EXHIBIT 4.4
EXHIBIT A TO PRIVATE
EQUITY CREDIT AGREEMENT
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement"), dated as of December
20, 2001, is made by and between COMPUTERIZED THERMAL IMAGING, INC., a
corporation organized and existing under the laws of the state of Nevada (the
"Company"), and BEACH BOULEVARD, L.L.C. or registered assigns (the "Holder"), an
entity organized and existing under the laws of the Cayman Islands (the
"Investor").
Recitals
WHEREAS, upon the terms and subject to the conditions of the Private
Equity Credit Agreement ("Equity Credit Agreement"), between the Investor and
the Company, the Company has agreed to issue and sell to the Investor up to
Twenty Million Dollars ($20,000,000), and warrants to purchase (641,026) shares
of the common stock of the Company ("Subscribed Shares") par value $.001 per
share (the "Common Stock"), and
WHEREAS, to induce the Investor to execute and deliver the Equity
Credit Agreement, the Company has agreed to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, "Securities Act"),
and applicable state securities laws with respect to the Subscribed Shares;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Investor hereby agree as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall have the
following meanings:
(i) "Potential Material Event" means any of the following: (a) the
possession by the Company of material information not ripe for disclosure in a
Registration Statement, which shall be evidenced by determinations in good faith
by the Board of Directors of the Company that disclosure of such information in
the Registration Statement would be detrimental to the business and affairs of
the Company, or (b) any material engagement or activity by the Company which
would, in the good faith determination of the Board of Directors of the Company,
be adversely affected by disclosure in a Registration Statement at such time,
which determination shall be accompanied by a good faith determination by the
Board of Directors of the Company that the Registration Statement would be
materially misleading absent the inclusion of such information.
(ii) "Subscription Date" means the date of this Agreement.
(iii) "Investor", has the meaning set forth in the preamble to this
Agreement.
(iv) "Register", "registered" and "registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
delayed or continuous basis ("Rule 415"), and the declaration or ordering of
effectiveness of such Registration Statement by the United States Securities and
Exchange Commission (the "SEC").
(v) "Registrable Securities" means the Subscribed Shares.
(vi) "Registration Statement" means a registration statement of the
Company under the Securities Act.
(b) Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Equity Credit Agreement or
in the Rules of the SEC.
2. REGISTRATION.
(a) MANDATORY REGISTRATION. The Company shall prepare and file with the
SEC, no later than thirty (30) business days after the Subscription Date, a
Registration Statement on Form S-3 (if use of such other form is then available
to the Company pursuant to the rules of the SEC and, if not, on such form
promulgated by the SEC for which the Company then qualifies and which counsel
for the Company shall deem appropriate for the offering of the Registrable
Securities) ("Registration Statement"), registering for distribution by the
Investor pursuant to Rule 457(o), no less than (a) 112% of the Maximum
Commitment Amount, and (b) 641,026 shares underlying the Warrants required to be
issued under the Equity Credit Agreement (the "Initial Registrable Securities").
Such Registration Statement shall state that, in accordance with Rules 416 and
457 under the Securities Act, it also covers such indeterminate number of
additional shares of Common Stock as may become issuable to prevent dilution
resulting from stock splits, or stock dividends. If at any time (i) the number
of Subscribed Shares exceeds the aggregate number of shares of Common Stock then
registered, the Company shall, within ten (10) business days after receipt of
written notice from the Investor, file with the SEC an additional Registration
Statement on Form S-3 or any other applicable registration statement, to
register the Subscribed Shares that exceed the aggregate number of shares of
Common Stock already registered.
(b) TERMINATION. If the Registration Statement covering the Registrable
Securities required to be filed by the Company pursuant to Section 2(a) hereof
is not declared effective within 90 days from the Subscription Date, or any
Blackout Period exceeding thirty (30) days, then the Investor's commitment
contained in the Equity Credit Agreement (the "Commitment") shall terminate and
the Investor shall be entitled to the sums set forth in Section 2.7 of the
Private Equity Credit Agreement.
(c) FAILURE TO MAINTAIN EFFECTIVENESS OF A REGISTRATION STATEMENT. In
the event the Company fails to have the Registration Statement declared
effective within ninety (90) days from the Subscription Date, or to maintain the
effectiveness of any Registration Statement (or the underlying prospectus),
including the payment of all necessary fees, during the Registration Period,
other than temporary suspensions permitted by Section 3(i), and the Investor
holds any Put Shares included in the Registration Statement at any time during
such period, the Company shall at the Investor's option, redeem the Put Shares
at the Investment Amount or pay to the Investor liquidated damages in
immediately available funds into an account designated by the Investor an amount
equal to two percent (2%) of the aggregate Investment Amount of Put Shares,
resulting from any Put Notice, if any, then held by the Investor for each ten
(10) calendar day period (prorated for partial periods). The Company shall not
be deemed to have used its best efforts to keep the Registration Statement
effective during the Registration Period if it voluntarily takes any action that
would result in the Investors not being able to sell all of the Registrable
Securities covered by such Registration Statement during the Effectiveness
Period, unless such action is required under applicable law or the Company has
filed a post-effective amendment to the Registration Statement and the
Commission has not declared it effective.
3. OBLIGATION OF THE COMPANY. In connection with the registration of
the Registrable Securities, the Company shall do each of the following:
(a) Prepare promptly, and file with the SEC within [thirty (30)] days
of the Subscription Date, a Registration Statement with respect to not less than
the number of Registrable Securities provided in Section 2(a) above, and,
thereafter, use all diligent efforts to cause the Registration Statement
relating to the Registrable Securities to become effective the earlier of (a)
five (5) business days after notice from the Securities and Exchange Commission
that the Registration Statement may be declared effective, or (b) ninety (90)
days after the Subscription Date, and keep the Registration Statement effective
at all times until the earliest of (i) the date that is eighteen (18) months
after the completion of the last Closing Date under the Equity Credit Agreement,
(ii) the date when the Investor may sell all Registrable Securities under Rule
144(k) without volume limitations, or (iii) the date the Investor no longer owns
any of the Registrable Securities (collectively, the "Registration Period"),
which Registration Statement (including any amendments or supplements, thereto
and prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times during the
Registration Period, and, during the Registration Period, and to comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until the expiration of the Registration Period.
(c) Permit a single firm of counsel designated by Investor to review
the Registration Statement and all amendments and supplements thereto a
reasonable period of time (but not less than five (5) Business Days) prior to
their filing with the SEC, and not file any document in a form to which such
counsel reasonably objects.
(d) Notify Investor and Investor's legal counsel identified to the
Company (which, until further notice, shall be deemed to be Xxxxxxx & Xxxxxx,
LLP, ATTN: Xxxxxx Xxxxxxx, Esq.; "INVESTOR'S COUNSEL") (and, in the case of
(i)(A) below, not less than five (5) Business Day prior to such filing) and (if
requested by any such person) confirm such notice in writing no later than one
(1) Business Day following the day (i): (A) when a prospectus or any prospectus
supplement or post-effective amendment to the Registration Statement is proposed
to be filed; (B) whenever the SEC notifies the Company whether there will be a
"review" of such Registration Statement; and (C) with respect to the
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the SEC or any other Federal or state
governmental authority for amendments or supplements to the Registration
Statement or the prospectus or for additional information; (iii) of the issuance
by the SEC of any stop order suspending the effectiveness of the Registration
Statement covering any or all of the Registrable Securities or the initiation of
any proceedings for that purpose; (iv) if at any time any of the representations
or warranties of the Company contained in any agreement (including any
securities purchase agreement) contemplated hereby ceases to be true and correct
in all material respects; (v) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any jurisdiction,
or the initiation or threatening of any proceeding for such purpose; and (vi) of
the occurrence of any event that to the knowledge of the Company makes any
statement made in the Registration Statement or the prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to the Registration Statement,
the prospectus or other documents so that, in the case of the Registration
Statement or the prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(e) Furnish to Investor, (i) promptly after the same is prepared and
publicly distributed, filed with the SEC, or received by the Company, one (1)
copy of the Registration Statement, each preliminary prospectus and the
prospectus, each amendment or supplement thereto, all correspondence to, with,
or from the SEC, and (ii) such number of copies of a prospectus, [including a
preliminary prospectus], and all amendments and supplements thereto and such
other documents, as the Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by the Investor;
(f) Use all diligent efforts to (i) register and/or qualify the
Registrable Securities covered by the Registration Statement under such other
securities or blue sky laws of such jurisdictions as the Investor may reasonably
request and in which significant volumes of shares of Common Stock are traded,
(ii) prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof at all
times during the Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualification in effect at all
times during the Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions: PROVIDED, HOWEVER, that the Company shall not be required in
connection therewith or as a condition thereto to (A) qualify to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(f), (B) subject itself to general taxation in any such
jurisdiction, (C) file a general consent to service of process in any such
jurisdiction, (D) provide any undertakings that cause more than nominal expense
or burden to the Company or (E) make any change in its charter or by-laws or any
then existing contracts, which in each case the Board of Directors of the
Company determines to be contrary to the best interests of the Company and its
stockholders;
(g) As promptly as practicable after becoming aware of such event,
notify the Investor of the happening of any event of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes any 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, in the light of the circumstances under which they
were made, not misleading ("Registration Default"), and use its best efforts to
promptly prepare a supplement or amendment to the Registration Statement or
other appropriate filing with the SEC to correct such untrue statement or
omission, and any other necessary steps to cure the Registration Default, and
deliver a number of copies of such supplement or amendment to the Investor as
the Investor may reasonably request. Failure to cure the Registration Default
within thirty (30) business days shall result in the Company incurring a
liquidated damage penalty of $1,000 per day for so long as more than 10,000
shares of Common Stock are held by the Investor;
(h) As promptly as practicable after becoming aware of such event,
notify the Investor (or, in the event of an underwritten offering, the managing
underwriters) of the issuance by the SEC of any notice of effectiveness or any
stop order or other suspension of the effectiveness of the Registration
Statement at the earliest possible time;
(i) Notwithstanding the foregoing, if at any time or from time to time
after the date of effectiveness of the Registration Statement, the Company
notifies Investor in writing of the existence of a Potential Material Event
("Blackout Notice"), Investor shall not offer or sell any Registrable
Securities, or engage in any other transaction involving or relating to the
Registrable Securities, from the time of the giving of notice with respect to a
Potential Material Event until Investor receives written notice from the Company
that such Potential Material Event either has been disclosed to the public or no
longer constitutes a Potential Material Event ("Blackout Period"); PROVIDED,
HOWEVER, that (a) the Company may not so suspend or delay the right of the
Investor to sell the Registrable Securities for more than two five (5) day
periods in the aggregate during any 12-month period with at least a ten (10)
Business Day interval between such periods, during the periods the Registration
Statement is required to be in effect, and PROVIDED FURTHER that the Company
shall, if lawful to do so, provide the Investor with at least two (2) business
days' notice of the existence but not the substance) of a Potential Material
Event.
(j) Use its reasonable efforts, if eligible, either to (i) cause all
the Registrable Securities covered by the Registration Statement to be listed on
a national securities exchange and on each additional national securities
exchange on which securities of the same class or series issued by the Company
are then listed, if any, if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (ii) secure designation of all
the Registrable Securities covered by the Registration Statement as a National
Association of Securities Dealers Automated Quotations System ("Nasdaq) "Small
Capitalization" within the meaning of Rule 11Aa2-1 of the SEC under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
quotation of the Registrable Securities on the Nasdaq Small Cap Market; or if,
despite the Company's commercially reasonable efforts to satisfy the preceding
clause (i) or (ii), the Company is unsuccessful in doing so, to secure NASD
authorization and quotation for such Registrable Securities on the
over-the-counter bulletin board and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register with the
National Association of Securities Dealers, Inc. ("NASD") as such with respect
to such Registrable Securities.
(k) Provide a transfer agent for the Registrable Securities not later
than the Effective Date of the Registration Statement;
(l) Cooperate with the Investor to facilitate the timely preparation
and delivery of certificates for the Registrable Securities to be offered
pursuant to the Registration Statement and enable such certificates for the
Registrable Securities to be in such denominations or amounts as the case may
be, as the Investor may reasonably request and registration in such names as the
Investor may reasonably request; and, within five (5) business days after a
Registration Statement which includes Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
selected by the Company to deliver, to the transfer agent for the Registrable
Securities (with copies to the Investor) an appropriate instruction and opinion
of such counsel, if so required by the Company's transfer agent; and
(m) Comply with all applicable rules and regulations of the Commission
and make generally available to its security holders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
not later than 45 days after the end of any 12-month period (or 90 days after
the end of any 12-month period if such period is a fiscal year) (i) commencing
at the end of any fiscal quarter in which Registrable Securities are sold to
underwriters in a firm commitment or best efforts underwritten offering and (ii)
if not sold to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Company after the effective date of the
Registration Statement, which statement shall cover said 12-month period, or end
shorter periods as is consistent with the requirements of Rule 158.
(n) Take all other reasonable actions necessary to expedite and
facilitate distribution to the Investor of the Registrable Securities pursuant
to the Registration Statement.
4. OBLIGATIONS OF THE INVESTOR. In connection with the registration of
the Registrable Securities, the Investor shall have the following obligations;
(a) It shall be a condition precedent to the obligations of the Company
to complete the registration pursuant to this Agreement with respect to the
Registrable Securities of the Investor that the Investor shall timely furnish to
the Company such information regarding itself, the Registrable Securities held
by it, and the intended method of disposition of the Registrable Securities held
by it, as shall be reasonably required to effect the registration of such
Registrable Securities and shall timely execute such documents in connection
with such registration as the Company may reasonably request. If the
Registration Statement refers to any Investor by name or otherwise as the holder
of any securities of the Company, then such Investor shall have the right to
require (i) the inclusion therein of language, in form and substance reasonably
satisfactory to such Investor, to the effect that the ownership by such Investor
of such securities is not to be construed as a recommendation by such Investor
of the investment quality of the Company's securities covered thereby and that
such ownership does not imply that such Investor will assist in meeting any
future financial requirements of the Company, or (ii) if such reference to such
Investor by name or otherwise is not required by the Securities Act or any
similar Federal statute then in force, the deletion of the reference to such
Investor in any amendment or supplement to the Registration Statement filed or
prepared subsequent to the time that such reference ceases to be required.
(b) The Investor by such Investor's acceptance of the Registrable
Securities agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder; and
(c) The Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(g) or
3(h) above, the Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until the Investor receives the copies of the supplemented or amended
prospectus contemplated by Section 3(g) or 3(h) and, if so directed by the
Company, the Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in the Investor's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.
5. EXPENSES OF REGISTRATION. (a) All reasonable expenses (other than
underwriting discounts and commissions to the Investor) incurred in connection
with Registrations, filings or qualifications pursuant to SECTION 3, including,
without limitation, all Registration, listing, and qualifications fees, printers
and accounting fees, the fees and disbursements of counsel for the Company and a
fee for a single counsel for Investor of $4,500 for the initial Registration
Statement and $2,000 for each Additional Registration Statement covering the
Registrable Securities shall be borne by the Company; and
(b) Except as otherwise provided for in SCHEDULE 5(b) attached hereto,
the Company nor any of its subsidiaries has, as of the date hereof, and the
Company shall not on or after the date of this Agreement, enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to Investor in this Agreement or otherwise conflicts with the provisions
hereof. Except as otherwise provided for in SCHEDULE 5(b), the Company has not
previously entered into any agreement granting any registration rights with
respect to any of its securities to any person. Except as otherwise provided for
in this SECTION 5, and without limiting the generality of the foregoing, without
the written consent of Investor, the Company shall not grant to any person any
new right to request the Company to Register any securities of the Company under
the Securities Act unless the rights so granted are subject in all respects to
the prior rights in full of Investor set forth herein, and are not otherwise in
conflict or inconsistent with the provisions of this Agreement and the other
Transaction Documents.
6. INDEMNIFICATION. After Registrable Securities are included in a
Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless, the Investor, the directors, if any, of such Investor, the officers,
if any, of such Investor, each person, if any, who controls the Investor within
the meaning of the Securities Act or the Exchange Act (each, an "Indemnified
Person"), against any losses, claims, damages, liabilities or expenses (joint or
several) incurred (collectively, "Claims") to which any of them may become
subject under the Securities Act, the Exchange Act or otherwise, insofar as such
Claims (or actions or proceedings, whether commenced in respect thereof) arise
out of or are based upon: (i) any untrue statement or untrue statement of a
material fact contained in the Registration Statement or any post-effective
amendment thereof or the omission or omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (ii) any untrue statement or untrue statement of a material fact
contained in the final prospectus (as amended or supplemented, if the Company
files any amendment thereof or supplement thereto with the SEC) or the omission
or omission to state therein any material fact necessary to make the statements
made therein, in the light of the circumstances under which the statements
therein were made, not misleading or (iii) any violation or violation by the
Company of the Securities Act, the Exchange Act, any state securities law or any
rule or regulation under the Securities Act, the Exchange Act or any state
securities law (the matters in the foregoing clauses (i) through (iii) being
collectively referred to as "Violations"). The Company shall reimburse the
Investor, promptly as such expenses are incurred and are due and payable, for
any reasonable legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(a) shall not (i) apply to any Claims arising out of
or based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto, if
such prospectus was timely made available by the Company pursuant to Section
3(b) hereof; (ii) be available to the extent such Claim is based on a failure of
the Investor to deliver or cause to be delivered the prospectus made available
by the Company; or (iii) apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. The Investor will indemnify
the Company, its officers, directors and agents (including legal counsel) (each
an "Indemnified Person") against any claims arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company, by or on behalf of such Investor, expressly
for use in connection with the preparation of the Registration Statement,
subject to such limitations and conditions set forth in this Section 6. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person or Indemnified Party, and shall
survive the offering of the Registrable Securities by the Investor.
(b) Promptly after receipt by an Indemnified Person under this Section
6 of notice of the commencement of any action (including any governmental
action), such Indemnified Person shall, if a Claim in respect thereof is to be
made against any indemnifying party under this Section 6, 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 control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person, as
the case may be; PROVIDED, HOWEVER, that an Indemnified Person shall have the
right to retain its own counsel with the reasonable fees and expenses to be paid
by the indemnifying party, if, in the reasonable opinion of counsel retained by
the indemnifying party, the representation by such counsel of the Indemnified
Person and the indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person and any other
party represented by such counsel in such proceeding. [In such event, the
Company shall pay for only one separate legal counsel for the Investor selected
by the Investor.] 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 Person under
this Section 6, except to the extent that the indemnifying party is prejudiced
in its ability to defend such action. The indemnification required by this
Section 6 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.
7. CONTRIBUTION. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; PROVIDED,
HOWEVER, that (a) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6; and (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation.
8. REPORTS UNDER EXCHANGE ACT. With a view to making available to the
Investor the benefits of Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the SEC that may at any time permit the
Investor to sell securities of the Company to the public without registration
("Rule 144"), the Company agrees to use its reasonable best efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Exchange Act; and
(c) furnish to the Investor so long as the Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (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
solely if unavailable by Xxxxx, and (iii) such other information as may be
reasonably requested to permit the Investors to sell such securities pursuant to
Rule 144 without registration.
(d) The Company will, at the request of any Investor of Registrable
Securities, give its Transfer Agent irrevocable instructions (supported by an
opinion of Company counsel, if required or requested by the Transfer Agent) to
the effect that, upon the Transfer Agent's receipt from such Investor of:
(i) a certificate (a "Rule 144 Certificate") certifying (A) that such
Investor has held the shares of Registrable Securities which the
Investor proposes to sell (the "Securities Being Sold") for a period of
not less than (1) year and (B) as to such other matters as may be
appropriate in accordance with Rule 144 under the Securities Act, and
(B) an opinion of counsel acceptable to the Company (for which purposes
it is agreed that the initial Investor's Counsel shall be deemed
acceptable) that, based on the Rule 144 Certificate, Securities Being
Sold may be sold pursuant to the provisions of Rule 144, even in the
absence of an effective Registration Statement,
the Transfer Agent is to effect the transfer of the Securities Being Sold and
issue to the buyer(s) or transferee(s) thereof one or more stock certificates
representing the transferred Securities Being Sold without any restrictive
legend and without recording any restrictions on the transferability of such
shares on the Transfer Agent's books and records (except to the extent any such
legend or restriction results from facts other than the identity of the
Investor, as the seller or transferor thereof, or the status, including any
relevant legends or restrictions, of the shares of the Securities Being Sold
while held by the Investor). If the Transfer Agent requires any additional
documentation at the time of the transfer, the Company shall deliver or cause to
be delivered all such reasonable additional documentation as may be necessary to
effectuate the issuance of an unlegended certificate.
9. MISCELLANEOUS.
(a) REGISTERED OWNERS. A person or entity is deemed to be a holder of
Registrable Securities whenever such person or entity owns of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more persons or entities with respect to the
same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities, who shall provide a bond or other form of satisfactory
protection to Company so as to cover contingent liability against any other
claimants.
(b) RIGHTS CUMULATIVE; WAIVERS. The rights of each of the parties under
this Agreement are cumulative. The rights of each of the parties hereunder shall
not be capable of being waived or varied other than by an express waiver or
variation in writing. Any failure to exercise or any delay in exercising any of
such rights shall not operate as a waiver or variation of that or any other such
right. Any defective or partial exercise of any of such rights shall not
preclude any other or further exercise of that or any other such right. No act
or course of conduct or negotiation on the part of any party shall in any way
preclude such party from exercising any such right or constitute a suspension or
any variation of any such right.
(b) LIABILITY. The Company acknowledges that any failure by the Company
to perform its obligations under Section 3(a) hereof, or any delay in such
performance could result in loss to the Investors, and the Company agrees that,
in addition to any other liability the Company may have by reason of such
failure or delay, the Company shall be liable for all direct damages caused by
any such failure or delay, unless the same is the result of force majeure.
Neither party shall be liable for consequential damages.
(c) BENEFIT; SUCCESSORS BOUND. This Agreement and the terms, covenants,
conditions, provisions, obligations, undertakings, rights, and benefits hereof,
shall be binding upon, and shall inure to the benefit of, the undersigned
parties and their heirs, executors, administrators, representatives, successors,
and permitted assigns.
(d) ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof. There are no
promises, agreements, conditions, undertakings, understandings, warranties,
covenants or representations, oral or written, express or implied, between them
with respect to this Agreement or the matters described in this Agreement,
except as set forth in this Agreement and in the other documentation relating to
the transactions contemplated by this Agreement solely as same are referred to
herein. Any such negotiations, promises, or understandings shall not be used to
interpret or constitute this Agreement.
(e) ASSIGNMENT. The rights to have the Company register Registrable
Securities pursuant to this Agreement may be assigned by the Investors to any
transferee, only if: (a) the assignment requires that the Transferee be bound by
all of the provisions contained in this Agreement, and Investor and the
transferee or assignee (the "Transferee") enter into a written agreement, which
shall be enforceable by the Company against the Transferee and by the Transferee
against the Company, to assign such rights; and (b) immediately following such
transfer or assignment the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act and applicable
state securities laws. In the event of any delay in filing or effectiveness of
the Registration Statement as a result of such assignment, the Company shall not
be liable for any damages arising from such delay.
(f) AMENDMENT. Any provision of this Agreement may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Company and Investor. Any amendment or waiver effected in accordance with this
Section 9 shall be binding upon the Company and any subsequent Transferees.
(g) SEVERABILITY. Each part of this Agreement is intended to be
severable. In the event that any provision of this Agreement is found by any
court or other authority of competent jurisdiction to be illegal or
unenforceable, such provision shall be severed or modified to the extent
necessary to render it enforceable and as so severed or modified, this Agreement
shall continue in full force and effect.
(h) NOTICES. Notices required or permitted to be given hereunder shall
be in writing and shall be deemed to be given as provided in the Equity Credit
Agreement.
(i) GOVERNING LAW. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the jurisdiction
of the federal courts whose districts encompass any part of the City of New York
or the state courts of the State of New York sitting in the City of New York in
connection with any dispute arising under this Agreement and hereby waives, to
the maximum extent permitted by law, any objection, including any objection
based on FORUM NON COVENIENS, to the bringing of any such proceeding in such
jurisdictions. To the extent determined by such court, the Company shall
reimburse the Investor for any reasonable legal fees and disbursements incurred
by the Investor in enforcement of or protection of any of its rights under this
Agreement.
(j) JURY TRIAL WAIVER. The Company and the Investor hereby waive a
trial by jury in any action, proceeding or counterclaim brought by either of the
parties hereto against the other in respect of any matter arising out of or in
connection with the Transaction Documents.
(k) CONSENTS. The person signing this Agreement on behalf of each party
hereby represents and warrants that he has the necessary power, consent and
authority to execute and deliver this Agreement on behalf of that party.
(l) FURTHER ASSURANCES. In addition to the instruments and documents to
be made, executed and delivered pursuant to this Agreement, the parties hereto
agree to make, execute and deliver or cause to be made, executed and delivered,
to the requesting party such other instruments and to take such other actions as
the requesting party may reasonably require to carry out the terms of this
Agreement and the transactions contemplated hereby.
(m) SECTION HEADINGS. The Section headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(n) CONSTRUCTION. Unless the context otherwise requires, when used
herein, the singular shall be deemed to include the plural, the plural shall be
deemed to include each of the singular, and pronouns of one or no gender shall
be deemed to include the equivalent pronoun of the other or no gender.
(o) EXECUTION IN COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same agreement. This Agreement, once executed by a
party, may be delivered to the other party hereto by telephone line facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement. A facsimile transmission of this signed Agreement
shall be legal and binding on all parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
COMPUTERIZED THERMAL IMAGING, INC.
COMPUTERIZED THERMAL IMAGING, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
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Title: CFO, Secretary, Treasurer
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BEACH BOULEVARD LLC
By: Navigator Management Limited
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By: /s/ Xxxxx X. Xxxx
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Title: Director
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