EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
DATED APRIL 3, 2007
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of April 3, 2007, among Titanium Group Limited, a corporation
organized under the laws of the British Virgin Islands (the "Company") and the
several purchasers signatory hereto (each such purchaser, a "PURCHASER" and,
collectively, the "PURCHASERS").
This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of the date hereof, between the Company and each Purchaser
(the "PURCHASE AGREEMENT").
The Company and each Purchaser hereby agrees as follows:
1. DEFINITIONS
CAPITALIZED TERMS USED AND NOT OTHERWISE DEFINED HEREIN THAT ARE
DEFINED IN THE PURCHASE AGREEMENT SHALL HAVE THE MEANINGS GIVEN SUCH TERMS IN
THE PURCHASE AGREEMENT. As used in this Agreement, the following terms shall
have the following meanings:
"ADVICE" shall have the meaning set forth in Section 6(d).
"EFFECTIVENESS DATE" means, with respect to the Initial
Registration Statement required to be filed hereunder, the 90th
calendar day following the date hereof (or, in the event of a "full
review" by the Commission, the 120th calendar day following the date
hereof) and, with respect to any additional Registration Statements
which may be required pursuant to Section 3(c), the 60th calendar day
following the date on which an additional Registration Statement is
required to be filed hereunder; PROVIDED, HOWEVER, that in the event
the Company is notified by the Commission that one or more of the above
Registration Statements will not be reviewed or is no longer subject to
further review and comments, the Effectiveness Date as to such
Registration Statement shall be the fifth Trading Day following the
date on which the Company is so notified if such date precedes the
dates otherwise required above.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in
Section 2(a).
"EVENT" shall have the meaning set forth in Section 2(b).
"EVENT DATE" shall have the meaning set forth in Section 2(b).
"FILING DATE" means, with respect to the Initial Registration
Statement required hereunder, the 30th calendar day following the date
hereof and, with respect to any additional Registration Statements
which may be required pursuant to Section 3(c), the earliest practical
date on which the Company is permitted by SEC Guidance to file such
additional Registration Statement related to the Registrable
Securities.
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"HOLDER" or "HOLDERS" means the holder or holders, as the case
may be, from time to time of Registrable Securities.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section
5(c).
"INDEMNIFYING PARTY" shall have the meaning set forth in Section
5(c).
"INITIAL REGISTRATION STATEMENT" means the initial Registration
Statement filed pursuant to this Agreement.
"INITIAL SHARES" means a number of shares of Common Stock equal
to one-third of the number of shares of Common Stock issued and
outstanding and held by non-affiliates of the Company immediately prior
to the filing date of the Initial Registration Statement.
"LOSSES" shall have the meaning set forth in Section 5(a).
"NASD" means the National Association of Securities Dealers, Inc.
"PLAN OF DISTRIBUTION" shall have the meaning set forth in
Section 2(a).
"PROSPECTUS" means the prospectus included in a Registration
Statement (including, without limitation, a prospectus that includes
any information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by a Registration
Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.
"REGISTRABLE SECURITIES" means (i) all of the shares of Common
Stock issuable upon conversion in full of the Debentures, (ii) all
shares of Common Stock issuable as interest on the Debentures assuming
all permissible interest payments are made in shares of Common Stock
and the Debentures are held until maturity, (iii) all Placement Agent
Shares, (iv) all Warrant Shares, (v) any additional shares of Common
Stock issuable in connection with any anti-dilution provisions in the
Debentures or the Warrants (in each case, without giving effect to any
limitations on conversion set forth in the Debenture or limitations on
exercise set forth in the Warrant) and (vi) any securities issued or
issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing.
"REGISTRATION STATEMENT" means the registration statement
required to be filed hereunder and any additional registration
statements contemplated by Section 3(c), including (in each case) the
Prospectus, amendments and supplements to such registration statement
or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
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"RULE 415" means Rule 415 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended or interpreted from
time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same purpose and effect as such
Rule.
"RULE 424" means Rule 424 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended or interpreted from
time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same purpose and effect as such
Rule.
"SELLING SHAREHOLDER QUESTIONNAIRE" shall have the meaning set
forth in Section 3(a).
"SEC GUIDANCE" means (i) any publicly-available written or oral
guidance, comments, requirements or requests of the Commission staff
and (ii) the Securities Act.
2. SHELF REGISTRATION
(a) On or prior to each Filing Date, the Company shall
prepare and file with the Commission a Registration Statement covering
the resale of all or such portion of the Registrable Securities as
permitted by SEC Guidance (provided that the Company shall use diligent
efforts to advocate with the Commission for the registration of all of
the Registrable Securities in accordance with the SEC Guidance,
including without limitation, the Manual of Publicly Available
Telephone Interpretations D.29) that are not then registered on an
effective Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415. The Registration Statement shall
be on Form S-3 (except if the Company is not then eligible to register
for resale the Registrable Securities on Form S-3, in which case such
registration shall be on another appropriate form in accordance
herewith, it being understood that the initial Registration Statement
filed hereunder shall be on Form SB-2) and shall contain (unless
otherwise directed by at least an 85% majority in interest of the
Holders) substantially the "PLAN OF DISTRIBUTION" attached hereto as
ANNEX A. Subject to the terms of this Agreement, the Company shall use
its best efforts to cause a Registration Statement to be declared
effective under the Securities Act as promptly as possible after the
filing thereof, but in any event prior to the applicable Effectiveness
Date, and shall use its best efforts to keep such Registration
Statement continuously effective under the Securities Act until all
Registrable Securities covered by such Registration Statement have been
sold, or may be sold without volume restrictions pursuant to Rule
144(k), as determined by the counsel to the Company pursuant to a
written opinion letter to such effect, addressed and acceptable to the
Company's transfer agent and the affected Holders (the "EFFECTIVENESS
PERIOD"). The Company shall telephonically request effectiveness of a
Registration Statement as of 5:00 p.m. New York City time on a Trading
Day. The Company shall immediately notify the Holders via facsimile or
e-mail delivery of a ".pdf" format data file of the effectiveness of a
Registration Statement on the same Trading Day that the Company
telephonically confirms effectiveness with the Commission, which shall
be the date requested for
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effectiveness of a Registration Statement. The Company shall, by 9:30
a.m. New York City time on the Trading Day after the Effective Date (as
defined in the Purchase Agreement), file a final Prospectus with the
Commission as required by Rule 424. Failure to so notify the Holder
within 1 Trading Day of such notification of effectiveness or failure
to file a final Prospectus as foresaid shall be deemed an Event under
Section 2(b). Notwithstanding any other provision of this Agreement and
subject to the payment of liquidated damages in Section 2(b), if any
SEC Guidance sets forth a limitation of the number of Registrable
Securities permitted to be registered on a particular Registration
Statement (and notwithstanding that the Company used diligent efforts
to advocate with the Commission for the registration of all or a
greater number of Registrable Securities), unless otherwise directed in
writing by a Holder as to its Registrable Securities, the number of
Registrable Securities to be registered on such Registration Statement
will first be reduced by Registrable Securities represented by Warrant
Shares (applied, in the case that some Warrant Shares may be
registered, to the Holders on a pro rata basis based on the total
number of unregistered Warrant Shares held by such Holders), and second
by Registrable Securities represented by Conversion Shares (applied, in
the case that some Conversion Shares may be registered, to the Holders
on a pro rata basis based on the total number of unregistered
Conversion Shares held by such Holders).
(b) If: (i) the Initial Registration Statement is not filed
on or prior to its Filing Date (if the Company files the Initial
Registration Statement without affording the Holders the opportunity to
review and comment on the same as required by Section 3(a) herein, the
Company shall be deemed to have not satisfied this clause (i)), or (ii)
the Company fails to file with the Commission a request for
acceleration of a Registration Statement in accordance with Rule 461
promulgated under the Securities Act, within five Trading Days of the
date that the Company is notified (orally or in writing, whichever is
earlier) by the Commission that such Registration Statement will not be
"reviewed" or not be subject to further review, or (iii) prior to the
Effectiveness Date of a Registration Statement, the Company fails to
file a pre-effective amendment and otherwise respond in writing to
comments made by the Commission in respect of such Registration
Statement within 10 Trading Days after the receipt of comments by or
notice from the Commission that such amendment is required in order for
such Registration Statement to be declared effective, or (iv) as to, in
the aggregate among all Holders on a pro-rata basis on their purchase
of the Securities pursuant to the Purchase Agreement, a Registration
Statement registering for resale all of the Initial Shares is not
declared effective by the Commission by the Effectiveness Date of the
Initial Registration Statement, or (v) all of the Registrable
Securities are not registered for resale pursuant to one or more
effective Registration Statements on or before April 3, 2008, or (vi)
after the Effectiveness Date of a Registration Statement, such
Registration Statement ceases for any reason to remain continuously
effective as to all Registrable Securities included in such
Registration Statement, or the Holders are otherwise not permitted to
utilize the Prospectus therein to resell such Registrable Securities,
for more than 10 consecutive calendar days or more than an aggregate of
15 calendar days during any 12-month period (which need not be
consecutive calendar days) (any such failure or breach being referred
to as an "EVENT", and for purposes of clause (i), (iv) or (v) the date
on which such Event occurs, or for purposes of clause (ii) the date on
which such five Trading Day period is exceeded, or for
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purposes of clause (iii) the date which such 10 calendar day period is
exceeded, or for purposes of clause (vi) the date on which such 10 or
15 calendar day period, as applicable, is exceeded being referred to as
"EVENT DATE"), then, in addition to any other rights the Holders may
have hereunder or under applicable law, on each such Event Date and on
each monthly anniversary of each such Event Date (if the applicable
Event shall not have been cured by such date) until the applicable
Event is cured, the Company shall pay to each Holder an amount in cash,
as partial liquidated damages and not as a penalty, equal to 1% of the
aggregate purchase price paid by such Holder pursuant to the Purchase
Agreement for any unregistered Registrable Securities then held by such
Holder. The parties agree that (1) the Company shall not be liable for
liquidated damages under this Agreement with respect to any Warrants or
Warrant Shares and (2) the maximum aggregate liquidated damages payable
to a Holder under this Agreement shall be eighteen percent (18%) of the
aggregate Subscription Amount paid by such Holder pursuant to the
Purchase Agreement. If the Company fails to pay any partial liquidated
damages pursuant to this Section in full within seven days after the
date payable, the Company will pay interest thereon at a rate of 18%
per annum (or such lesser maximum amount that is permitted to be paid
by applicable law) to the Holder, accruing daily from the date such
partial liquidated damages are due until such amounts, plus all such
interest thereon, are paid in full. The partial liquidated damages
pursuant to the terms hereof shall apply on a daily PRO RATA basis for
any portion of a month prior to the cure of an Event.
3. REGISTRATION PROCEDURES.
In connection with the Company's registration obligations
hereunder, the Company shall:
(a) Not less than five Trading Days prior to the filing of
each Registration Statement and not less than one Trading Day prior to
the filing of any related Prospectus or any amendment or supplement
thereto (including any document that would be incorporated or deemed to
be incorporated therein by reference), the Company shall (i) furnish to
each Holder copies of all such documents proposed to be filed, which
documents (other than those incorporated or deemed to be incorporated
by reference) will be subject to the review of such Holders and (ii)
cause its officers and directors, counsel and independent certified
public accountants to respond to such inquiries as shall be necessary,
in the reasonable opinion of respective counsel to each Holder, to
conduct a reasonable investigation within the meaning of the Securities
Act. The Company shall not file a Registration Statement or any such
Prospectus or any amendments or supplements thereto to which the
Holders of a majority of the Registrable Securities shall reasonably
object in good faith, provided that the Company is notified of such
objection in writing no later than 5 Trading Days after the Holders
have been so furnished copies of a Registration Statement or 1 Trading
Day after the Holders have been so furnished copies of any related
Prospectus or amendments or supplements thereto. Each Holder agrees to
furnish to the Company a completed questionnaire in the form attached
to this Agreement as ANNEX B (a "SELLING SHAREHOLDER QUESTIONNAIRE")
not less than two Trading Days prior to the Filing Date or by the end
of the fourth Trading Day following the date on which such Holder
receives draft materials in accordance with this Section.
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(b) (i) Prepare and file with the Commission such
amendments, including post-effective amendments, to a Registration
Statement and the Prospectus used in connection therewith as may be
necessary to keep a Registration Statement continuously effective as to
the applicable Registrable Securities for the Effectiveness Period and
prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all
of the Registrable Securities; (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement (subject
to the terms of this Agreement), and, as so supplemented or amended, to
be filed pursuant to Rule 424; (iii) respond as promptly as reasonably
possible to any comments received from the Commission with respect to a
Registration Statement or any amendment thereto and provide as promptly
as reasonably possible to the Holders true and complete copies of all
correspondence from and to the Commission relating to a Registration
Statement (provided that the Company may excise any information
contained therein which would constitute material non-public
information as to any Holder which has not executed a confidentiality
agreement with the Company); and (iv) comply in all material respects
with the provisions of the Securities Act and the Exchange Act with
respect to the disposition of all Registrable Securities covered by a
Registration Statement during the applicable period in accordance
(subject to the terms of this Agreement) with the intended methods of
disposition by the Holders thereof set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented.
(c) If during the Effectiveness Period, the number of
Registrable Securities at any time exceeds 100% of the number of shares
of Common Stock then registered in a Registration Statement, then the
Company shall file as soon as reasonably practicable, but in any case
prior to the applicable Filing Date, an additional Registration
Statement covering the resale by the Holders of not less than the
number of such Registrable Securities.
(d) Notify the Holders of Registrable Securities to be sold
(which notice shall, pursuant to clauses (iii) through (vi) hereof, be
accompanied by an instruction to suspend the use of the Prospectus
until the requisite changes have been made) as promptly as reasonably
possible (and, in the case of (i)(A) below, not less than one Trading
Day prior to such filing) and (if requested by any such Person) confirm
such notice in writing no later than one Trading Day following the day
(i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed; (B) when
the Commission notifies the Company whether there will be a "review" of
such Registration Statement and whenever the Commission comments in
writing on such Registration Statement; and (C) with respect to a
Registration Statement or any post-effective amendment, when the same
has become effective; (ii) of any request by the Commission or any
other federal or state governmental authority for amendments or
supplements to a Registration Statement or Prospectus or for additional
information; (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending
the effectiveness of a Registration Statement covering any or all of
the Registrable Securities or the initiation of any Proceedings for
that purpose; (iv) of the receipt by the Company of any notification
with respect to the suspension of the
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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; (v) of the occurrence
of any event or passage of time that makes the financial statements
included in a Registration Statement ineligible for inclusion therein
or any statement made in a Registration Statement or Prospectus or any
document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to a
Registration Statement, Prospectus or other documents so that, in the
case of a 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 light of the circumstances under which
they were made, not misleading; and (vi) of the occurrence or existence
of any pending corporate development with respect to the Company that
the Company believes may be material and that, in the determination of
the Company, makes it not in the best interest of the Company to allow
continued availability of a Registration Statement or Prospectus,
provided that any and all of such information shall remain confidential
to each Holder until such information otherwise becomes public, unless
disclosure by a Holder is required by law; PROVIDED, further, that
notwithstanding each Holder's agreement to keep such information
confidential, each such Holder makes no acknowledgement that any such
information is material, non-public information.
(e) Use its best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order stopping or suspending
the effectiveness of a Registration Statement, or (ii) any suspension
of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.
(f) Furnish to each Holder, without charge, at least one
conformed copy of each such Registration Statement and each amendment
thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference to the
extent requested by such Person, and all exhibits to the extent
requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents
with the Commission, provided that any such item which is available on
the XXXXX system need not be furnished in physical form.
(g) Subject to the terms of this Agreement, the Company
hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with
the offering and sale of the Registrable Securities covered by such
Prospectus and any amendment or supplement thereto, except after the
giving of any notice pursuant to Section 3(d).
(h) The Company shall effect a filing with respect to the
public offering contemplated by each Registration Statement (an "ISSUER
FILING") with the Corporate Financing Department of NASD pursuant to
NASD Rule 2710(b)(10)(A)(i) within one Trading Day of the date that the
Registration Statement is first filed with the Commission and pay the
filing fee required by such Issuer Filing. The Company shall use
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commercially reasonable efforts to pursue the Issuer Filing until the
NASD issues a letter confirming that it does not object to the terms of
the offering contemplated by the Registration Statement as described in
the Plan of Distribution attached hereto as Annex A. A copy of the
Issuer Filing and all related correspondence to or from the NASD with
respect thereto shall be provided to FWS.
(i) Prior to any resale of Registrable Securities by a
Holder, use its commercially reasonable efforts to register or qualify
or cooperate with the selling Holders in connection with the
registration or qualification (or exemption from the Registration or
qualification) of such Registrable Securities for the resale by the
Holder under the securities or Blue Sky laws of such jurisdictions
within the United States as any Holder reasonably requests in writing,
to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other
acts or things reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by each
Registration Statement; provided, that the Company shall not be
required to qualify generally to do business in any jurisdiction where
it is not then so qualified, subject the Company to any material tax in
any such jurisdiction where it is not then so subject or file a general
consent to service of process in any such jurisdiction.
(j) If requested by a Holder, cooperate with such Holder to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be delivered to a transferee
pursuant to a Registration Statement, which certificates shall be free,
to the extent permitted by the Purchase Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holder may
request.
(k) Upon the occurrence of any event contemplated by Section
3(d), as promptly as reasonably possible under the circumstances taking
into account the Company's good faith assessment of any adverse
consequences to the Company and its stockholders of the premature
disclosure of such event, prepare a supplement or amendment, including
a post-effective amendment, to a Registration Statement or a supplement
to the related Prospectus or any document incorporated or deemed to be
incorporated therein by reference, and file any other required document
so that, as thereafter delivered, neither a Registration Statement nor
such Prospectus will contain an 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 light of the circumstances
under which they were made, not misleading. If the Company notifies the
Holders in accordance with clauses (iii) through (vi) of Section 3(d)
above to suspend the use of any Prospectus until the requisite changes
to such Prospectus have been made, then the Holders shall suspend use
of such Prospectus. The Company will use its best efforts to ensure
that the use of the Prospectus may be resumed as promptly as is
practicable. The Company shall be entitled to exercise its right under
this Section 3(k) to suspend the availability of a Registration
Statement and Prospectus, subject to the payment of partial liquidated
damages otherwise required pursuant to Section 2(b), for a period not
to exceed 60 calendar days (which need not be consecutive days) in any
12 month period.
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(l) Comply with all applicable rules and regulations of the
Commission.
(m) The Company may require each selling Holder to furnish
to the Company a certified statement as to the number of shares of
Common Stock beneficially owned by such Holder and, if required by the
Commission, the natural persons thereof that have voting and
dispositive control over the shares. During any periods that the
Company is unable to meet its obligations hereunder with respect to the
registration of the Registrable Securities solely because any Holder
fails to furnish such information within three Trading Days of the
Company's request, any liquidated damages that are accruing at such
time as to such Holder only shall be tolled and any Event that may
otherwise occur solely because of such delay shall be suspended as to
such Holder only, until such information is delivered to the Company.
4. REGISTRATION EXPENSES. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses of the Company's counsel and
auditors) (A) with respect to filings made with the Commission, (B) with respect
to filings required to be made with any Trading Market on which the Common Stock
is then listed for trading, (C) in compliance with applicable state securities
or Blue Sky laws reasonably agreed to by the Company in writing (including,
without limitation, fees and disbursements of counsel for the Company in
connection with Blue Sky qualifications or exemptions of the Registrable
Securities) and (D) if not previously paid by the Company in connection with an
Issuer Filing, with respect to any filing that may be required to be made by any
broker through which a Holder intends to make sales of Registrable Securities
with NASD pursuant to NASD Rule 2710, so long as the broker is receiving no more
than a customary brokerage commission in connection with such sale, (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company, (v)
Securities Act liability insurance, if the Company so desires such insurance,
and (vi) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this
Agreement. In addition, the Company shall be responsible for all of its internal
expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit and the fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange as
required hereunder. In no event shall the Company be responsible for any broker
or similar commissions of any Holder or, except to the extent provided for in
the Transaction Documents, any legal fees or other costs of the Holders.
5. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder, the
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officers, directors, members, partners, agents, brokers (including
brokers who offer and sell Registrable Securities as principal as a
result of a pledge or any failure to perform under a margin call of
Common Stock), investment advisors and employees (and any other Persons
with a functionally equivalent role of a Person holding such titles,
notwithstanding a lack of such title or any other title) of each of
them, each Person who controls any such Holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and
the officers, directors, members, shareholders, partners, agents and
employees (and any other Persons with a functionally equivalent role of
a Person holding such titles, notwithstanding a lack of such title or
any other title) of each such controlling Person, to the fullest extent
permitted by applicable law, from and against any and all losses,
claims, damages, liabilities, costs (including, without limitation,
reasonable attorneys' fees) and expenses (collectively, "LOSSES"), as
incurred, arising out of or relating to (1) any untrue or alleged
untrue statement of a material fact contained in a Registration
Statement, any Prospectus or any form of prospectus or in any amendment
or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or supplement thereto, in light
of the circumstances under which they were made) not misleading or (2)
any violation or alleged violation by the Company of the Securities
Act, the Exchange Act or any state securities law, or any rule or
regulation thereunder, in connection with the performance of its
obligations under this Agreement, except to the extent, but only to the
extent, that (i) such untrue statements or omissions are based solely
upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that
such information relates to such Holder or such Holder's proposed
method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use in a
Registration Statement, such Prospectus or such form of Prospectus or
in any amendment or supplement thereto (it being understood that the
Holder has approved Annex A hereto for this purpose) or (ii) in the
case of an occurrence of an event of the type specified in Section
3(d)(iii)-(vi), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that
the Prospectus is outdated or defective and prior to the receipt by
such Holder of the Advice contemplated in Section 6(d). The Company
shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding arising from or in connection with the
transactions contemplated by this Agreement of which the Company is
aware.
(b) INDEMNIFICATION BY HOLDERS. Each Holder shall, severally
and not jointly, indemnify and hold harmless the Company, its
directors, officers, agents and employees, each Person who controls the
Company (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted
by applicable law, from and against all Losses, as incurred, to the
extent arising out of or based solely upon: (x) such Holder's failure
to comply with the prospectus delivery requirements of the Securities
Act or (y) any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, any Prospectus, or in any
amendment or supplement thereto or in any preliminary prospectus, or
arising out of or relating to any omission or alleged
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omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading (i) to the extent, but
only to the extent, that such untrue statement or omission is contained
in any information so furnished in writing by such Holder to the
Company specifically for inclusion in such Registration Statement or
such Prospectus or (ii) to the extent that such information relates to
such Holder's proposed method of distribution of Registrable Securities
and was reviewed and expressly approved in writing by such Holder
expressly for use in a Registration Statement (it being understood that
the Holder has approved Annex A hereto for this purpose), such
Prospectus or in any amendment or supplement thereto or (ii) in the
case of an occurrence of an event of the type specified in Section
3(d)(iii)-(vi), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that
the Prospectus is outdated or defective and prior to the receipt by
such Holder of the Advice contemplated in Section 6(d). In no event
shall the liability of any selling Holder hereunder be greater in
amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity
hereunder (an "INDEMNIFIED PARTY"), such Indemnified Party shall
promptly notify the Person from whom indemnity is sought (the
"INDEMNIFYING PARTY") in writing, and the Indemnifying Party shall have
the right to assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations
or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further
review) that such failure shall have prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ
separate counsel in any such Proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party or Parties unless: (1) the
Indemnifying Party has agreed in writing to pay such fees and expenses;
(2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named parties to any such Proceeding (including any impleaded
parties) include both such Indemnified Party and the Indemnifying
Party, and counsel to the Indemnified Party shall reasonably believe
that a material conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel
at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense thereof and the reasonable
fees and expenses of no more than one separate counsel shall be at the
expense of the Indemnifying Party). The Indemnifying Party shall not be
liable for any settlement of any such Proceeding effected without its
written consent, which consent shall not be unreasonably withheld or
delayed. No Indemnifying Party shall,
11
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on
claims that are the subject matter of such Proceeding.
Subject to the terms of this Agreement, all reasonable
fees and expenses of the Indemnified Party (including reasonable fees
and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with
this Section) shall be paid to the Indemnified Party, as incurred,
within ten Trading Days of written notice thereof to the Indemnifying
Party; provided, that the Indemnified Party shall promptly reimburse
the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is
judicially determined to be not entitled to indemnification hereunder.
(d) CONTRIBUTION. If the indemnification under Section 5(a)
or 5(b) is unavailable to an Indemnified Party or insufficient to hold
an Indemnified Party harmless for any Losses, then each Indemnifying
Party shall contribute to the amount paid or payable by such
Indemnified Party, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in
connection with the actions, statements or omissions that resulted in
such Losses as well as any other relevant equitable considerations. The
relative fault of such Indemnifying Party and Indemnified Party shall
be determined by reference to, among other things, whether any action
in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has
been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such action, statement or omission. The amount paid or payable
by a party as a result of any Losses shall be deemed to include,
subject to the limitations set forth in this Agreement, any reasonable
attorneys' or other fees or expenses incurred by such party in
connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided
for in this Section was available to such party in accordance with its
terms.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined
by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section 5(d), no Holder shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the net proceeds
actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages
that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
The indemnity and contribution agreements contained in
this Section are in addition to any liability that the Indemnifying
Parties may have to the Indemnified Parties.
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6. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company or by
a Holder of any of their respective obligations under this Agreement, each
Holder or the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law and under this Agreement, including recovery
of damages, shall be entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages would not
provide adequate compensation for any losses incurred by reason of a breach by
it of any of the provisions of this Agreement and hereby further agrees that, in
the event of any action for specific performance in respect of such breach, it
shall not assert or shall waive the defense that a remedy at law would be
adequate.
(b) NO PIGGYBACK ON REGISTRATIONS. Except as set forth on
SCHEDULE 6(B) attached hereto and in connection with transactions contemplated
by clause (f) under Exempt Issuance, neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include
securities of the Company in any Registration Statements other than the
Registrable Securities. The Company shall not file any other registration
statements until all Registrable Securities are registered pursuant to a
Registration Statement that is declared effective by the Commission, provided
that this Section 6(b) shall not prohibit the Company from filing amendments to
registration statements filed prior to the date of this Agreement.
(c) COMPLIANCE. Each Holder covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
a Registration Statement.
(d) DISCONTINUED DISPOSITION. By its acquisition of
Registrable Securities, each Holder agrees that, upon receipt of a notice from
the Company of the occurrence of any event of the kind described in Section
3(d)(iii) through (vi), such Holder will forthwith discontinue disposition of
such Registrable Securities under a Registration Statement until it is advised
in writing (the "ADVICE") by the Company that the use of the applicable
Prospectus (as it may have been supplemented or amended) may be resumed. The
Company will use its best efforts to ensure that the use of the Prospectus may
be resumed as promptly as it practicable. The Company agrees and acknowledges
that any periods during which the Holder is required to discontinue the
disposition of the Registrable Securities hereunder shall be subject to the
provisions of Section 2(b).
(e) PIGGY-BACK REGISTRATIONS. If at any time during the
Effectiveness Period there is not an effective Registration Statement covering
all of the Registrable Securities and the Company shall determine to prepare and
file with the Commission a registration statement relating to an offering for
its own account or the account of others under the Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) 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 the Company's stock option or
other employee benefit plans, then the Company shall send to each Holder a
written notice of such determination and, if within fifteen days after
13
the date of such notice, any such Holder shall so request in writing, the
Company shall include in such registration statement all or any part of such
Registrable Securities such Holder requests to be registered; PROVIDED, HOWEVER,
that the Company shall not be required to register any Registrable Securities
pursuant to this Section 6(e) that are eligible for resale pursuant to Rule
144(k) promulgated under the Securities Act or that are the subject of a then
effective Registration Statement.
(f) AMENDMENTS AND WAIVERS. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and the Holders of a majority of the then outstanding
Registrable Securities (including, for this purpose, any Registrable Securities
issuable upon exercise or conversion of any Security). If a Registration
Statement does not register all of the Registrable Securities pursuant to a
waiver or amendment done in compliance with the previous sentence, then the
number of Registrable Securities to be registered for each Holder shall be
reduced pro rata among all Holders and each Holder shall have the right to
designate which of its Registrable Securities shall be omitted from such
Registration Statement. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of some Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of all of
the Registrable Securities to which such waiver or consent relates; PROVIDED,
HOWEVER, that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the first sentence of
this Section 6(f).
(g) NOTICES. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be delivered as
set forth in the Purchase Agreement.
(h) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Company may not
assign (except by merger) its rights or obligations hereunder without the prior
written consent of all of the Holders of the then-outstanding Registrable
Securities. Each Holder may assign their respective rights hereunder in the
manner and to the Persons as permitted under the Purchase Agreement.
(i) NO INCONSISTENT AGREEMENTS. Neither the Company nor any
of its Subsidiaries has entered, as of the date hereof, nor shall the Company or
any of its Subsidiaries, on or after the date of this Agreement, enter into any
agreement with respect to its securities, that would have the effect of
impairing the rights granted to the Holders in this Agreement or otherwise
conflicts with the provisions hereof. Except as set forth on SCHEDULE 6(i),
neither the Company nor any of its subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its securities
to any Person that have not been satisfied in full.
(j) EXECUTION AND COUNTERPARTS. This Agreement may be
executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same counterpart. In the
14
event that any signature is delivered by facsimile transmission or by e-mail
delivery of a ".pdf" format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or ".pdf"
signature page were an original thereof.
(k) GOVERNING LAW. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement.
(l) CUMULATIVE REMEDIES. The remedies provided herein are
cumulative and not exclusive of any other remedies provided by law.
(m) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
(n) HEADINGS. The headings in this Agreement are for
convenience only, do not constitute a part of the Agreement and shall not be
deemed to limit or affect any of the provisions hereof.
(o) INDEPENDENT NATURE OF HOLDERS' OBLIGATIONS AND RIGHTS.
The obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible in
any way for the performance of the obligations of any other Holder hereunder.
Nothing contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto, shall be
deemed to constitute the Holders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Holders
are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Holder shall be entitled to
protect and enforce its rights, including without limitation the rights arising
out of this Agreement, and it shall not be necessary for any other Holder to be
joined as an additional party in any proceeding for such purpose.
********************
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IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.
TITANIUM GROUP LIMITED
By: /s/ XXXXX XX
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Name: XXXXX XX
Title: CEO
[SIGNATURE PAGE OF HOLDERS FOLLOWS]
[SIGNATURE PAGE OF HOLDERS TO TTNUF RRA]
Name of Holder: CRESCENT INTERNATIONAL LTD
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SIGNATURE OF AUTHORIZED SIGNATORY OF HOLDER: /S/ MAXI BREZZI
/S/ XXXXXX XXXXX-XXXXXXXX
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Name of Authorized Signatory: MAXI BREZZI XXXXXX XXXXX-XXXXXXXX
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Title of Authorized Signatory: AUTHORIZED SIGNATORIES
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[SIGNATURE PAGES CONTINUE]
[SIGNATURE PAGE OF HOLDERS TO TTNUF RRA]
Name of Holder: CHESTNUT RIDGE PARTNERS, LP
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SIGNATURE OF AUTHORIZED SIGNATORY OF HOLDER: /S/ XXXXXXX XXXX
----------------------------------
Name of Authorized Signatory: XXXXXXX XXXX
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Title of Authorized Signatory: CHIEF FINANCIAL OFFICER
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[SIGNATURE PAGES CONTINUE]
[SIGNATURE PAGE OF HOLDERS TO TTNUF RRA]
Name of Holder: WHALEHAVEN CAPITAL FUND LIMITED
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SIGNATURE OF AUTHORIZED SIGNATORY OF HOLDER: /S/ XXXX XXXXXXXXXXX
----------------------------------
Name of Authorized Signatory: XXXX XXXXXXXXXXX
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Title of Authorized Signatory: CFO
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[SIGNATURE PAGES CONTINUE]