**EXHIBIT 4.6**

 

**REGISTRATION RIGHTSAGREEMENT**

 

**THIS****REGISTRATION RIGHTS AGREEMENT**(this “Agreement”), dated as of [                         ],2005, is by and among **TRI-S SECURITYCORPORATION**, a Georgia corporation (the “Company”), and eachof the investors whose names appear on the signature pages hereof (each an“Investor” and, collectively, the “Investors”).

 

The Company has agreed, on the terms andsubject to the conditions set forth in the Company’s Confidential PrivateOffering Memorandum dated July 26, 2005, as the same may be amended orsupplemented from time to time (the “Memorandum”), and the SubscriptionAgreement executed by each Investor and accepted by the Company on [                     ],2005 (collectively, the “Subscription Agreements”), to issue and sell toeach Investor a Note and Warrant (each as hereinafter defined).  The Notes are convertible into shares (the “ConversionShares”) of the Company’s common stock, par value $0.001 per share (the “CommonStock”), in accordance with their terms, and the Warrants are exercisableinto shares (the “Warrant Shares”) of Common Stock in accordance withtheir terms.

 

In order to induce the Investors to purchasethe Notes and Warrants, the Company has agreed to provide certain registrationrights under the Securities Act of 1933, as amended (the “Securities Act”),and under applicable state securities laws.

 

In consideration of each Investor purchasinga Note and Warrant, and other good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, the parties agree as follows:

 

**1.****                                      DEFINITIONS.**

 

For purposes of this Agreement, the followingterms shall have the meanings specified below:

 

“Business Day” means any day otherthan a Saturday, a Sunday or a day on which the Commission is closed or onwhich banks in the City of Atlanta, Georgia are authorized by law to be closed.

 

“Commission” means the Securities andExchange Commission.

 

“Effective Date” means the date onwhich the Registration Statement covering the resale of the RegistrableSecurities is declared effective by the Commission.

 

“Filing Deadline” the date which isthirty (30) days after the completion of the offering of Notes and Warrantscontemplated by the Memorandum.

 

“Holder” means any person owning orhaving the right to acquire, through conversion of the Notes, exercise of theWarrants or otherwise, Registrable Securities, including initially eachInvestor and thereafter any permitted assignee thereof.

 

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“Note” means each of the 10% Callable,Convertible Promissory Notes offered for sale pursuant to the Memorandum andissued by the Company.

 

“Registrable Securities” means theConversion Shares, the Warrant Shares and any shares of capital stock issued orissuable from time to time (with any adjustments) in replacement of, inexchange for or otherwise in respect of, the Conversion Shares or the WarrantShares.

 

“Registration Deadline” means theearlier of: (i) the date which is sixty (60) days after the FilingDeadline; and (ii) the date on which the Company delivers a PrepaymentNotice (as defined in the Notes) to any Investor.

 

“Registration Statement” means aregistration statement or statements prepared in compliance with the SecuritiesAct and pursuant to Rule 415 under the Securities Act (“Rule 415”)or any successor rule providing for the offering of securities on acontinuous or delayed basis.

 

“Warrant” means each of the Warrantsto purchase Common Stock offered for sale pursuant to the Memorandum and issuedby the Company.

 

**2.****                                      REGISTRATION.**

 

(a)                                  Filing of Registration Statement.  On or before the Filing Deadline, the Companyshall use its best efforts to prepare and file with the Commission aRegistration Statement on Form S-3 as a “shelf” registration statementunder Rule 415 covering the resale of a number of shares of RegistrableSecurities equal to one hundred percent (100%) of the number of shares ofCommon Stock issuable upon conversion of the Notes and exercise of the Warrantsin full (such number to be determined without regard to any restriction on suchconversion or exercise).  SuchRegistration Statement shall state, to the extent permitted by Rule 416under the Securities Act, that it also covers such indeterminate number ofadditional shares of Common Stock as may become issuable upon the conversion ofthe Notes and exercise of the Warrants in order to prevent dilution resultingfrom stock splits, stock dividends or similar events.

 

(b)                                 Alternative Registration Statement.  Notwithstanding the foregoing paragraph 2(a),if on the Filing Deadline, the Company does not meet the eligibilityrequirements for filing a Registration Statement on Form S-3, then in suchcase the Company shall instead prepare and file with the Commission aRegistration Statement meeting the foregoing requirements on Form S-1 or Form S-2.

 

(c)                                  Effectiveness.  The Company shall use its best efforts tocause the Registration Statement to become effective as soon as practicablefollowing the filing thereof, but in no event later than the RegistrationDeadline.  The Company shall respondpromptly to any and all comments made by the staff of the Commission withrespect to the Registration Statement, and shall submit to the Commission,within three (3) Business Days after the Company learns that no review ofthe Registration Statement will be made by the staff of the Commission or thatthe staff of the Commission has no further comments on the RegistrationStatement, as the case may be, a request for acceleration of the effectivenessof such Registration Statement to a time and date not later than

 

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three (3) BusinessDays after the submission of such request. The Company will maintain the effectiveness of each RegistrationStatement filed pursuant to this Agreement until the earliest to occur of: (i) thedate on which all of the Registrable Securities eligible for resale thereunderhave been publicly sold pursuant to either the Registration Statement or Rule 144under the Securities Act or any successor provision (“Rule 144”); (ii) thedate on which all of the Registrable Securities remaining to be sold under suchRegistration Statement (in the reasonable opinion of counsel to the Company)may be immediately sold to the public under Rule 144(k) under theSecurities Act or any successor provision; and (iii) the date that is 120days after the Effective Date (the period beginning on the date hereof andending on the earliest to occur of (i), (ii) or (iii) above beingreferred to herein as the “Registration Period”).

 

(d)                                 Registration of Other Securities.  The Company shall not include any securitiesother than Registrable Securities on any Registration Statement filed by theCompany on behalf of the Holders pursuant to the terms hereof.

 

**3.****                                      OBLIGATIONS OF THE COMPANY.**

 

In addition to performing its obligationshereunder, including, without limitation, those pursuant to Section 2above, the Company shall, with respect to each Registration Statement:

 

(a)                                  prepare and file with the Commission such amendments and supplementsto such Registration Statement and the prospectus used in connection with suchRegistration Statement as may be necessary to comply with the provisions of theSecurities Act or to maintain the effectiveness of such Registration Statementduring the Registration Period, or as may be reasonably requested by a Holderin order to incorporate information concerning such Holder or such Holder’sintended method of distribution;

 

(b)                                 so long as a Registration Statement is effective covering the resaleof the applicable Registrable Securities owned by a Holder, furnish to eachHolder such number of copies of the prospectus included in such RegistrationStatement, including a preliminary prospectus, in conformity with therequirements of the Securities Act, and such other documents as such Holder mayreasonably request in order to facilitate the disposition of such Holder’sRegistrable Securities;

 

(c)                                  use commercially reasonable efforts to register or qualify theRegistrable Securities under the securities or “blue sky” laws of such jurisdictionswithin the United States as shall be reasonably requested from time to time bya Holder, and do any and all other acts or things which may reasonably benecessary or advisable to enable such Holder to consummate the public sale orother disposition of the Registrable Securities in such jurisdictions; *provided,* that the Company shall not berequired in connection therewith or as a condition thereto to qualify to dobusiness or to file a general consent to service of process in any suchjurisdiction;

 

(d)                                 notify each Holder immediately after becoming aware of theoccurrence of any event (but shall not, without the prior written consent ofsuch Holder, disclose to such Holder any facts or circumstances constitutingmaterial non-public information) as a result of which the prospectus includedin such Registration Statement, as then in effect, contains an untrue statementof material fact or omits to state a material fact required to be statedtherein or necessary to make the statements therein not misleading in light ofthe circumstances then existing, and as promptly as

 

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practicableprepare and file with the Commission and furnish to each Holder a reasonablenumber of copies of a supplement or an amendment to such prospectus as may benecessary so that such prospectus does not contain an untrue statement ofmaterial fact or omit to state a material fact required to be stated therein ornecessary to make the statements therein not misleading in light of thecircumstances then existing;

 

(e)                                  use commercially reasonable efforts to prevent the issuance of anystop order or other order suspending the effectiveness of such RegistrationStatement and, if such an order is issued, to use commercially reasonable effortsobtain the withdrawal thereof at the earliest possible time and to notify eachHolder in writing of the issuance of such order and the resolution thereof;

 

(f)                                    furnish to each Holder no later than two (2) Business Daysafter the date that such Registration Statement, or any successor registrationstatement, becomes effective, a letter, dated such date, signed by an officerof the Company and addressed to such Holder, confirming such effectiveness; and

 

(g)                                 permit counsel for each Holder to review such Registration Statementand all amendments and supplements thereto, and any comments made by the staffof the Commission concerning such Holder and the Company’s responses thereto,within a reasonable period of time prior to the filing thereof with the Commission(or, in the case of comments made by the staff of the Commission, within areasonable period of time following the receipt thereof by the Company).

 

**4.****                                      OBLIGATIONS OF EACH HOLDER.**

 

In connection with the registration ofRegistrable Securities pursuant to a Registration Statement, each Holder shall:

 

(a)                                  timely furnish to the Company (i) a completed shareholderquestionnaire, in form and substance which is reasonably acceptable to theCompany, and (ii) such information in writing regarding such Holder andthe intended method of disposition of the Registrable Securities held by suchHolder as the Company shall reasonably request in order to effect theregistration thereof;

 

(b)                                 upon receipt of any notice from the Company of the happening of anyevent of the kind described in paragraphs 3(d) or 3(e), immediatelydiscontinue any sale or other disposition of such Registrable Securitiespursuant to such Registration Statement until the filing of an amendment orsupplement as described in paragraph 3(d) or withdrawal of the stop orderreferred to in paragraph 3(e), and use commercially reasonable efforts tomaintain the confidentiality of such notice and its contents;

 

(c)                                  to the extent required by applicable law, deliver a prospectus tothe purchaser of such Registrable Securities;

 

(d)                                 notify the Company when such Holder has sold all of the RegistrableSecurities held by such Holder; and

 

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(e)                                  notify the Company in the event that any information supplied by suchHolder in writing for inclusion in such Registration Statement or relatedprospectus is untrue or omits to state a material fact required to be statedtherein or necessary to make such information not misleading in light of thecircumstances then existing; immediately discontinue any sale or otherdisposition of such Registrable Securities pursuant to such RegistrationStatement until the filing of an amendment or supplement to such prospectus asmay be necessary so that such prospectus does not contain an untrue statementof material fact or omit to state a material fact required to be stated thereinor necessary to make the statements therein not misleading in light of thecircumstances then existing; and use commercially reasonable efforts to assistthe Company as may be appropriate to make such amendment or supplementeffective for such purpose.

 

**5.****                                      INDEMNIFICATION.**

 

In the event that any Registrable Securitiesare included in a Registration Statement under this Agreement:

 

(a)                                  To the extent permitted by law, the Company shall indemnify and holdharmless each Holder, the officers, directors, employees, agents andrepresentatives of such Holder, and each person, if any, who controls suchHolder within the meaning of the Securities Act or the Securities Exchange Actof 1934, as amended (the “Exchange Act”), against any losses, claims,damages, liabilities or reasonable out-of-pocket expenses (whether joint orseveral) (collectively, including reasonable legal expenses or other expensesreasonably incurred in connection with investigating or defending same, “Losses”),insofar as any such Losses arise out of or are based upon: (i) any untruestatement or alleged untrue statement of a material fact contained in suchRegistration Statement under which such Registrable Securities were registered,including any preliminary prospectus or final prospectus contained therein orany amendments or supplements thereto; or (ii) the omission or allegedomission to state therein a material fact required to be stated therein, ornecessary to make the statements therein, in light of the circumstances underwhich they were made, not misleading. Subject to the provisions of paragraph 5(c) below, the Company willreimburse such Holder, and each such officer, director, employee, agent,representative or controlling person, for any reasonable legal expenses orother out-of-pocket expenses as reasonably incurred by any such entity orperson in connection with investigating or defending any Loss; *provided, however*, that the foregoingindemnity shall not apply to amounts paid in settlement of any Loss if suchsettlement is effected without the consent of the Company (which consent shallnot be unreasonably withheld), nor shall the Company be obligated to indemnifyany person for any Loss to the extent that such Loss arises out of or is basedupon: (i) any disclosure or any omission or alleged omission (to state amaterial fact required to be stated therein or necessary to make statementstherein not misleading) that is based upon or in conformity with writteninformation furnished (or not furnished, in the case of an omission) by suchperson expressly for use in such Registration Statement; or (ii) a failureof such person to deliver or cause to be delivered the final prospectus containedin the Registration Statement and made available by the Company, if suchdelivery is required by applicable law.

 

(b)                                 To the extent permitted by law, each Holder who is named in suchRegistration Statement as a selling shareholder, acting severally and notjointly, shall indemnify and hold harmless the Company, the officers,directors, employees, agents and representatives of the Company, and eachperson, if any, who controls the Company within the meaning of the Securities 

 

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Act or theExchange Act, against any Losses to the extent (and only to the extent) thatany such Losses arise out of or are based upon: (i) any disclosure or anyomission or alleged omission (to state a material fact required to be statedtherein or necessary to make statements therein not misleading) that is basedupon or in conformity with written information furnished (or not furnished, inthe case of an omission) by such person expressly for use in such RegistrationStatement; or (ii) a failure of such Holder to deliver or cause to bedelivered the final prospectus contained in the Registration Statement and madeavailable by the Company, if such delivery is required under applicable law.Subject to the provisions of paragraph 5(c) below, such Holder willreimburse any legal or other expenses as reasonably incurred by the Company andany such officer, director, employee, agent, representative, or controllingperson, in connection with investigating or defending any such Loss; *provided, however*, that the foregoingindemnity shall not apply to amounts paid in settlement of any such Loss ifsuch settlement is effected without the consent of such Holder (which consentshall not be unreasonably withheld).

 

(c)                                  Promptly after receipt by an indemnified party under this Section 5(an “Indemnified Party”) of notice of the commencement of any action(including any governmental action), such Indemnified Party will, if a claim inrespect thereof is to be made against any indemnifying party under this Section 5(an “Indemnifying Party”), promptly deliver to the Indemnifying Party awritten notice of the commencement thereof and the Indemnifying Party shallhave the right to participate in and to assume the defense thereof with counselselected by the Indemnifying Party and reasonably acceptable to the IndemnifiedParty; *provided, however*, that anIndemnified Party shall have the right to retain its own counsel, with thereasonably incurred fees and expenses of one such counsel for all IndemnifiedParties to be paid by the Indemnifying Party, if representation of suchIndemnified Party by the counsel retained by the Indemnifying Party would beinappropriate under applicable standards of professional conduct due to actualor potential conflicting interests between such Indemnified Party and any otherparty represented by such counsel in such proceeding.  The failure to deliver written notice to theIndemnifying Party within a reasonable time of the delivery of notice of anysuch action, to the extent prejudicial to its ability to defend such action,shall relieve such Indemnifying Party of any liability to the Indemnified Partyunder this Section 5 with respect to such action, but the omission so todeliver written notice to the Indemnifying Party will not relieve it of anyliability that it may have to any Indemnified Party otherwise than under this Section 5or with respect to any other action unless the Indemnifying Party is materiallyprejudiced as a result of not receiving such notice.

 

(d)                                 In the event that the indemnity provided in paragraph (a) or (b) ofthis Section 5 is unavailable or insufficient to hold harmless anIndemnified Party for any reason, the Company and each Holder agree, severallyand not jointly, to contribute to the aggregate Losses to which the Company orsuch Holder may be subject in such proportion as is appropriate to reflect therelative fault of the Company and such Holder in connection with the statementsor omissions which resulted in such Losses. Relative fault shall be determined by reference to whether any allegeduntrue statement or omission relates to information provided by the Company orby such Holder.  The Company and eachHolder agree that it would not be just and equitable if contribution weredetermined by *pro rata* allocationor any other method of allocation which does not take account of the equitableconsiderations referred to above. Notwithstanding the provisions of this paragraph (d), no person guiltyof fraudulent misrepresentation (within the meaning of Section 11(f) ofthe Securities Act) shall be entitled to contribution from any person who isnot guilty of such fraudulent 

 

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misrepresentation.  For purposes of this Section 5, eachperson who controls a Holder within the meaning of either the Securities Act orthe Exchange Act and each officer, director, employee, agent or representativeof such Holder shall have the same rights to contribution as such Holder, andeach person who controls the Company within the meaning of either theSecurities Act or the Exchange Act and each officer, director, employee, agentor representative of the Company shall have the same rights to contribution asthe Company, subject in each case to the applicable terms and conditions ofthis paragraph (d).

 

(e)                                  The obligations of the Company and each Holder under this Section 5shall survive the conversion of the Notes and exercise of the Warrants in fulland the completion of any offering or sale of Registrable Securities pursuant toa Registration Statement under this Agreement or otherwise.

 

**6.****                                      REPORTS.**

 

With a view to making available to eachHolder the benefits of Rule 144 and any other similar rule orregulation of the Commission that may at any time permit such Holder to sell securitiesof the Company to the public without registration, the Company agrees to:

 

(a)                                  make and keep public information available, as those terms areunderstood and defined in Rule 144;

 

(b)                                 file with the Commission in a timely manner all reports and otherdocuments required of the Company under the Exchange Act; and

 

(c)                                  furnish to such Holder, so long as such Holder owns any RegistrableSecurities, promptly upon written request: (i) a written statement by theCompany, if true, that it has complied with the reporting requirements of Rule 144and the Exchange Act; (ii) to the extent not publicly available throughthe Commission’s EDGAR database, a copy of the most recent annual or quarterlyreport of the Company and such other reports and documents so filed by theCompany with the Commission; and (iii) such other information as may bereasonably requested by such Holder in connection with such Holder’s compliancewith any rule or regulation of the Commission which permits the selling ofany such securities without registration.

 

**7.****                                      MISCELLANEOUS.**

 

(a)                                  Expenses of Registration.  All reasonable expenses, other thanunderwriting discounts and commissions and fees and expenses of counsel andother advisors to each Holder, incurred in connection with the registrations,filings or qualifications described herein, including (without limitation) allregistration, filing and qualification fees, printers’ and accounting fees,shall be borne by the Company.

 

(b)                                 Amendment; Waiver.  Except as expressly provided herein, neitherthis Agreement nor any term hereof may be amended or waived except pursuant toa written instrument executed by the Company and the Holders of at least amajority of the Registrable Securities into which all of the Notes and Warrantsthen outstanding are convertible or exercisable (without regard

 

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to anylimitation on such conversion or exercise). Any amendment or waiver effected inaccordance with this paragraph shall be binding upon each Holder, each futureHolder and the Company.  The failure ofany party to exercise any right or remedy under this Agreement or otherwise, orthe delay by any party in exercising such right or remedy, shall not operate asa waiver thereof.

 

(c)                                  Notices. Any notice, demand or request required or permitted to be given by theCompany or a Holder pursuant to the terms of this Agreement shall be in writingand shall be deemed delivered: (i) when delivered personally or byverifiable facsimile transmission, unless such delivery is made on a day thatis not a Business Day, in which case such delivery will be deemed to be made onthe next succeeding Business Day; (ii) on the next Business Day aftertimely delivery to a reputable overnight courier; and (iii) on theBusiness Day actually received if deposited in the U.S. mail (certified orregistered mail, return receipt requested, postage prepaid), addressed asfollows:

 

*If to the Company*:

 

Tri-S Security Corporation

3700 Mansell Road, Suite 220

Alpharetta, GA 30022

Attn:      ChiefExecutive Officer

Tel:        (770)625-4945

Fax:       (770) 625-4946

 

*with a copy (which shall notconstitute notice) to:*

 

Rogers & Hardin LLP

2700 International Tower

229 Peachtree Street NE

Atlanta, GA 30303

Attn:      StevenE. Fox, Esq.

Tel:        (404)522-4700

Fax:       (404)525-2224

 

and if to aHolder, to such address as shall be designated by such Holder in writing to theCompany.

 

(d)                                 Assignment.  Upon the transfer of any Notes, Warrants orRegistrable Securities by a Holder, the rights of such Holder hereunder withrespect to such securities so transferred shall be assigned automatically tothe transferee thereof, and such transferee shall thereupon be deemed to be a “Holder”for purposes of this Agreement, as long as: (i) the Company is, within areasonable period of time following such transfer, furnished with writtennotice of the name and address of such transferee; (ii) the transfereeagrees in writing with the Company to be bound by all of the provisions hereof;and (iii) such transfer is made in accordance with the applicablerequirements of the Notes, Warrants and all applicable law.

 

(e)                                  Counterparts.  This Agreement may be executed incounterparts, each of which shall be deemed an original, and all of whichtogether shall be deemed one and the same instrument.  This Agreement, once executed by a party, maybe delivered to any other party hereto by facsimile transmission.

 

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(f)                                    Governing Law.  This Agreement shall be governed by andconstrued in accordance with the laws of the State of Georgia applicable tocontracts made and to be performed entirely within the State of Georgia.

 

(g)                                 Holder of Record.  A person is deemed to be a Holder wheneversuch person owns or is deemed to own of record such RegistrableSecurities.  If the Company receivesconflicting instructions, notices or elections from two or more persons withrespect to the same Registrable Securities, the Company shall act upon the basisof instructions, notice or election received from the record owner of suchRegistrable Securities.

 

(h)                                 Entire Agreement. This Agreement and theNotes, Warrants, Subscription Agreements and Memorandum (collectively, the “TransactionDocuments”) constitute the entire agreement among the parties hereto withrespect to the subject matter hereof and thereof.  There are no restrictions, promises,warranties or undertakings, other than those set forth or referred to hereinand therein.  This Agreement and theother Transaction Documents supersede all prior agreements and understandingsamong the parties hereto with respect to the subject matter hereof and thereof.

 

(i)                                     Headings.  The headings in this Agreement are forconvenience of reference only and shall not limit or otherwise affect themeaning hereof.

 

(j)                                     Third Party Beneficiaries.  This Agreement is intended for the benefit ofthe parties hereto and their respective permitted successors and assigns, andis not for the benefit of, nor may any provision hereof be enforced by, anyother person.

 

**[Signature Page toFollow]**

 

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**IN WITNESS WHEREOF**, the undersigned have executed this Registration Rights Agreementas of the date first-above written.

 
| ** ** | **TRI-S  SECURITY CORPORATION** |
|------------|---------------------------------|
| ** ** | ** **                      |
|       |                            |
|       | By:                             |   |   |
|       |                            | Name: Ronald  G. Farrell |
|       |                            | Title: Chief  Executive Officer |
|       |                            |
|       | **INVESTOR:**                   |
|       |                            |
|       |                            |
|       |                            | Investor  Name |
|       |                            |
|       |                            |
|       | By:                             |                                          ,  its                          |
|       |                            |
|       |                            |
|       |                            | By: |   |   |
|       |                            |   | Name: |
|       |                            |   | Title: |
|            |                                 |  |  |  |  |  |

 

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