Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
as of April __, 2002 by and among Nesco Industries, Inc., a Nevada corporation
(the "Company") and the investors identified on the signature page hereto (the
"Series A Holders" or, the "Holders").
Any capitalized term used but not defined herein has the
meaning set forth in the Subscription Agreement, dated as of the date hereof, by
and among the Company and the Series A Holders (the "Purchase Agreement").
RECITALS
WHEREAS, on the date hereof, the Company is issuing and
selling to the Series A Holders (the "Offering") shares of the Series A
Convertible Preferred Stock, par value $.001 per share (the "Series A Stock"),
of the Company;
WHEREAS, on the date hereof, the Company is issuing (i) Bridge
Note Warrants, (ii) Placement Agent Warrants and (iii) Investment Banking
Warrants warrants (collectively, the "Warrants") to KSH Investment Group, Inc.,
the placement agent for the sale of the Series A Stock (the "Placement Agent"),
to purchase shares of the Company's Common Stock, par value $.001 per share (the
"Common Stock"), as more fully described in the Private Placement Memorandum for
the Series A Stock;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. For purposes of this Agreement:
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(a) "Common Stock" means shares of common stock, $.001
par value, of the Company.
(b) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(c) "Form S-3" means such form under the Securities Act as in
effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
(d) "Holder" has the meaning set forth in the Recitals hereto,
and means any Person owning or having the right to acquire Registrable
Securities, or any assignee thereof in accordance with Section 11 hereof.
(e) "Person" means any individual, partnership, limited
liability company, joint venture, corporation, association, trust or any other
entity or organization.
(f) "Preferred Stock" means the Series A Stock of the Company.
(g) "Register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document.
(h) "Registrable Securities" means (1) any Common Stock
issuable or issued upon conversion of the Preferred Stock, (2) any Common Stock
issuable or issued upon exercise of the Warrants and (3) any Common Stock issued
as (or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, or upon conversion of, such Preferred
Stock or Common Stock or such Warrants, rights or securities; provided, however,
that shares of Common Stock that are Registrable Securities shall cease to be
Registrable Securities upon any sale pursuant to an effective registration
statement or Rule 144 under the Securities Act.
(i) "SEC" means the Securities and Exchange Commission.
(j) "Securities Act" means the Securities Act of 1933, as
amended.
(k) "Series A Stock" means the Series A Convertible Preferred
Stock, par value $.001 per share, of the Company.
(l) "Violation" means any of the following statements,
omissions or violations: (i) any untrue statement or alleged untrue statement of
a material fact contained in a registration statement filed under or referred to
in this Agreement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto or any documents
filed under state securities or "blue sky" laws in connection therewith, (ii)
the 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
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law arising
from, relating to or in connection with the offer and sale of Registrable
Securities pursuant to this Agreement.
(m) "Warrants" has the meaning set forth in the Recitals
hereto.
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2. S-3 Registration.
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(a) The Company will use commercially reasonable efforts to
file with the SEC within sixty (60) days of the final Closing of the sale of the
Series A Stock, and thereafter use its best efforts to have declared effective,
a registration statement on Form S-3 (or such other form as applicable), or if
Form S-3 is not available, Form SB-2, registering the resale of the Common Stock
issuable upon conversion of the Series A Stock as well as the Common Stock
issuable upon conversion of the Bridge Note Warrants, Placement Agent Warrants
and Investment Banking Warrants; provided, however, that such Registration
Statement shall be declared effective within 180 days after the initial filing
of the Registration Statement.
(b) If the Company fails to file a registration statement with
the SEC within sixty (60) days of the final Closing, the Company will issue to
the Holders, on a pro rata basis, additional shares of Series A Stock equal, in
the aggregate, to 5% of the total number of Series A Stock sold by the Company
in the Offering.
3. Piggyback Registration.
(a) If (i) a Registration Statement is not already declared
effective by the SEC in accordance with the terms of Section 2 (a) above and
(ii) the Company proposes to register (but without any obligation to do so)
(including for this purpose a registration effected by the Company for
shareholders other than the Holders) any of its stock or other securities under
the Securities Act in connection with the public offering of such securities
solely for cash (other than a registration on Form S-8 (or similar or successor
form) relating solely to the sale of securities to participants pursuant to a
Company stock plan or to other compensatory arrangements to the extent
includable on Form S-8 (or similar or successor form), or a registration on Form
S-4 (or similar or successor form)), the Company shall, at such time, promptly
give each Holder written notice of such registration. Upon the written request
of each Holder given within twenty (20) days after giving such notice by the
Company in accordance with Section 18, the Company shall, subject to the
provisions of Section 8, use its best efforts to cause to be registered under
the Securities Act all of the Registrable Securities that each such Holder has
requested to be registered. The Company shall have no obligation under this
Section 3 to make any offering of its securities, or to complete an offering of
its securities that it proposes to make.
(b) In connection with any offering initiated by the Company
involving an underwriting of shares being issued by the Company, the Company
shall not be required under Section 3(a) to include any Holder's securities in
such underwriting unless such Holder accepts the terms of the underwriting as
agreed upon between the Company and the underwriters selected by it, and then
only in such quantity as will not, in the opinion of the underwriters, exceed
the largest number of securities requested to be included in such offering which
can be sold without having an adverse effect on such offering by the Company;
provided, however, that no Holder participating in such underwriting shall be
required to make any representations, warranties or indemnities except as they
relate to such Holder's ownership of shares and authority to enter into the
underwriting agreement and to such Holder's intended method of distribution, and
the liability of such Holder shall be limited to an amount equal to the net
proceeds from the offering received by such Holder. If the total number of
securities, including Registrable Securities, requested by shareholders to be
included in such offering exceeds the largest number of securities that the
underwriters reasonably believe can be sold without having an adverse effect on
such offering, then the Company shall be required to include in the offering
only that number of such securities, including Registrable Securities, which the
underwriters believe will not have an adverse effect on such offering, and the
number of shares that may be included in the underwriting shall be allocated as
follows: (i) first, that number of shares sought to be registered by the
Company, (ii) second, among all Holders of Registrable Securities that have
elected to participate in such underwritten offering, in proportion (as nearly
as practicable) to the amount of Registrable Securities owned by such Holders
and (iii) thereafter, to the extent additional securities may be included in
such offering, to other selling shareholders, if any, pro rata according to the
total number of securities entitled to be included therein owned by each such
other selling shareholder or in such other proportions as shall mutually be
agreed to by such other selling shareholders.
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4. Obligations of the Company. Whenever required under this
Agreement to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and keep such registration
statement effective for one hundred eighty (180) days or until the Holders have
completed the distribution referred to in such registration statement, whichever
occurs first (but in any event for at least any period required under the
Securities Act); provided that before filing such registration statement or any
amendments thereto, the Company will furnish to the Holders copies of all such
documents proposed to be filed.
(b) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and keep such registration
statement effective for one hundred eighty (180) days or until the Holders have
completed the distribution referred to in such registration statement, whichever
occurs first (but in any event for at least any period required under the
Securities Act); provided that before filing such registration statement or any
amendments thereto, the Company will furnish to the Holders copies of all such
documents proposed to be filed.
(c) Furnish to the Holders such number of copies of such
registration statement and of each amendment and supplement thereto (in each
case including all exhibits), such number of copies of the prospectus contained
in such registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities Act, and
such other documents as Holders may reasonably request in order to facilitate
the disposition of Registrable Securities owned by them.
(d) Use its reasonable efforts to register and qualify the
securities covered by such registration statement for offer and sale under such
other securities or "blue sky" laws of such states or jurisdictions as shall be
reasonably requested by the Holders, provided that the Company shall not be
required in connection therewith or as a condition thereto (i) to qualify to do
business in any state or jurisdiction where it would not otherwise be required
to qualify but for the requirements of this clause (d), or (ii) to file a
general consent to service of process in any such state or jurisdiction.
(e) Use diligent efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of the
Company's business or operations to enable the seller or sellers thereof to
consummate the disposition of such Registrable Securities.
(f) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering.
(g) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
of which it has knowledge as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing.
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(h) Notify each Holder of Registrable Securities covered by
such registration statement and such Holder's underwriters, if any, and confirm
such advice in writing: (i) when the registration statement has become
effective, (ii) when any post-effective amendment to the registration statement
becomes effective and (iii) of any request by the SEC for any amendment or
supplement to the registration statement or prospectus or for additional
information.
(i) Notify each Holder of Registrable Securities if at any
time the SEC should institute or threaten to institute any proceedings for the
purpose of issuing, or should issue, a stop order suspending the effectiveness
of the Registration Statement. Upon the occurrence of any of the events
mentioned in the preceding sentence, the Company will use its best efforts to
prevent the issuance of any such stop order or to obtain the withdrawal thereof
as soon as possible. The Company will advise each Holder of Registrable
Securities promptly of any order or communication of any public board or body
addressed to the Company suspending or threatening to suspend the qualification
of any Registrable Securities for sale in any jurisdiction.
(j) Furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Agreement, (i) on the
date that such Registrable Securities are delivered to the underwriters for sale
in connection with a registration pursuant to this Agreement, if such securities
are being sold through underwriters, an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) on the date that the
registration statement with respect to such securities becomes effective, a
"comfort" letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters and to the Holders requesting
registration of Registrable Securities and a reaffirmation of such letter on the
date that such Registrable Securities are delivered to the underwriters for
sale.
(k) As soon as practicable after the effective date of the
registration statement, and in any event within sixteen (16) months thereafter,
have "made generally available to its security holders" (within the meaning of
Rule 158 under the Securities Act) an earning statement (which need not be
audited) covering a period of at least twelve (12) months beginning after the
effective date of the registration statement and otherwise complying with
Section 11(a) of the Securities Act.
5. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, the intended method of disposition of such securities and
any other information as reasonably required by the Company in order to comply
with United States securities laws as shall be required to effect the
registration of such Holder's Registrable Securities.
6. Expenses of Registration. All expenses incurred in connection
with all registrations, filings or qualifications, including without limitation
all registration, filing and qualification fees, printers' and accounting fees,
fees and disbursements of counsel for the Company, and the reasonable fees and
disbursements of one counsel (selected by a majority of the Holders) for the
selling Holders shall be borne by the Company, but excluding underwriting
discounts and commissions relating to the Registrable Securities.
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7. Expenses of Company Registration. The Company shall bear and
pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 3 for each Holder, including without limitation all
registration, filing and qualification fees, printers' and accounting fees
relating or apportionable thereto and the fees and disbursements of one counsel
for the selling Holders (selected by the Holders of a majority of the
Registrable Securities being registered), but excluding underwriting discounts
and commissions relating to Registrable Securities.
8. Indemnification.
(a) The Company will indemnify and hold harmless each Holder,
its heirs, personal representatives and assigns, each of such Holder's partners,
each of such Holder's, and each of such Holder's partners', officers, directors,
partners, members, employees and affiliates, any underwriter (as defined in the
Securities Act) for such Holder and each Person, if any, who controls such
Holder or underwriter within the meaning of the Securities Act or the Exchange
Act against any losses, claims, damages or liabilities (joint or several) to
which they may become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon a
Violation; and the Company will pay to each such indemnified party, as incurred,
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this Section 8(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 shall not be unreasonably withheld), nor shall the
Company be liable in any such case to a particular indemnified party for any
such loss, claim, damage, liability or action to the extent that it arises out
of or is based upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection with such
registration by such indemnified party.
(b) Each selling Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who has signed the
registration statement, each Person, if any, who controls the Company within the
meaning of the Securities Act, any underwriter, any other Holder selling
securities in such registration statement and any controlling Person of any such
underwriter or other Holder, against any losses, claims, damages or liabilities
(joint or several) to which any of the foregoing Persons may become subject,
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder expressly for
use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any Person intended
to be indemnified pursuant to this Section 8(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this Section 8(b)
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
Holder, which consent shall not be unreasonably withheld; and provided further,
that, in no event shall the liability of any Holder under this Section 8(b)
exceed the net proceeds from the offering received by such Holder.
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(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 8, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties, acting reasonably; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the fees
and expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the indemnified party under
this Section 8 except if, and only to the extent that, the indemnifying party is
actually prejudiced thereby; and such failure to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 8. An indemnifying party may
settle any action or claim under this Section 8 at any time without the consent
of the indemnified party so long as such settlement involves no cost or
liability to the indemnified party and includes an unconditional release of the
indemnified party from all liability with respect to such claim or action.
(d) The obligations of the Company and Holders under this
Section 8 shall survive the completion of any offering of Registrable Securities
in a registration statement under this Agreement, and otherwise.
(e) Any indemnity agreements contained herein shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of any investigation made or
omitted by or on behalf of any indemnified party. In no event shall the
liability of any Holder under this Agreement exceed the net proceeds from the
offering received by such Holder.
(f) If a court of competent jurisdiction holds that the
foregoing indemnity is unavailable, then the indemnifying party shall contribute
to the amount paid or payable by the indemnified party as a result of such
losses, claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
on the one hand and the indemnified party on the other (taking into
consideration, among other things, the fact that the provision of the
registration rights and indemnification hereunder is a material inducement to
the Series A Holders to purchase Registrable Securities pursuant to the Purchase
Agreement) or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, in such proportion as is appropriate to
reflect not only the relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other (taking into consideration,
among other things, the fact that the provision of the registration rights and
indemnification hereunder is a material inducement to the Series A Holders to
purchase Registrable Securities pursuant to the Purchase Agreement) but also the
relative fault of the indemnifying party and the indemnified party as well as
any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by or on behalf of the
indemnifying party or the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or 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. Notwithstanding anything to the contrary in this Section 8,
no Holder shall be required, pursuant to this Section 8, to contribute any
amount in excess of the net proceeds received by such indemnifying party from
the sale of securities in the offering to which the losses, claims, damages,
liabilities or expenses of the indemnified party relate.
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9. Reports Under the Exchange Act. With a view to making
available to the Holders the benefits of Rule 144 under the Securities Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration or pursuant to
a registration on Form S-3, the Company agrees at all times after 90 days after
any registration statement covering a public offering of securities of the
Company under the Securities Act shall have become effective, to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;
(b) use its best efforts (without unreasonable expense) to
enable the Holders to utilize Form S-3 for the sale of their Registrable
Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144 under
the Securities Act (at any time after the effective date of the first
registration statement filed by the Company) and the Securities Act and Exchange
Act (at any time after it has become subject to such reporting requirements) or
that it qualifies as a registrant whose securities may be resold pursuant to
Form S-3 (at any time it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
10. Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Agreement may be
assigned in whole or in part by a Holder to one or more of its affiliates or to
one or more transferees or assignees of the Registrable Securities owned by such
Holder, provided that (in each case) such transferee or assignee delivers to the
Company a written instrument by which such transferee or assignee agrees to be
bound by the obligations imposed on Holders under this Agreement to the same
extent as if such transferee or assignee was a party hereto. Except as
specifically permitted in the preceding sentence, neither this Agreement nor any
Holder's rights or privileges under this Agreement can be assigned or
transferred in whole or in part without the prior written consent of the other
parties.
11. No Other Registration Rights; Limitations on Subsequent
Registration Rights. The Company represents and warrants to each Holder that,
upon the execution of this Agreement by all of the parties hereto, no
"registration rights" relating to securities of the Company and granted by the
Company will exist on the date hereof other than pursuant to this Agreement.
From and after the date of this Agreement, the Company shall not, without the
prior written consent of Holders holding a majority of the Registrable
Securities then outstanding, enter into any agreement with any holder or
prospective holder of any securities of the Company which would allow such
holder or prospective holder to include such securities in any registration
filed under this Agreement, unless under the terms of such agreement, such
holder or prospective holder may include such securities in any such
registration only to the extent that the inclusion of such holder's securities
will not reduce the amount of the Registrable Securities of any Holder which is
included therein.
12. "Market Stand-Off" Agreement. Each Holder hereby agrees that
(a) during the period of one hundred eighty (180) days following the effective
date of a registration statement of the Company filed under the Securities Act
in connection with an initial public offering of the Company's securities, it
shall not, if requested by the Company and such underwriter, sell or otherwise
transfer or dispose of (other than to donees, affiliates or partners who agree
to be similarly bound) any Common Stock or any securities of the Company
convertible into Common Stock held by it except Common Stock included in such
registration and (b) in connection with an underwritten offering of the
Company's securities that occurs after an initial public offering of the
Company's securities, it shall comply with any restrictions on the sale,
transfer or disposition of (other than to donees, affiliates or partners who
agree to be similarly bound) any Common Stock or any securities of the Company
convertible into Common Stock held by it except Common Stock included in such
registration as may be requested by the underwriter of such offering. No Holder
shall be bound by this Section 12 unless each officer, director and other
shareholder of the Company holding in excess of 1% of the then outstanding
common share equivalents of the Company shall have complied with this Section 12
or otherwise agreed to be bound by a substantially similar market stand-off or
lock-up agreement.
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13. Amendment; Waiver. Any provision of this Agreement may be
amended or waived only with the written consent of (a) the Company and (b) the
Holders of a majority of the Registrable Securities (on a Common Stock
Equivalent basis) then held by the Holders. Any amendment or waiver effected in
accordance with this Section 13 shall be binding upon each Holder of Registrable
Securities at the time outstanding, each future Holder of all such securities,
and the Company. Anything contained in this Agreement to the contrary
notwithstanding, upon the sale of any additional Series A Shares to an
additional investor, this Agreement shall be amended, without any action on the
part of the parties hereto, upon execution by such Additional Investor of a
counterpart hereof, to include such Additional Investor as a Series A Holder for
all purposes hereof.
14. Changes in Registrable Securities. If, and as often as, there
are any changes in the Registrable Securities by way of stock split, stock
dividend, combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions of this Agreement, as may be
required, so that the rights and privileges granted hereby shall continue with
respect to the Registrable Securities as so changed. Without limiting the
generality of the foregoing, the Company will require any successor by merger or
consolidation to assume and agree to be bound by the terms of this Agreement, as
a condition to any such merger or consolidation.
15. Entire Agreement; No Third-Party Beneficiaries. This Agreement
constitutes the full and entire understanding and agreement among the parties
with regard to the subject matter hereof and supercedes the Original Agreement.
Nothing in this Agreement, express or implied, is intended to confer upon any
Person, other than the parties hereto and their respective successors and
assigns, any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided herein.
16. Governing Law.
(a) This Agreement shall be governed by and construed under
the laws of the State of New York without regard to principles of conflicts of
law.
(b) ANY JUDICIAL PROCEEDING INVOLVING ANY DISPUTE, CONTROVERSY
OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE RIGHTS OR INTERESTS
OF THE INVESTORS OR THE BREACH OR ALLEGED BREACH OF THIS AGREEMENT, WHETHER
ARISING DURING OR AT OR AFTER THE TERMINATION OF THIS AGREEMENT (EACH OF THE
FOREGOING DISPUTES, CONTROVERSIES AND CLAIMS HEREINAFTER REFERRED TO AS AN
"AGREEMENT DISPUTE"), SHALL BE BROUGHT ONLY IN A FEDERAL OR STATE COURT LOCATED
IN THE COUNTY, CITY AND STATE OF NEW YORK, AND EACH OF THE PARTIES HERETO (i)
UNCONDITIONALLY ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND ANY
RELATED APPELLATE COURT AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY AND (ii) IRREVOCABLY WAIVES ANY OBJECTION SUCH PARTY MAY NOW
HAVE OR HEREAFTER HAS AS TO THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. EACH OF THE PARTIES HERETO
HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE PARTIES
INVOLVING AN AGREEMENT DISPUTE.
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17. Successors and Assigns. The provisions hereof shall inure to
the benefit of, and be binding upon, the successors, permitted assigns, heirs,
executors and administrators of the parties hereto.
18. Notices. All notices and other communications provided for
herein shall be dated and in writing and shall be deemed to have been duly given
(x) on the date of delivery, if delivered personally or by telecopier, receipt
confirmed, (y) on the following business day, if delivered by a recognized
overnight courier service, or (z) two days after mailing, if sent by registered
or certified mail, return receipt requested, postage prepaid, in each case, to
the party to whom it is directed at the following address (or at such other
address as any party hereto shall hereafter specify by notice in writing to the
other parties hereto):
(i) if to the Company, to it at the following
address:
Nesco Industries, Inc.
22-09 Queens Plaza North
Long Island City, New York 11101
(718) 752-2400
Attn: Lawrence S. Polan, Chief Financial Officer
(ii) if to any Holder, to the address set forth below
such Holder's name on a signature page hereto or at
such other address as may have been furnished in
writing to the Company by any such Holder.
19. Severability. Each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited or invalid under
applicable law, such provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this Agreement.
20. Descriptive Headings. The section and other headings contained
in this Agreement are for convenience of reference only and shall not affect the
meaning or interpretation of this Agreement.
21. Delays or Omissions; Remedies Cumulative. It is agreed that no
delay or omission to exercise any right, power or remedy accruing to the parties
shall impair any such right, power or remedy, nor shall it be construed to be a
waiver of any such breach or default, or any acquiescence therein, or of any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. It is further agreed that any waiver,
permit, consent or approval of any kind or character by a party of any breach or
default under this Agreement, or any waiver by a party of any provisions or
conditions of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in writing and that all remedies, either under
this Agreement, or by law or otherwise afforded to a party, shall be cumulative
and not alternative.
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22. Attorneys' Fees. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
23. Counterparts. This Agreement may be executed in two or more
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement as of the date first above written.
THE COMPANY:
NESCO INDUSTRIES, INC.
By: ___________________________
Name:
Title:
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SERIES A HOLDER
COUNTERPART SIGNATURE PAGE
TO THE
REGISTRATION RIGHTS AGREEMENT,
DATED _______________, 2002,
AMONG NESCO INDUSTRIES, INC. AND THE HOLDERS LISTED ON THE SIGNATURE
PAGES HERETO
Signature:____________________________________
Name of Holder: ____________________
Name/Title of Signatory if
Signed in Representative
Capacity: __________________________
Address, Phone Number and Fax Number
of Holder:
____________________________________
____________________________________
____________________________________
____________________________________
SSN or TIN of Holder:_______________
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