Exhibit 10.8
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REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT ("Registration Rights Agreement"),
entered into as of January 30,1997, between CRIPPLE CREEK SECURITIES, LLC, with
offices at 40 West 57th Street, 15th Floor, New York, NY 10019 (the "Investor"),
and GRC INTERNATIONAL, Inc., a Delaware corporation with offices at 1900 Gallows
Road, Vienna, Virginia 22182 (the "Company").
WITNESSETH:
WHEREAS, pursuant to a Structured Equity Line Flexible Financing\\SM\\
Agreement, dated as of January 21, 1997 (the "Investor Agreement"), by and
between the Company and the Investor, the Company has agreed to sell and the
Investor has agreed to purchase, from time to time as provided in the Investor
Agreement, shares of the Company's Common Stock, $0.10 par value (the "Shares"
or the "Common Stock") for a maximum aggregate price of $18,000,000;
WHEREAS, pursuant to the terms of, and in partial consideration for, the
Investor's agreement to enter into the Investment Agreement, the Company has
issued to the Investor a warrant dated January 30, 1997, exercisable from time
to time within seven (7) years from the date of issuance (the "Warrant") for the
purchase of an aggregate of 125,000 shares of Common Stock at a price specified
in such Warrant;
WHEREAS, the Company has agreed to issue to the Investor an additional
seven (7) year warrant to purchase up to 75,000 Shares at a price determined
pursuant to the Investment Agreement ("Additional Warrant") upon the occurrence,
if any, of certain circumstances set forth in the Investor Agreement;
WHEREAS, pursuant to the terms of, and in partial consideration for the
Investor's commitment to enter into the Investor Agreement, the Company has
agreed to provide the Investor with certain registration rights with respect to
the Shares as set forth in this Registration Rights Agreement;
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in the Investor Agreement and
this Registration Rights Agreement and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
intending to be legally bound hereby, the Company and the Investor agree as
follows:
1. Certain Definitions. Capitalized terms used in this Registration Rights
Agreement and not otherwise defined herein shall have the same meaning ascribed
to them in the Investor Agreement. The following terms shall have the following
respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Investor" shall include the Investor and any permitted assignee or
transferee of the rights under the Investor Agreement to whom the registration
rights conferred by this Registration Rights Agreement have been transferred in
compliance with Section 10 of this Registration Rights Agreement.
The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registration Expenses" shall mean all expenses to be incurred by the
Company in connection with Investor's exercise of its registration rights under
this Registration Rights Agreement, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, reasonable fees and
disbursements of counsel to Investor for a "due diligence" examination of the
Company and review of the Warrant Registration Statement and the Additional
Warrant Registration Statement, as applicable, and the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company).
"Registrable Securities" shall mean any Shares or other securities
issued or issuable to the Investor or any holder or transferee upon the exercise
of the Warrant or the Additional Warrant as provided therein, until (i) a
registration statement under the Securities Act covering the offering of such
Shares has been declared effective by the Commission and such Shares have been
disposed of pursuant to such effective registration statement, (ii) such Shares
are sold under circumstances in which all of the applicable conditions of Rule
144 (or any similar provision then in force) under the Securities Act ("Rule
144") are met, (iii) such Shares have been otherwise transferred and the Company
has delivered a new certificate or other evidence of ownership for such
securities not bearing a restrictive legend or (iv) such time as, in the opinion
of counsel to the Company, which counsel shall be acceptable to the Investor in
its sole discretion, such Shares may be sold without any time, volume or manner
limitation pursuant to Rule 144(k) (or any similar provision then in effect)
under the Securities Act.
"Registration Statement", "Warrant Registration Statement" and
"Additional Warrant Registration Statement" shall have the meaning set forth in
Section 2(a) herein.
"Regulation D" shall mean Regulation D as promulgated pursuant to the
Securities Act, and as subsequently amended.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for Investor not included with "Registration Expenses".
2. Registration Requirements. The Company shall use its diligent best
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efforts to effect the registration of the Registrable Securities contemplated by
the Warrant, and if applicable, the Additional Warrant (including, without
limitation, the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other
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state securities laws and appropriate compliance with applicable regulations
issued under the Securities Act) as would permit or facilitate the sale or
distribution of all the Registrable Securities in the manner (including manner
of sale) and in all states reasonably requested by the Investor for purposes of
maximizing the proceeds realizable by the Investor from such sale or
distribution. Such best efforts by the Company shall include without limitation
the following:
(a) Subject to the terms and conditions of this Registration Rights
Agreement, the Company shall file with the Commission (i) no later than thirty
(30) days from the date of execution of this Registration Rights Agreement, a
registration statement on Form S-3 under the Securities Act for the registration
of the resale by the Investor of the Registrable Securities to be issued upon
exercise of the Warrant (the "Warrant Registration Statement") which Warrant
Registration Statement shall have been declared effective by the Commission no
later than June 2, 1997, and (ii) no later than thirty (30) days from the date
of the issuance of the Additional Warrant, a registration statement on Form S-3
under the Securities Act for the registration of the resale by the Investor of
the Registrable Securities to be issued upon exercise of the Additional Warrant
(the "Additional Warrant Registration Statement") which Additional Warrant
Registration Statement shall have been declared effective by the Commission
within 120 days of the date of issuance of the Additional Warrant. The Warrant
Registration Statement and the Additional Warrant Registration Statement are
each referred to herein as a "Registration Statement". Furthermore, at the time
of each Registration Statement filing, the Company shall file (A) such blue sky
filings as shall have been requested by the Investor; and (B) any required
filings with the National Association of Securities Dealers, Inc. or exchange or
market where the Shares are traded. The Company shall use its best efforts to
have all filings declared effective as promptly as practicable.
(b) (i) If the Company (A) fails to file the Warrant Registration
Statement complying with the requirements of this Registration Rights Agreement
within thirty (30) days from the date hereof or if the Warrant Registration
Statement has not become effective on or before June 2, 1997 or (B) fails to
file the Additional Warrant Registration Statement complying with the
requirements of this Registration Rights Agreement within thirty (30) days of
the issuance of the Additional Warrant or if such Additional Warrant
Registration Statement has not become effective within 120 days of the issuance
of the Additional Warrant, the Investor shall have, in addition to and without
limiting any other rights it may have at law, in equity or under the Investor
Agreement, or this Registration Rights Agreement (including the right to
specific performance), the right to receive, as liquidated damages, the payments
as provided in subparagraph (ii) of this section.
(ii) In the event the Company fails to obtain the effectiveness
of a Registration Statement within the time period set forth in Section 2(a),
the Company shall pay to the Investor an amount equal to $15,000, in cash, for
each thirty (30) day period following the date by which such Registration
Statement was required to have been declared effective (which payment shall be
pro-rata for any period of less than thirty (30) days). In addition to the
foregoing, in the event the Company fails to maintain the effectiveness of a
Registration Statement (or the use of the underlying prospectus) throughout the
period set forth in Section 5(a), other than temporary suspensions as set forth
in Section 5A, the Company shall pay to the Investor an amount equal to $7,500,
in cash, for each thirty (30) day period in which a suspension has occurred
(which payment shall be pro-rata for any period of less than thirty (30) days).
Such liquidated damages amount shall not be payable with respect to suspensions
of the effectiveness of a Registration Statement (or use of the underlying
prospectus) in
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accordance with Section 5A although any such suspensions shall be counted
towards the temporary suspensions allowed by the preceding sentence.
(c) The Company shall enter into such customary agreements and take
all such other reasonable actions in connection therewith in order to expedite
or facilitate the disposition of such Registrable Securities (the Investor may,
at its option, require that any or all of the representations, warranties and
covenants of the Company in such agreements also be made to and for the benefit
of the Investor) and in such connection:
(i) cause to be delivered to the sellers of Registrable
Securities opinions of counsel to the Company, dated the effective date of the
Registration Statement (which counsel, and opinions (in form, scope and
substance), shall be reasonably satisfactory to the appointed representative or
counsel of the Investor), addressed to the Investor covering matters reasonably
requested by the Investor;
(ii) cause to be delivered, immediately prior to the
effectiveness of the Registration Statement, a "comfort" letter from the
Company's independent certified public accountants addressed to the Investor
stating that such accountants are independent public accountants within the
meaning of the Securities Act and the applicable published rules and regulations
thereunder, and otherwise in customary form and covering such financial and
accounting matters as are reasonably requested by the Investor;
(iii) the Company shall deliver such documents and certificates
as may be reasonably requested by the Investor to evidence compliance with the
Investor's request, if any, that any or all representations, warranties and
covenants of the Company made in the agreements referred to in the introductory
paragraph of (c) above were also made to the benefit of the Investor and with
any other agreement entered into by the Company;
(d) The Company shall make available for inspection by a
representative or representatives of the Investor, any attorney or accountant
retained by such Investor, all financial and other records customary for such
purposes, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all information
reasonably requested by any such representative, attorney or accountant in
connection with such Registration Statement. The Investor will agree to keep
all non-public information supplied to it confidential until such information is
included in the Registration Statement.
3. Expenses of Registration. All Registration Expenses incurred in
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connection with any registration, qualification or compliance with registration
pursuant to this Registration Rights Agreement shall be borne by the Company,
and all Selling Expenses shall be borne by the Investor.
4. Registration on Form S-3. The Company shall use its best efforts to
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remain eligible for registration on Form S-3 or any comparable or successor form
or forms, or in the event that the Company is ineligible to use such form, such
form as the Company is eligible to use under the Securities Act. The foregoing
is not intended to require the Company to pay dividends in order to use Form S-
3.
5. Registration Procedures. In the case of each registration effected by
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the Company pursuant to this Registration Rights Agreement, the Company will
keep the Investor
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advised in writing as to the initiation of each registration and as to the
completion thereof. At its expense, the Company will use its best efforts to:
(a) Keep such registration effective for the period ending eighty-four
(84) months, as extended pursuant to Section 5A hereof, after the date of
issuance (in the case of the Warrant Registration Statement), and eighty-four
(84) months, as extended pursuant to Section 5A hereof, after the date of
issuance of the Additional Warrant (in the case of the Additional Warrant
Registration Statement), or until the Investor has completed the distribution of
the Shares or securities issued or issuable by the Company upon exercise of the
Warrant and the Additional Warrants, whichever first occurs.
(b) Furnish such number of prospectuses and amendments and supplements
thereto, and other documents incident thereto as the Investor from time to time
may reasonably request.
(c) Prepare and file with the Commission such amendments and post-
effective amendments to a Registration Statement as may be necessary to keep
such Registration Statement effective for the applicable period; cause the
related prospectus to be supplemented by any required prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 under the Securities Act;
and comply with the provisions of the Securities Act applicable to it with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended methods
of disposition by the sellers thereof set forth in such Registration Statement
or supplement to such prospectus;
(d) Notify the Investor and its counsel (as designated in writing by
the Investor) promptly, and confirm such notice (a "Notice") in writing, (i)
when a prospectus or any prospectus supplement or post-effective amendment has
been filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
Commission for amendments or supplements to a Registration Statement or related
prospectus or for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose, (iv) if at any
time the representations and warranties of the Company contained in agreements
contemplated by Section 2(c) cease to be true and correct, (v) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, (vi) of the
happening of any event as a result of which the prospectus included in a
Registration Statement (as then in effect) contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein (in the case of the prospectus or
any preliminary prospectus, in light of the circumstances under which they were
made) not misleading and (vii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate or
that there exist circumstances not yet disclosed to the public which make
further sales under such Registration Statement inadvisable pending such
disclosure and post-effective amendment;
(e) Upon the occurrence of any event contemplated by Section 5(d)(ii)-
(vii) and immediately upon the expiration of any Blocking Period (as defined in
Section 5A), prepare, if the occurrence of such event or period requires such
preparation, a supplement or post-effective amendment to a Registration
Statement or related prospectus or any document
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incorporated therein by reference or file any other document so that, as
thereafter delivered to the purchasers of the Registrable Securities being sold
thereunder, such prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary, in order to make the
statements, in light of the circumstances under which they were made, not
misleading;
(f) Make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification of any of the Registrable Securities for sale in
any jurisdiction, at the earliest possible moment;
(g) Insure that all Registrable Securities subject to a Registration
Statement shall at all times be registered or qualified for offer and sale under
the securities or blue sky laws of such jurisdictions as the Investor reasonably
requests in writing; use its best efforts to keep each such registration or
qualification effective, including through new filings or amendments or
renewals, during the period a Registration Statement is required to be kept
effective and do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Registrable Securities
covered by the applicable Registration Statement; provided. however. that the
Company will not be required to qualify to do business or take any action that
would subject it to taxation or general service of process in any jurisdiction
where it is not then so qualified or subject;
(h) Use its best efforts to cause the Registrable Securities covered
by a Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the seller or
sellers thereof to consummate the disposition of such Registrable Securities in
accordance with the chosen method or methods of distribution;
(i) Cause all Registrable Securities included in a Registration
Statement to be listed, by the date of first sale of Registrable Securities
pursuant to such Registration Statement, on the principal securities exchange or
automated interdealer system on which the same type of securities of the Company
are then listed or traded;
5A. Suspensions of Effectiveness. The Company may suspend dispositions
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under the Registration Statement and notify the Investor that it may not sell
the Registrable Securities pursuant to any Registration Statement or prospectus
(a "Blocking Notice") if the Company's management determines in its reasonable
good faith judgment that the Company's obligation to ensure that such
Registration Statement and prospectus are current and complete would require the
Company to take actions that might reasonably be expected to have a materially
adverse detrimental effect on the Company and its stockholders; provided that
such suspension pursuant to a Blocking Notice or the Notice described below or
as a result of the circumstances described in 5(d)(ii)-(vii) may not exceed
ninety (90) days (whether or not consecutive) in any twelve (12) month period.
The Investor agrees by acquisition of the Registrable Securities that, upon
receipt of a Blocking Notice or "Notice" from the Company of the existence of
any fact of the kind described in the following sentence, the Investor shall not
dispose of, sell or offer for sale the Registrable Securities pursuant to the
Registration Statement until the Investor receives (i) copies of the
supplemented or amended prospectus, or until counsel for the Company shall have
determined that such disclosure is not required due to subsequent events, (ii)
notice in writing (the "Advice") from the Company that the use of the prospectus
may be resumed and (iii) copies of any additional or supplemental filings that
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are incorporated by reference in the prospectus. Pursuant to the immediately
preceding sentence, the Company may provide such Notice to the Investor upon the
determination by the Company of the existence of any fact or the occurrence of
any event that makes any statement of a material fact made in a Registration
Statement, the prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue in any material respect, or that
requires the making of any additions to or changes in a Registration Statement
or the prospectus, in order to make the statements therein not misleading in any
material respect. If so directed by the Company in connection with any such
notice, each Investor will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in the Investor's possession, of
the prospectus covering such Registrable Securities that was current immediately
prior to the time of receipt of such notice. In the event the Company shall give
any such Blocking Notice or Notice, the time regarding the effectiveness of such
Registration Statement set forth in Section 5(a) shall be extended by one and
one-half (1-1/2) times the number of days during the period from and including
the date of the giving of such Blocking Notice or Notice to and including the
date when the Investor shall have received the copies of the supplemented or
amended prospectus, the Advice and any additional or supplemental filings that
are incorporated by reference in the prospectus. Delivery of a Blocking Notice
or Notice and the related suspension of any Registration Statement shall not
constitute a default under this Registration Rights Agreement and shall not
create any obligation to pay liquidated damages under Section 2 hereof.
However, if the Investor's ability to sell under a Registration Statement is
suspended for more than ninety (90) days period described above, the Investor
may elect, in its sole and absolute discretion, to terminate the Investor
Agreement pursuant to Section 10.4 in the Investor Agreement.
6. Indemnification.
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(a) Company Indemnity. The Company will indemnify the Investor, each of its
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officers, directors and partners, and each person controlling the Investor,
within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder with respect to which registration, qualification or
compliance has been effected pursuant to this Registration Rights Agreement,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering circular or
other document (including any related registration statement, notification or
the like) incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein 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 state
securities law or in either case, any rule or regulation thereunder applicable
to the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance, and will
reimburse the Investor, each of its officers, directors and partners, and each
person controlling the Investor, for any legal and any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission (or alleged untrue
statement or omission) that is made in reliance upon and in conformity with
written information furnished to the Company by the Investor and stated to be
specifically for therein. In addition to any other information furnished in
writing to the Company by the Investor, the information in a Registration
Statement concerning the Investor under the captions "Selling Shareholders" (or
any similarly captioned section containing the information required pursuant to
Item. 507 of Regulation S-K promulgated pursuant to the Securities Act)
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and "Plan of Distribution" (or any similarly captioned section containing
information required pursuant to Item 508 of Regulation S-K) shall be deemed
information furnished in writing to the Company by the Investor to the extent it
conforms to information actually supplied in writing by the Investor. The
indemnity agreement contained in this Section 6(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent will
not be unreasonably withheld).
(b) Investor Indemnity. The Investor will, if Registrable Securities
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held by it are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors, officers, partners and each person who controls the Company
within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder, each other Investor (if any), and each of their
officers, directors, and partners, and each person controlling such other
Investor against all claims, losses, liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any such registration statement, prospectus,
offering circular or other document, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statement therein not misleading, and will reimburse the Company and its
directors, officers and partners or control persons for any legal or any other
expenses reasonably incurred in connection with investigating and defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by the Investor and
stated to be specifically for use therein, and provided that no Investor shall
be liable under this indemnity for an amount in excess of the proceeds received
by the Investor from the sale of the Registrable Securities pursuant to such
Registration Statement. In addition to any other information furnished in
writing to the Company by the Investor, the information in a Registration
Statement concerning the Investor under the captions "Selling Shareholders" (or
any similarly captioned section containing the information required pursuant to
Item 507 of Regulation S-K promulgated pursuant to the Securities Act) and "Plan
of Distribution" (or any similarly captioned section containing information
required pursuant to Item 508 of Regulation S-K) shall be deemed information
furnished in writing to the Company by the Investor to the extent it conforms to
information actually supplied in writing by the Investor. The indemnity
agreement contained in this Section 6(b) shall not apply to amounts paid in
settlement of any such claims, losses, damages or liabilities if such settlement
is effected without the consent of the Investor (which consent shall not be
unreasonably withheld).
(c) Procedure. Each party entitled to indemnification under this
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Article (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim in any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at such party's expense, and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Section
except to the extent that the Indemnifying Party is materially and adversely
affected by such
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failure to provide notice. The Indemnifying Party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for such Indemnified Party, provided, however, that if
separate firm(s) of attorneys are required due to a conflict of interest, then
the Indemnifying Party shall be liable for the reasonable fees and expenses of
each such separate firm. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.
7. Contribution. If the indemnification provided for in Section 6 herein
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is unavailable to the Indemnified Parties in respect of any losses, claims,
damages or liabilities referred to herein (other than by reason of the
exceptions provided therein), 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 losses, claims, damages or
liabilities (i) as between the Company and the Investor in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Investor from the offering of the Registrable Securities, or if such allocation
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and of the Investor, on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations and (ii) as
between the Company on the one hand and the Investor on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and of
the Investor in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Investor, on the other shall be deemed to be in the same proportion as the
proceeds from the offering received by the Company from the initial sale of the
Registrable Securities by the Company to the Investor pursuant to this
Registration Rights Agreement bear to the proceeds received by the Investor from
the sale of Registrable Securities pursuant to a Registration Statement. The
relative fault of the Company on the one hand and of the Investor on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or by the
Investor.
In no event shall the obligation of any Indemnifying Party to contribute
under this Section 7 exceed the amount that such Indemnifying Party would have
been obligated to pay by way of indemnification if the indemnification provided
for under Section 6(a) or 6(b) hereof had been available under the
circumstances.
The Company and the Investor agree that it would not be just and equitable
if contribution pursuant to this Section 7 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
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the immediately preceding paragraphs. The amount paid or payable by an
Indemnified Party as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraphs shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section, no Investor shall be required to contribute any amount in excess of the
amount by which the total price at which the shares of Common Stock offered by
the Investor and distributed to the public, or offered to the public, exceeds
the amount of any damages that the Investor has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. 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.
8. Survival. The indemnity and contribution agreements contained in
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Sections 6 and 7 and the representations and warranties of the Company referred
to in Section 2(e)(i) shall remain operative and in full force and effect
regardless of (i) any termination of the Investor Agreement, (ii) any
investigation made by or on behalf of any Indemnified Party or by or on behalf
of the Company and (iii) the consummation of the sale or successive resales of
the Registrable Securities.
9. Information by Investor. The Investor shall promptly furnish to the
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Company such information regarding the Investor and the distribution proposed by
the Investor as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Registration Rights Agreement. All information
provided to the Company by the Investor shall be accurate and complete in all
material respects and the Investor shall promptly notify the Company if any such
information becomes incorrect of incomplete. If the Investor does not timely
provide all such reasonably requested information the Investor shall not be
entitled to the liquidated damages contemplated by Section 2(b)(ii) to the
extent that such delay in a Registration Statement becoming effective is caused
by such failure to timely provide information unless the Investor shall be able
to demonstrate to the Company's satisfaction that such failure to timely provide
did not proportionately contribute to the event giving rise to the indemnity
obligation.
10. Transfer or Assignment of Registration Rights. Neither this
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Registration Rights Agreement nor any rights of the Investor or the Company
hereunder may be assigned by either party to any other person. Notwithstanding
the foregoing, the Investor's rights and obligations under this Registration
Rights Agreement may be assigned at any time, in whole or in part, to (x) any
affiliate of the Investor without any prior written consent of the Company or
(y) to any other person or entity, upon the prior written consent of the
Company, which consent shall not to be unreasonably withheld (a "Permitted
Transferee"), and the rights and obligation of the Investor under this
Registration Rights Agreement shall inure to the benefit of, and be enforceable
by and against, any such Permitted Transferee.
11. Miscellaneous.
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(a) Entire Agreement. This Registration Rights Agreement contains the
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entire understanding and agreement of the parties, and may not be modified or
terminated except by a written agreement signed by both parties.
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(b) Notices. Any notice or other communication given or permitted
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under this Registration Rights Agreement shall be in writing and shall be deemed
to have been duly given if personally delivered or sent by registered or
certified mail, return receipt requested, postage prepaid or by air courier,
(a) if to Investor, at its address hereinabove set forth, (b) if to the Company,
to GRC International, Inc., at its address hereinabove set forth, and (c) if to
a permitted transferee or assignee, at the address thereof furnished by like
notice to the Company, or (d) to any such addresses at such other address or
addresses as shall be so furnished to the other parties by like notice.
(c) Gender of Terms. All terms used herein shall be deemed to include
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the feminine and the neuter, and the singular and the plural, as the context
requires.
(d) Governing Law; Consent of Jurisdiction; Waiver of Jury Trial.
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This Registration Rights Agreement and the validity and performance of the terms
hereof shall be governed by and construed in accordance with the laws of the
State of New York, except to the extent that the law of the State of Delaware
regulates the Company's issuance of securities. The parties hereto hereby agree
that all actions or proceedings arising directly or indirectly from or in
connection with this Registration Rights Agreement shall be litigated only in
the Supreme Court of the State of New York or the United States District Court
for the Southern District of New York located in New York County, New York. To
the extent permitted by applicable law, the parties hereto consent to the
jurisdiction and venue of the foregoing courts and consent that any process or
notice of motion or other application to either of said courts or a judge
thereof may be served inside or outside the State of New York or the Southern
District of New York by registered mail, return receipt requested, directed to
the such party at its address set forth in this Registration Rights Agreement
(and service so made shall be deemed complete five (5) days after the same has
been posted as aforesaid) or by personal service or in such other manner as may
be permissible under the rules of said courts. The parties hereto hereby waive
any right to a jury trial in connection with any litigation pursuant to this
Registration Rights Agreement.
(e) Titles. The titles used in this Registration Rights Agreement are
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used for convenience only and are not to be considered in construing or
interpreting this Registration Rights Agreement.
(f) Rule 144. The Company covenants that it will file all reports
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required to be filed by it under the Securities Act and the Exchange Act and
that it will take such further action as holders of Registrable Securities may
reasonably request, all to the extent required from time to time to enable the
Investor to sell Registrable Securities without registration under the Act
within the limitation of the exemptions provided by (a) Rule 144, as such Rule
may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the SEC. If at any time the Company is not required to
file such reports, it will, upon the request of the Investor, make publicly
available other information so long as necessary to permit sales pursuant to
Rule 144. Upon the request of the Investor, the Company will deliver to the
Investor a written statement as to whether it has complied with such
requirements.
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IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed as of the date first above written.
CRIPPLE CREEK SECURITIES, LLC GRC INTERNATIONAL, INC.
a Delaware Corporation
By: By:
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Name: Name:
Title: Title:
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