preferred Stock;




7. amendment of the Certificate of Incorporation or the Bylaws of the Company;




8. any increase or decrease in the size of the Company’s Board of Directors;




9. the issuance of any equity securities (including in an initial public offering)
or the issuance of securities exchangeable or exercisable for, or convertible into
equity securities, other than pursuant to the 2005 Incentive Stock Plan of the
Company;




10. any amendment of the 2005 Incentive Stock Plan of the Company;




11. the payment of any dividends or distributions on shares of Common Stock of the
Company;




12. the redemption, retirement or purchase or other acquisition of any shares of the
Company’s capital stock;




13. any agreement or transaction (including without limitation compensation
arrangements): (i) by or among the Company (or any Company Subsidiary) and any of
the Company’s (or any Company Subsidiary’s) officers or directors or managers (or an
affiliate of any officer, director or manager); or (ii) by or among the Company (or
any Company Subsidiary) and any individual (or entity in which any such person owns
a beneficial interest) related by blood, adoption or marriage to any of the
Company’s (or any Company Subsidiary’s) officers or directors or managers;




14. any increase in the authorized number of shares of Series A Convertible
Preferred Stock;



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15. any transaction that alone or together with a series of transactions would cause
the mandatory conversion of the Series A Convertible Preferred Stock into Common
Stock.



     (b) Affirmative Covenants.




1. Investor.




a) Subject to the Investor’s continuing right to designate and elect a
majority of the members of the Company’s Board of Directors, the Investor
agrees (i) upon satisfactory arrangements being made between each resigning
director and the Company to compensate such resigning director for such
director’s past service on the Board and other services that such director
may have provided to the Company, to cause its current designees (other than
Michael Recca) to the Company’s Board of Directors to resign concurrent with
the closing of an initial public offering by the Company, and (ii) to take
all actions necessary to amend the Company’s Bylaws to remove the management
approval rights in Article III, Section 14 thereof.




b) If the Investor exercises its right to prevent the issuance of Common
Stock in the Company’s initial public offering and such veto occurs after
“red herring” prospectuses have been printed, the Investor agrees to
reimburse the Company to the extent the Company is obligated to reimburse
the underwriters for their reasonable expenses incurred in the offering;
provided, however, that the Investor shall have no such obligation to
reimburse the Company unless all of the following conditions are satisfied:
(i) the actual offering price to the public would have been within or above
the price range in the printed “red herring” prospectuses, (ii) each of the
Sky Stockholders was given the opportunity to sell up to 25% of the shares
of Company Common Stock held by such Sky Stockholder in the firm commitment
portion of the initial public offering, (iii) the registered broker-dealer
affiliate of the Investor was given the opportunity (unless prohibited by
applicable law or by the lead underwriters in their discretion) to
participate as an underwriter in the offering, and (iv) such affiliate was
given the opportunity (unless prohibited by applicable law or by the lead
underwriters in their discretion) to be named as an underwriter on the front
cover of the prospectus.




2. Company. So long as any Shares are outstanding and have not been
converted into Common Stock, the Company covenants and agrees that it will perform
and observe the following covenants and provisions and will cause each Company
Subsidiary to perform and observe such of the following covenants and provisions as
are applicable to such Company Subsidiary:



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a) Take all actions necessary to enforce the Investor’s continuing right to
designate and elect a majority of the members of the Company’s Board of
Directors as set forth in Section 3 of the Series A Certificate.




b) Take all actions necessary to cause each Company Subsidiary to comply
with the negative covenants in Section 3(a).



(c) Inspection and Observation.




1. The Company shall permit the Investor, or any authorized representative thereof,
to visit and inspect the properties of the Company, including its corporate and
financial records, and to discuss its business and finances with officers of the
Company, during normal business hours following reasonable notice and as often as
may be reasonably requested.



2. The Company will permit the Investor to designate one person to attend all
meetings of the Board of Directors of the Company as an observer, and shall provide
the Investor with such notice and other information with respect to such meetings
(and any written consents) as are delivered to the directors of the Company at the
same time such documents are sent to the directors.



(d) Termination of Covenants. This Agreement and all of the Investor’s rights and the
Company’s obligations hereunder shall terminate upon the conversion of all Shares into Common
Stock.



     4. Transfers of Rights. This Agreement, and the rights and obligations of the
Investor hereunder, may not be assigned by the Investor to any other person or entity.



     5. General.



          (a) Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement.



          (b) Specific Performance. In addition to any and all other remedies that may be
available at law in the event of any breach of this Agreement, the Investor shall be entitled to
specific performance of the agreements and obligations of the Company hereunder and to such other
injunctive or other equitable relief as may be granted by a court of competent jurisdiction.



          (c) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.



          (d) Notices. All notices, requests, consents and other communications under this
Agreement shall be in writing and shall be deemed delivered (i) three business days after being
sent by registered or certified mail, return receipt requested, postage prepaid or (ii) one
business day after being sent via a reputable nationwide overnight courier service guaranteeing
next business day delivery, in each case to the intended recipient as set forth below:



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If to the Company, at 2600 Virginia Ave. NW, Suite 600, Washington, DC 20037, Attention:
General Counsel, or at such other address as may have been furnished in writing by the
Company to the other parties hereto; or




If to the Investor, at 110 Wall Street, 2nd Floor, New York, NY 10005, Attention: Michael
Brigante, or at such other address as may have been furnished in writing by the Investor to
the other parties hereto, with a copy to Frederic J. Gruder, Esq., 775 Park Ave., Suite 255,
Huntington, NY, 11743.



     Any party may give any notice, request, consent or other communication under this Agreement
using any other means (including, without limitation, personal delivery, messenger service,
telecopy, first class mail or electronic mail), but no such notice, request, consent or other
communication shall be deemed to have been duly given unless and until it is actually received by
the party for whom it is intended. Any party may change the address to which notices, requests,
consents or other communications hereunder are to be delivered by giving the other parties notice
in the manner set forth in this Section.



          (e) Complete Agreement. This Agreement and the Registration Rights Agreement
constitute the entire agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings relating to such subject
matter.



          (f) Amendments and Waivers. This Agreement may be amended or terminated and the
observance of any term of this Agreement may be waived with respect to all parties to this
Agreement (either generally or in a particular instance and either retroactively or prospectively),
with the written consent of the Company and the Investor. The Company shall give prompt written
notice of any amendment or termination hereof or waiver hereunder to any party hereto that did not
consent in writing to such amendment, termination or waiver. Any amendment, termination or waiver
effected in accordance with this Section shall be binding on all parties hereto, even if they do
not execute such consent. No waivers of or exceptions to any term, condition or provision of this
Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, condition or provision.



          (g) Pronouns. Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns
and pronouns shall include the plural, and vice versa.



          (h) Counterparts; Facsimile Signatures. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of which together shall
constitute one and the same document. This Agreement may be executed by facsimile signatures.



          (i) Section Headings and References. The section headings are for the convenience of
the parties and in no way alter, modify, amend, limit or restrict the contractual obligations of
the parties. Any reference in this agreement to a particular section or subsection shall refer to
a section or subsection of this Agreement, unless specified otherwise.



(Signature page follows.)




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Executed as of the date first written above.




	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 	 	GLOBAL SECURE CORP.	 	 
	 	 	By:	 	     /s/ Craig R. Bandes
 

	 	 
	 	 	Name:	 	     Craig R. Bandes	 	 
	 	 	 	 	
 
	 	 
	 	 	
Title:	 	     President and CEO	 	 
	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 
	 	 	INVESTOR:	 	 
	 	 	SKY CAPITAL ENTERPRISES INC.	 	 
	 	 	 	 	 	 	 
	 	 	
By:	 	     /s/ Ross H. Mandell	 	 
	 	 	 	 	 
	 	 
	 	 	
Name:	 	     Ross H. Mandell	 	 
	 	 	 	 	
 
	 	 
	 	 	
Title:	 	     President and CEO	 	 
	 	 	 	 	
 
	 	 





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EXHIBIT A — Sky Stockholders






Steven Mountain

Anthony Umney

David King

Anthony Umney

Trevor & Barbara Law

Robert Atkinson

Christopher Hodgson

Ian Simm

Jeffrey Millard

Rosewood Solutions Ltd

L. C. King

Barry Whitehead

James Colquhoun

Robert Atkinson

John Turner

TECC Service Ltd

Jaeger Edwards

Trusttees of S Jaeger & Son

Christopher Hodgson

Robert Houlton

Henry Montlake

Robert Houlton

Jeff Rhoads

S. Wander

Jeff Rhoads

D. Pettet

Maarten Mertens

Euro Log

David Child

Bank SCS Alliance

M. Malone

Task Force Movement

Douglas Kerr

Kenneth Bauso

John Randel

CGM Properties, Inc.

Duncan Macleod

Robert Johnson

Steven Tandy

Douglas Kerr

William Taylor

Jill Clark

Andrew Clark

Gilbert Vasey






Andrew Sutton

David Brett Williams

Brian John Thomas

Gordon Fisher

William Wormald

NCL Investment Ltd

Robert Williams

Robert Williams

Richard Pain

Michael Malone

Mr. Krantz

Kevin Oelrichs

David & Ela Rhodes

Paul Harrison

Martin Johnson

Ian Sprott

Martin Rayfield

EJ Dent

Mr. Crabtree

Allen Butler

Philip Clark

Jaeger Pension

Jaeger Edwards

Anthony O’Hanlon

Martin & Selwyn Ball

PS Adam Business

John Stapleton

Mark Tetley

Francis Bellion

Steven Liebman

Robert Anderson

Jerald Green

JDR Smith

Acacia Carpentry (Andrew Smith)

Frederick Robbinson

EJ Dent

A Bates

RJ Balckman

Paul Cliff

Comford Plus Product Ltd

Aristides Marinos (Aresti)

Kenson Contractors

Kenson Plant Hire

Steve Bentley






Philip Harrison

Bryan Hunt

Leslie Barlette

Simon Westbrook

A.J. Nagle

John & Pamela Clark

Carmen Schuller

Joseph & Nancy Ebersole

Task Force Properties

ABS Pension

S. Wander

W. A. Jack

Steven Cox

AB Greenfield

Peter R Wakeham

PW Lever

Mark Samuel

Peter Liebman

Gary Tann

Derek Clements

Raymond Nind

Kevin Burch

Collin Suckling

Sidney A Mitson

Paul S Kregor

Garnett Faulkner

J Davies

Lombard

David Miles

Ronald Jahn

Cordelia Lambie-Nairn

Kent & Son Butchers Ltd

Michael Baily

Anthony Stitt

Thomas Myers

Dorothy Bevins

Colin Witt

STO International

Philip Cole

David Lotempio

John Smith

Golden Sky Partnership

Interbaltic Investments

Ivan Cunningham

Simon Robinson








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Wai Wah Tang

Kevin Brian

Paul Harrison

Frank Pine Ltd

Andrew Hogan

Peter Lapin

Art Telford

Mary Laidlaw

Fabian Brewster

Robert Houlton

Martin Gaines

Fane Murray

Holmes Valves Ltd (Holmes)

Bradley Thurrell

Adam & Co. PLC (Tylden Wright)

Osen Structures (Neil McDonald)

Brian Morgan

John Herschel

Hugh Somerville

Trehaven League Ltd

John Cunningham

Handano Holding Ltd

George Piper

Michael & Paul Jordan

James Ebersole

Philip Wood

Ian Sprott

Ayad & Fatina Jaber

John Stapleton

The Goen Group

Edward Quinn

Stuart Liddle Grassie

John Atkinson

Allen Needle

Peter Allen

Gerald Patrick

John Meeks

Grange Property Holdings (Fenwick)

Malcolm & Wendy Evans

Peter Van Wyngaarden

Alexander Cato

Mario Bianchin






Brendon Deering

Mr. Bishoff

Paul Thackray

O’Phalen Construction

Mamdouh Salem

Michael & Paul Jordan

Mr. & Mrs. Reeve

Mark Vickers

S. Lindberg

Anthony Brook

Henry Roy

Ian Robertson

Ian Robertson Trust 1

Rod Eaton

Steven Anderson

Jeff Spittles

Robert Lewis

Linda Buzzard

Brian Shand

Julian Glasspole

William Coburn

Rodger Pedley

BA Chard

Philip Rushby

Mr. McBride

Mr. McKenna

Mr. Tissiman

Mr. Gregory

Mr. McLeod

Leslie Gallop

Mr. Weatcroft

Stuart Smith

Joseph Cosenza

James Ure

Sean Costello

Ian Robertson Trust

Eamond Murray

Simon Robinson

Rosewood Solutions Ltd

T&S Williamson

Franchesco Mastrandreas

James Colquhoun

Allen Woodberry

Steven Wander

WT Brown

Anthony Banks






Ray Seedle

Albion Drilling

A. Jhavery

Thomas Forsythe

Brian Graham

Paul Goodwin

Douglas Kerr

Peter & Christine Watkinson

Mark Vickers

Andrew Hogan

Andrew Urban

Douglas Kerr

Paul Harrison

Ian Gerstein









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