REGISTRATION RIGHTS AGREEMENT
REGISTRATION
RIGHTS AGREEMENT (this "Agreement"), dated as of November__, 2005, by and
between Comprehensive Healthcare Solutions, Inc., a corporation
organized under the laws of state of Delaware, with its principal executive
office at 00 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxx Xxxx 00000 (the "Company"),
and the undersigned investor (the "Investor").
WHEREAS,
upon the terms and subject to the conditions of the Subscription Agreement
between the Investor and the Company (the "Subscription Agreement"), the Company
has agreed to issue and sell to the Investor a convertible note of the Company,
which will be convertible into shares of the common stock, $.001 par value
per
share (the "Common Stock"), of the Company as well as Warrant to purchase shares
of the Company’s common stock; and
WHEREAS,
to induce the Investor to execute and deliver the Subscription 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, the "1933 Act"), and applicable state
securities laws, with respect to the shares of Common Stock issuable upon
conversion of the Note.
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 each of the Initial Investors hereby agree
as follows:
1. DEFINITIONS.
a. As
used
in this Agreement, the following terms shall have the following
meanings:
(i) “Investors”
means
the
Initial Investors and
any transferee
or assignee who agrees to become bound by the provisions of this Agreement
in
accordance
with
Section 9 hereof.
(ii) “register,”
“registered,” and
“registration”
refer
to
a registration effected by preparing and filing a Registration Statement or
Statements in compliance with the 1933 Act and pursuant to Rule 415 under the
1933 Act or any successor rule providing for offering securities on a 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”).
(iii) “Registrable
Securities” means
the
Conversion Shares issued or issuable upon conversion or otherwise pursuant
to
the Notes and Additional Notes (as defined in the Subscription Agreement)
including, without limitation, Damages Shares (as defined in the Notes) issued
or issuable pursuant to the Notes, shares of Common Stock issued or issuable
in
payment of the Standard Liquidated Damages Amount (as defined in the
Subscription Agreement), shares issued or issuable in respect in redemption
of
the Notes in accordance with
the
terms
thereof) and Warrant
Shares issuable, upon exercise or otherwise pursuant
to the
Warrants
and Additional
Warrants
(as
defined in the Subscription Agreement), and any
shares of capital stock issued or issuable as a dividend on or in exchange
for
or otherwise with respect to any of
the
foregoing.
(iv)
“Registration Statement” means
a
registration statement of the Company under the 0000 Xxx.
b.
Capitalized
terms used herein and not
otherwise defined herein shall have the respective meanings
set
forth
in the
Subscription Agreement or the Convertible Note.
2. REGISTRATION.
a. Mandatory
Registration. The
Company shall prepare, and, on or prior to thirty (30) days from the date of
Closing (as defined in the Subscription Agreement) (the “Filing
Date”), file
with
the SEC a Registration Statement on Form SB-2 (or, if Form SB-2 is not then
available, on such form of Registration Statement as is then available to effect
a registration of the Registrable Securities, subject to the consent of the
Initial Investors, which consent will not be unreasonably withheld) covering
the
resale of the Registrable Securities underlying the Notes and Warrants issued
or
issuable pursuant to the Subscription Agreement, which Registration Statement,
to the extent allowable under the 1933 Act and the rules and regulations
promulgated thereunder (including Rule 416), shall state that such Registration
Statement also covers such indeterminate number of additional shares of Common
Stock as may become issuable upon conversion of or otherwise pursuant to the
Notes and exercise of the Warrants to prevent dilution resulting from stock
splits, stock dividends or similar transactions. The number of shares of Common
Stock initially included in such Registration Statement shall be no less than
an
amount equal to one hundred and seventy-five (175%) percent m of the
number
of
Conversion Shares that are then issuable upon conversion of the Notes and
Additional
Notes
(based on the Variable Conversion Price as would then be in effect and assuming
the Variable Conversion Price is the Conversion Price at such time), and the
number of Warrant Shares that are then issuable upon exercise of the Warrants,
without regard to any limitation on the Investor’s ability to convert the Notes
or exercise the Warrants. The Company acknowledges that the number of shares
initially included in the Registration Statement represents a good faith
estimate of the maximum number of shares issuable upon conversion of the Notes
and upon exercise of the Warrants.
b. Underwritten
Offering. If
any
offering pursuant to a Registration Statement pursuant to Section 2(a) hereof
involves an underwritten offering, the Investors who hold a majority in interest
of the Registrable Securities subject to such underwritten offering,
with
the
consent of a majority-in-interest of the Initial Investors, shall have the
right
to select one
legal
counsel and an investment banker or bankers and manager or managers to
administer the offering, which investment banker or bankers or manager or
managers shall be reasonably satisfactory to the Company.
c. Payments
by
the
Company. The
Company shall use its best efforts to obtain effectiveness of the Registration
Statement as soon as practicable. If (i) the
Registration
Statement(s) covering the Registrable Securities required to be filed by the
Company pursuant to Section 2(a) hereof is not filed by the Filing Date or
declared effective by the SEC on or prior to ninety (90) days from the Filing
Date of the SB-2 with the SEC, or (ii) after the Registration Statement has
been
declared effective by the SEC, sales of all of the Registrable Securities cannot
be made pursuant to the Registration Statement, or (iii) the Common Stock is
not
listed or included for quotation on the Nasdaq National Market (“Nasdaq”),
the
Nasdaq SmallCap Market (“Nasdaq
SmallCap”), the
New
York Stock Exchange
(the “NYSE”)
or
the
American Stock Exchange (the “AMEX”)
after
being so listed or
included
for quotation, or (iv) the Common Stock ceases to be traded on the
Over-the-Counter Bulletin Board (the “OTCBB”)
or
any
equivalent replacement exchange prior to being listed or included for quotation
on one of the aforementioned markets, then the Company will make payments to
the
Investors in such amounts and at such times as shall be determined pursuant
to
this Section 2(c) as partial relief for the damages to the Investors by reason
of any such delay in or reduction of their ability to sell the Registrable
Securities (which remedy shall not be exclusive of any other remedies available
at law or in equity). The Company shall pay to each holder of the Notes or
Registrable Securities an amount equal to the then outstanding principal amount
of the Notes (and, in the case of holders of Registrable Securities, the
principal amount of Notes from which such Registrable Securities were converted)
(“Outstanding
Principal Amount”), multiplied
by the Applicable Percentage (as defined below) times the sum of: (i) the number
of months (prorated for partial months) after the Filing Date or the end of
the
aforementioned ninety (90) day period and prior to the date the Registration
Statement is declared effective by the SEC, provided, however, that there shall
be excluded from such period any delays which are solely attributable to changes
required by the Investors in the Registration Statement with respect to
information relating to the Investors, including, without limitation, changes
to
the plan of distribution, or to the failure of the Investors to conduct their
review of the Registration Statement pursuant to Section 3(h) below in a
reasonably prompt manner; (ii) the number of months (prorated for partial
months) that sales of all of the Registrable Securities cannot be made pursuant
to the Registration Statement after the Registration Statement has been declared
effective (including, without limitation, when sales cannot be made by reason
of
the Company’s failure to properly supplement or amend the prospectus included
therein in accordance with the terms of this Agreement, but excluding any days
during an Allowed Delay (as defined in Section 3(f)); and (iii) the number
of
months (prorated for partial months) that the Common Stock is not listed or
included for quotation on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX
or
that trading thereon is halted after the Registration Statement has been
declared effective. The term “Applicable
Percentage” means
one
hundredths (.01). (For example, if the Registration Statement becomes effective
one (1) month after the end of such ninety (90) day period, the Company would
pay $2,500 for each $250,000 of Outstanding Principal Amount. If thereafter,
sales could not be made pursuant to the Registration Statement for an additional
period of one (1) month, the Company would pay an additional $2,500 for each
$250,000 of Outstanding Principal Amount.) Such amounts shall be paid in cash
or, at the Company’s option, in shares of Common Stock priced at the Conversion
Price (as defined in the Notes) on such payment date. Notwithstanding same,
the
Investors agree they will extend the date that these payments will commence
for
up to forty-five (45) days if the delay in the Effective Fate is due to any
review undertaken by the SEC and the Company has demonstrated that it has used
its best efforts in filing the registration statement and responding to the
SEC.
d. Piggy-Back
Registrations. Subject
to the last sentence of this Section 2(d), if at any time prior to the
expiration of the Registration Period (as hereinafter defined) the Company
shall
determine to file with the SEC a Registration Statement relating to an offering
for its own account or the account of others under the 1933 Act of any of its
equity securities (other than on Form S-4 or Form S-8 or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with stock option or other bona
fide,
employee benefit plans), the Company shall send to each Investor who is entitled
to registration rights under this Section 2(d) written notice of such
determination and, if within fifteen (15) days after the effective date of
such
notice, such Investor shall so request in writing, the Company shall include
in
such Registration Statement all or any part of the Registrable Securities such
Investor requests to be registered, except that if, in connection with any
underwritten public offering for the account of the Company the managing
underwriter(s) thereof shall impose a limitation on the number of shares of
Common Stock which may be included in the Registration Statement because, in
such underwriter(s)’ judgment, marketing or other factors dictate such
limitation is necessary to facilitate public distribution, then the Company
shall be obligated to include in such Registration Statement only such limited
portion of the Registrable Securities with respect to which such Investor has
requested inclusion hereunder as the underwriter shall permit. Any exclusion
of
Registrable Securities shall be made pro rata among the Investors seeking to
include Registrable Securities in proportion to the number of Registrable
Securities sought to be included by such Investors; provided, however,
that the
Company shall not exclude any Registrable Securities unless the Company has
first excluded all outstanding securities, the holders of which are not entitled
to inclusion of such securities in such Registration Statement or are not
entitled to pro rata inclusion with the Registrable Securities; and provided, further, however,
that,
after giving effect to the immediately preceding proviso, any exclusion of
Registrable Securities shall be made pro rata with holders of other securities
having the right to include such securities in the Registration Statement other
than holders of securities entitled to inclusion of their securities in such
Registration Statement by reason of demand registration rights. No right to
registration of Registrable Securities under this Section 2(d) shall be
construed to limit any registration required under Section 2(a) hereof. If
an
offering in connection with which an Investor is entitled to registration under
this Section 2(d) is an underwritten offering, then each Investor whose
Registrable Securities are included in such Registration Statement shall, unless
otherwise agreed by the Company, offer and sell such Registrable Securities
in
an underwritten offering using the same underwriter or underwriters and, subject
to the provisions of this Agreement, on the same terms and conditions as other
shares of Common Stock included in such underwritten offering. Notwithstanding
anything to the contrary set forth herein, the registration rights of the
Investors pursuant to this Section 2(d) shall only be available in the event
the
Company fails to timely file, obtain effectiveness or maintain effectiveness
of
any Registration Statement to be filed pursuant to Section 2(a) in accordance
with the terms of this Agreement.
e. Eligibility
for Form X-0, XX-0 or S-1; Conversion to Form S-3. The
Company represents and warrants that it meets the requirements for the use
of
Form X-0, XX-0 or S-1 for registration of the sale by the Initial Investors
and
any other Investors of the Registrable Securities. The Company agrees to file
all reports required to be filed by the Company with the SEC in a timely manner
so as to remain eligible or become eligible, as the case may be, and thereafter
to maintain its eligibility, for the use of Form S-3. If the Company is not
currently eligible to use Form S-3, not later than five (5) business days after
the Company
first
meets the registration eligibility and transaction requirements for the use
of
Form S-3 (or any successor form) for registration of the offer and sale by
the
Initial Investors and any other Investors of Registrable Securities, the Company
shall file a Registration Statement on Form S-3 (or such successor form) with
respect to the Registrable Securities covered by the Registration Statement
on
Form SB-2 or Form S-1, whichever is applicable, filed pursuant to Section 2(a)
(and include in such Registration Statement on Form S-3 the information required
by Rule 429 under the 0000 Xxx) or convert the Registration Statement on Form
SB-2 or Form S-1, whichever is applicable, filed pursuant to Section 2(a) to
a
Form S-3 pursuant to Rule 429 under the 1933 Act and cause such Registration
Statement (or such amendment) to be declared effective no later than thirty
(30)
days after filing. In the event of a breach by the Company of the provisions
of
this Section 2(e), the Company will be required to make payments pursuant to
Section 2(c) hereof.
3.
OBLIGATIONS
OF THE COMPANY.
In
connection with the registration of the Registrable Securities, the Company
shall have the following obligations:
a. The
Company shall prepare promptly, and file with the SEC not later than the Filing
Date, a Registration Statement with respect to the number of Registrable
Securities provided in Section 2(a), and thereafter use its best efforts to
cause such Registration Statement relating to Registrable Securities to become
effective as soon as possible after such filing but in no event later than
ninety (90) days from the Filing Date), and keep the Registration Statement
effective pursuant to Rule 415 at all times until such date as is the earlier
of
(i) the date on which all of the Registrable Securities have been sold and
(ii)
the date on which the Registrable Securities (in the opinion of counsel to
the
Initial Investors) may be immediately sold to the public without registration
or
restriction (including, without limitation, as to volume by each holder thereof)
under the 1933 Act (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 not misleading.
b. The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statements and
the prospectus used in connection with the Registration Statements as may be
necessary to keep the Registration Statements effective at all times during
the
Registration Period, and, during such period, comply with the provisions of
the
1933 Act with respect to the disposition of all Registrable Securities of the
Company covered by the Registration Statements until
such time as all of such Registrable Securities have been disposed of in
accordance with the
intended
methods of disposition by the seller or sellers thereof as set forth in the
Registration Statements. In the event the number of shares available under
a
Registration Statement filed pursuant to this Agreement is insufficient to
cover
all of the Registrable Securities issued or issuable upon conversion of the
Notes and exercise of the Warrants, the Company shall amend the Registration
Statement, or file a new Registration Statement (on the short form available
therefor, if applicable), or both, so as to cover all of the Registrable
Securities, in each case, as soon as practicable, but in any event within
fifteen (15) days after the necessity therefor arises (based on the market
price
of the Common Stock and other relevant factors on which the
Company
reasonably elects to rely). The Company shall use its best efforts to cause
such
amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof, but in any event within thirty (30)
days after the date on which the Company reasonably first determines (or
reasonably should have determined) the need therefor. The
provisions of Section 2(c) above shall be applicable with respect to such
obligation, with the
ninety
(90) days running from the day the Company reasonably first determines (or
reasonably should have determined) the need therefor.
c. The
Company shall furnish to each Investor whose Registrable Securities are included
in a Registration Statement and its legal counsel (i) promptly (but in no event
more than five (5) business days) after the same is prepared and publicly
distributed, filed with the SEC, or received by the Company, one copy of each
Registration Statement and any amendment thereto, each preliminary prospectus
and prospectus and each amendment or supplement thereto, and, in the case of
the
Registration Statement referred to in Section 2(a), each letter written by
or on
behalf of the Company to the SEC or the staff of the SEC, and each item of
correspondence from the SEC or the staff of the SEC, in each case relating
to
such Registration Statement (other than any portion of any thereof which
contains information for which the Company has sought confidential treatment),
and (ii) promptly (but in no event more than two (2) business days) after the
Registration Statement is declared effective by the SEC, such number of copies
of a prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as such Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Investor. The Company will immediately notify each Investor by
facsimile of the effectiveness of each Registration Statement or any
post-effective amendment. The Company will promptly respond to any and all
comments received from the SEC (which comments shall promptly be made available
to the Investors upon request), with a view towards causing each Registration
Statement or any amendment thereto to be declared effective by the SEC as soon
as practicable, shall promptly file an acceleration request as soon as
practicable (but in no event more than five (5) business days) following the
resolution or clearance of all SEC comments or, if applicable, following
notification by the SEC that any such Registration Statement or any amendment
thereto will not be subject to review and shall, if required by SEC Rules,
promptly file with the SEC a final prospectus as soon as practicable (but in
no
event more than two (2) business days) following receipt by the Company from
the
SEC of an order declaring the Registration Statement effective. In the event
of
a breach by the Company of the provisions of this Section 3(c), the Company
will
be required to make payments pursuant to Section 2(c) hereof.
d. The
Company shall use reasonable efforts to (i) register and qualify the Registrable
Securities covered by the Registration Statements under such other securities
or
“blue sky” laws of such jurisdictions in the United States as the Investors who
hold a majority in interest of the Registrable Securities being offered
reasonably request, (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 during
the Registration Period, (iii) take such other actions as may be necessary
to
maintain such registrations and qualifications 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(d), (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 the Company undue expense
or burden, or (e) make any change in its charter or bylaws, which in each case
the Board of Directors of the Company determines to be contrary to the best
interests of the Company and its shareholders.
e. In
the
event Investors who hold a majority-in-interest of the Registrable Securities
being offered in the offering (with the approval of a majority-in-interest
of
the Initial Investors) select underwriters for the offering, the Company shall
enter into and perform its obligations under an underwriting agreement, in
usual
and customary form, including, without limitation, customary indemnification
and
contribution obligations, with the underwriters of such offering.
f. As
promptly as practicable after becoming aware of such event, the Company shall
notify each Investor of the happening of any event, of which the Company has
knowledge, as a result of which the prospectus included in any Registration
Statement, as then in effect, includes an untrue statement of a material fact
or
omission to state a material fact required to be stated therein or necessary
to
make the statements therein not misleading, and use its best efforts promptly
to
prepare a supplement or amendment to any Registration Statement to correct
such
untrue statement or omission, and deliver such number of copies of such
supplement or amendment to each Investor as such Investor may reasonably
request; provided that, for not more than ten (10) consecutive trading days
(or
a total of not more than twenty (20) trading days in any twelve (12) month
period), the Company may delay the disclosure of material non-public information
concerning the Company (as well as prospectus or Registration Statement
updating) the disclosure of which at the time is not, in the good faith opinion
of the Company, in the best interests of the Company (an “Allowed
Delay”); provided,
further, that the Company shall promptly (i) notify the Investors in writing
of
the existence of (but in no event, without the prior written consent of an
Investor, shall the Company disclose to such investor any of the facts or
circumstances regarding) material non-public information giving rise to an
Allowed Delay and (ii) advise the Investors in writing to cease all sales under
such Registration Statement until the end of the Allowed Delay. Upon expiration
of the Allowed Delay, the Company shall again be bound by the first sentence
of
this Section 3(f) with respect to the information giving rise
thereto.
g. The
Company shall use its best efforts to prevent the issuance of any
stop
order or other suspension of effectiveness of any Registration Statement, and,
if such an
order is
issued, to obtain the withdrawal of such order at the earliest possible moment
and to notify each Investor who holds Registrable Securities being sold (or,
in
the event of an underwritten offering, the managing underwriters) of the
issuance of such order and the resolution thereof.
h. The
Company shall permit a single firm of counsel designated by the Initial
Investors to review such Registration Statement and all amendments and
supplements thereto (as well as all requests for acceleration or effectiveness
thereof) a reasonable period of time prior to their filing with the SEC, and
not
file any document in a form to which such counsel reasonably objects and will
not request acceleration of such Registration Statement without prior notice
to
such counsel. The sections of such Registration Statement covering
information
with respect to the Investors, the Investor’s beneficial ownership of securities
of the Company
or the
Investors intended method of disposition of Registrable Securities
shall conform to the information provided to the Company
by each
of the Investors.
i. At
the
request of any Investor, the Company shall furnish, on the date that Registrable
Securities are delivered to an underwriter, if any, for sale in connection
with
any Registration Statement or, if such securities are not being sold by an
underwriter, on the date of effectiveness thereof (i) an opinion, dated as
of
such date, from counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given
in
an underwritten public offering, addressed to the underwriters, if any, and
the
Investors and (ii) a letter, dated such date, from the Company’s independent
certified public accountants in form and substance as is customarily given
by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and the
Investors.
j. The
Company shall hold in confidence and not make any disclosure of information
concerning an Investor provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities laws, (ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction, or (iv) such information has
been made generally available to the public other than by disclosure in
violation of this or any other agreement. The Company agrees that it shall,
upon
learning that disclosure of such information concerning an Investor is sought
in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to such Investor prior to making such disclosure,
and
allow the Investor, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such
information.
k. The
Company shall (i) cause all the Registrable Securities covered by the
Registration Statement to be listed on each 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) to the extent the securities of the
same class or series are not then listed on a national securities exchange,
secure the designation and quotation, of all the Registrable Securities covered
by the Registration Statement on Nasdaq or, if not eligible for Nasdaq, on
Nasdaq SmallCap or, if not eligible for Nasdaq or Nasdaq SmallCap, on the OTCBB
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.
l. The
Company shall provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the effective date of
the
Registration
Statement.
m. The
Company shall cooperate with the Investors who hold Registrable Securities
being
offered and the managing underwriter or underwriters, if any, to facilitate
the
timely preparation and delivery of certificates (not bearing any restrictive
legends) representing Registrable Securities to be offered pursuant to a
Registration Statement and enable
such
certificates to be in such denominations or amounts, as the case may be, as
the
managing underwriter or underwriters, if any, or the Investors may reasonably
request and registered in such names as the managing underwriter or
underwriters, if any, or the Investors may request, and, within three (3)
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 Investors whose Registrable
Securities are included in such Registration Statement) an instruction in the
form attached hereto as Exhibit
1 and
an
opinion of such counsel in the form attached hereto as Exhibit
2.
n. At
the
request of the holders of a majority-in-interest of the Registrable Securities,
the Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and
any
prospectus used in connection with the Registration Statement as may be
necessary in order to change the plan of distribution set forth in such
Registration Statement.
o. From
and
after the date of this Agreement, the Company shall not, and
shall
not agree to, allow the holders of any securities of the Company to include
any
of their
securities, in excess of 250,000 shares of Common Stock, in any Registration
Statement under Section 2(a) hereof or any amendment or supplement thereto
under
Section 3(b) hereof without the consent of the holders of a majority-in-interest
of the Registrable Securities.
p. The
Company shall take all other reasonable actions necessary to expedite and
facilitate disposition by the Investors of Registrable Securities pursuant
to
a
Registration
Statement.
4.
OBLIGATIONS
OF THE INVESTORS.
In
connection with the registration of the Registrable Securities, the Investors
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 a particular Investor that such Investor shall 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 execute such documents in connection with such registration
as the Company may reasonably request. At least three (3) business days prior
to
the first anticipated filing date of the Registration Statement, the Company
shall notify each Investor of the information the Company requires from each
such Investor.
b. Each
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 Statements hereunder, unless
such Investor has notified the Company in writing of such Investor’s election to
exclude all of such Investor’s Registrable Securities from the Registration
Statements.
c. In
the
event Investors holding a majority-in-interest of the Registrable Securities
being registered (with the approval of the Initial Investors) determine to
engage the services of an underwriter, each Investor agrees to enter into and
perform such Investor’s
obligations under an underwriting agreement, in usual and customary form,
including,
without
limitation, customary indemnification and contribution obligations, with the
managing underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of the
Registrable Securities, unless such Investor has notified the Company in writing
of such Investor’s election to exclude all of such Investor’s Registrable
Securities from such Registration Statement.
d. Each
Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(f) or 3(g), such
Investor will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Investor’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(f) or 3(g) and, if so directed by the
Company, such 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 such Investor’s
possession, of the prospectus covering such Registrable Securities current
at
the time
of
receipt of such notice.
e. No
Investor may participate in any underwritten registration hereunder unless
such
Investor (i) agrees to sell such Investor’s Registrable Securities on the
basis
provided in any underwriting arrangements in usual and customary form entered
into by the
Company,
(ii) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements, and (iii) agrees to pay its pro rata share
of
all underwriting discounts and commissions and any expenses in excess of those
payable by the Company pursuant to Section 5 below.
5. EXPENSES
OF REGISTRATION.
All
reasonable expenses, other than
underwriting
discounts and commissions,
incurred in connection with registrations, filings or qualifications
pursuant
to
Sections 2 and 3,
including, without limitation, all registration, listing and qualification
fees, printers and accounting
fees, the fees and disbursements
of counsel for the Company,
and
the reasonable fees and disbursements
of one counsel selected by the Initial Investors pursuant to Sections 2(b)
and 3(h)
hereof shall be borne by the Company.
6. INDEMNIFICATION.
In
the
event any Registrable Securities are included in a Registration Statement under
this
Agreement:
a. To
the
extent permitted by law, the Company will indemnify, hold harmless and defend
(i) each Investor who holds such Registrable Securities, (ii) the directors,
officers, partners, employees, agents and each person who controls any Investor
within the meaning of the 1933 Act or the Securities Exchange Act of 1934,
as
amended (the “1934
Act”),
if
any,
(iii) any underwriter (as defined in the 0000 Xxx) for the Investors, and (iv)
the directors, officers, partners, employees and each person who controls any
such underwriter within the meaning of the 1933 Act or the 1934 Act, if any
(each, an “Indemnified
Person”), against
any joint or several losses, claims, damages, liabilities or expenses
(collectively, together with actions, proceedings or inquiries by any regulatory
or self-regulatory organization, whether commenced or threatened, in respect
thereof, “Claims”)
to
which
any of them may become subject insofar as such Claims arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a material fact
in
a Registration Statement or the omission or alleged omission to state therein
a
material fact required to be stated or necessary to make the statements therein
not misleading; (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or 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 alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading; or (iii) any violation or alleged violation by the Company
of the 1933 Act, the 1934 Act, any other law, including, without limitation,
any
state securities law, or any rule or regulation thereunder relating to the
offer
or sale of the Registrable Securities (the matters in the foregoing clauses
(i)
through (iii) being, collectively, “Violations”).
Subject
to the restrictions set forth in Section 6(c) with respect to the number of
legal counsel, the Company shall reimburse the Indemnified Person, 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): (i) shall not apply to a Claim 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 any Indemnified Person or underwriter
for
such Indemnified Person expressly for use in connection with the preparation
of
such Registration Statement or any such amendment thereof or supplement thereto,
if such prospectus was timely made available by the Company pursuant to Section
3(c) hereof; (ii) shall not 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; and (iii) with respect to
any
preliminary prospectus, shall not inure to the benefit of any Indemnified Person
if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented, such corrected prospectus was timely made
available by the Company pursuant to Section 3(c) hereof, and the Indemnified
Person was promptly advised in writing not to use the incorrect prospectus
prior
to the use giving rise to a Violation and such Indemnified Person,
notwithstanding such advice, used it. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Registrable Securities
by the Investors pursuant to Section 9.
b. In
connection with any Registration Statement in which an Investor is
participating, each such Investor agrees severally and not jointly to indemnify,
hold harmless and defend, to the same extent and in the same manner set forth
in
Section 6(a), the Company, each of its directors, each of its officers who
signs
the Registration Statement, each person, if any, who controls the Company within
the meaning of the 1933 Act or the 1934 Act, any underwriter and any other
shareholder selling securities pursuant to the Registration
Statement
or any of its directors or officers or any person who controls such shareholder
or underwriter within the meaning of the 1933 Act or the 1934 Act (collectively
and together with an Indemnified Person, an “Indemnified
Party”), against
any Claim to which any of them may become subject, under the 1933 Act, the
1934
Act or otherwise, insofar as such Claim arises out of or is based upon any
Violation by such Investor, 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 to the Company by such Investor expressly for use in
connection with such Registration Statement; and subject to Section 6(c) such
Investor will reimburse any legal or other expenses (promptly as such expenses
are incurred and are due and payable) reasonably incurred by them in connection
with investigating or defending any such Claim; provided, however,
that the
indemnity agreement contained in this Section 6(b) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
prior
written consent of such Investor, which consent shall not be unreasonably
withheld; provided, further, however,
that the
Investor shall be liable under this Agreement (including this Section 6(b)
and
Section 7) for only that amount as does not exceed the net proceeds to such
Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented.
c. Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section
6
of notice of the commencement of any action (including any governmental action),
such Indemnified Person or Indemnified Party 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
or
the Indemnified Party, as the case may be; provided, however,
that an
Indemnified Person or Indemnified Party shall have the right to retain its
own
counsel with the 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 or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and
any
other party represented by such counsel in such proceeding. The indemnifying
party shall pay for only one separate legal counsel for the Indemnified Persons
or the Indemnified Parties, as applicable, and such legal counsel shall be
selected by Investors holding a majority-in-interest of the Registrable
Securities included in the Registration Statement to which the Claim relates
(with the approval of a majority-in-interest of the Initial Investors), if
the
Investors are entitled to indemnification hereunder, or the Company, if the
Company is entitled to indemnification hereunder, as applicable. 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 or Indemnified Party under this Section
6,
except to the extent
that
the
indemnifying party is actually 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 (i)
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, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall
be
entitled to contribution from any seller of Registrable Securities who was
not
guilty of such fraudulent misrepresentation, and (iii) contribution (together
with any indemnification or other obligations under this Agreement) by any
seller of Registrable Securities shall be limited in amount to the net amount
of
proceeds received by such seller from the sale of such Registrable
Securities.
8. REPORTS
UNDER THE 1934 ACT.
With
a
view to making available to the Investors the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the SEC that
may
at any time permit the investors to sell securities of the Company to the public
without registration (“Rule
144”), the
Company agrees 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 1933 Act and the 1934 Act so long as
the
Company
remains subject to such requirements and the filing of such reports and other
documents is required for the applicable provisions of Rule 144;
and
c. furnish
to each Investor so long as such 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 1933 Act and the 1934 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, and (iii) such other information
as may be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.
9.
ASSIGNMENT
OF REGISTRATION RIGHTS.
The
rights under this Agreement shall be automatically assignable by the Investors
to any transferee of all or any portion of Registrable Securities if: (i) the
Investor agrees in writing with the transferee or assignee to assign such
rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment, (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a)
the
name
and
address of such transferee or assignee, and (b) the securities with respect
to
which such registration rights are being transferred or assigned, (iii)
following such transfer or assignment, the further disposition of such
securities by the transferee or assignee is restricted under the 1933 Act and
applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence, the
transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein, (v)
such
transfer
shall
have been made in accordance with the applicable requirements of the
Subscription Agreement, and (vi) such transferee shall be an “accredited
investor” as
that
term defined in Rule 501 of Regulation D promulgated under the 1933
Act.
10. AMENDMENT
OF REGISTRATION RIGHTS.
Provisions
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
written consent of the Company, each of the Initial Investors (to the extent
such Initial Investor still owns Registrable Securities) and Investors who
hold
a majority interest of the Registrable Securities. Any amendment or waiver
effected in accordance with this Section 10 shall be binding upon each Investor
and the Company.
11. MISCELLANEOUS.
a. 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.
b. Any
notices required or permitted to be given under the terms hereof shall be sent
by certified or registered mail (return receipt requested) or delivered
personally or by courier (including a recognized overnight delivery service)
or
by facsimile and shall
be
effective five days after being placed in the mail, if mailed by regular United
States mail,
or upon
receipt, if delivered personally or by courier (including a recognized overnight
delivery service) or by facsimile, in each case addressed to a party. The
addresses for such communications shall be:
If
to the
Company:
00
Xxxxxx
Xxxxxx
Xxxxx
000
Xxxxxxx,
Xxx Xxxx 00000 Attention:
Chief Executive Officer
Telephone: (000) 000-0000 Facsimile: (000) 000-0000
With
a
copy to:
Xxxxxx
& Xxxxxx, LLP
000
Xxxxx
0, Xxxxx 000
Xxxxxxxxx,
XX 00000
Attention:
Xxxxx Xxxxxx, Esq. Telephone: (000) 000-0000 Facsimile: (000)
000-0000
If
to
an
Investor:
to the address set forth
immediately below such Investor’s name on the signature pages to the
Subscription
Agreement.
c. Failure
of any party to exercise any right or remedy under this Agreement
or otherwise, or delay by a party in exercising such right or remedy, shall
not
operate
as a
waiver thereof.
d. THIS
AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF
LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
UNITED STATES FEDERAL COURTS LOCATED NEW YORK, NEW YORK WITH RESPECT TO ANY
DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION
HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES
IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS
UPON
A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN
SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH
SUIT
OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
BY
SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT
PREVAIL IN ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR
ALL
FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY
IN CONNECTION WITH SUCH DISPUTE.
e. In
the
event that any provision of this Agreement is invalid or unenforceable under
any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof
which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.
f. This
Agreement, the Notes, the Warrants and the Subscription Agreement (including
all
schedules and exhibits thereto) constitute the entire agreement
among
the
parties hereto with respect to the subject matter hereof and thereof. There
are
no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement and the Subscription
Agreement supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
g. Subject
to the requirements of Section 9 hereof, this Agreement shall be binding upon
and inure to the benefit of the parties and their successors and
assigns.
h. The
headings in this Agreement are for convenience of reference only and shall
not
form part of, or affect the interpretation of, this Agreement.
i. 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
and shall become effective when counterparts have been signed by each party
and
delivered to the other party. This Agreement, once executed by a party, may
be
delivered to the other party hereto by facsimile transmission of a copy of
this
Agreement bearing the signature of the party so delivering this
Agreement.
j. Each
party
shall do
and perform,
or cause to be done and performed, all such further
acts
and things,
and shall
execute and deliver
all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry
out the
intent and accomplish the purposes of this Agreement and the
consummation of the transactions
contemplated hereby.
k. Except
as
otherwise provided herein, all consents and other determinations to be made
by
the Investors pursuant to this Agreement shall be made by Investors holding
a
majority of the Registrable Securities, determined as if the all of the Notes
then outstanding have been converted into for Registrable
Securities.
l. The
Company acknowledges that a breach by it of its obligations hereunder will
cause
irreparable harm to each Investor by vitiating the intent and purpose of the
transactions contemplated hereby. Accordingly, the Company acknowledges that
the
remedy at law for breach of its obligations under this Agreement will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of any of the provisions under this Agreement, that each Investor shall
be entitled, in addition to all other available remedies in law or in equity,
and in addition to the penalties assessable herein, to an injunction or
injunctions restraining, preventing or curing any breach of this Agreement
and
to enforce specifically the terms and provisions hereof, without the necessity
of showing economic loss and without any bond or other security being
required.
m. The
language
used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no
rules
of strict construction will be applied against any party.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the Company and the undersigned Initial Investors have caused
this registration Rights Agreement to be duly executed s of the date first
above
written.
COMPREHENSIVE
HEALTHCARE SOLUTIONS, INC.
By:
/s/
Xxxx Xxxxxxx
XXXX
XXXXXXX
Chief
Executive Officer
SUBSCRIBER:
NITE
CAPITAL LP
By:
/s/
Xxxxx X Xxxxxxx
Name:
Xxxxx X. Xxxxxxx
Title:
Manager of the General Partner
Address: NITE
CAPITAL, LP
000
XXXX XXXX XXXXXX, XXX 000
XXXXXXXXXXXX,
XX 00000
Telephone:
000-000-0000
Facsimile: 000-000-0000
Email:
Xxxxx@xxxxxxxxxxx.xxx
