Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of __________, 2000, among
IMAGE TECHNOLOGY LABORATORIES, INC., a corporation organized under the laws of
Delaware (the "Company"), and ____________________, individually as a purchaser
of the Units offered by the Company (collectively referred to hereafter with all
other purchasers of the Units offered by the Company as the "Investors").
W I T N E S S E T H:
WHEREAS, on the date hereof, the Investors have been issued certain
Registrable Securities (as defined herein) in connection with a private offering
by the Company of units (the "Units") consisting of 1 share of the Company's
common stock, par value $.01 per share (the "Common Stock"), and a warrant to
purchase 1 share of Common Stock (the "Investor Warrant"); and
WHEREAS, as a condition to the issuance of the Registrable Securities
to the Investors, the Company has agreed to provide certain registration rights
pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Definitions. For purposes of this Agreement, capitalized terms used
herein shall have the meanings set forth in the preambles hereto and in this
Section 1.
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.
"Existing Stockholders" shall mean any stockholder of the
Company as of the date hereof.
"Form SB-2" means such form under the Securities Act as in
effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the Commission which permits inclusion or incorporation
of substantial information by reference to other documents filed by the Company
with the Commission.
"Holder" shall mean any holder of Registrable Securities;
provided, however, that any Person who acquires any of the Registrable
Securities in a distribution pursuant to a registration statement filed by the
Company under the Securities Act or pursuant to a sale under Rule 144 under the
Securities Act shall not be considered a Holder.
"Initiating Holders" shall mean Holders representing (on a
fully diluted basis) at least twenty percent (20%) of the total number of
Registrable Securities.
"Other Stockholders" shall mean any Person other than Holders
or Existing Stockholders, who by virtue of agreements with the Company, are
entitled to include their securities in any registration of the Company.
"Person" shall mean any individual, firm, corporation,
partnership, limited liability company, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind.
"Register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement with the
Commission in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such registration statement by the Commission.
"Registrable Securities" shall mean (i) the shares of Common
Stock included in the Units, and (ii) the Investor Warrant Shares (as defined
hereafter); provided, however, that such shares shall only be treated as
Registrable Securities hereunder if and so long as they have not been sold
pursuant to a registration statement under the Securities Act or those shares
shall not have been sold pursuant to Rule 144 under the Securities Act or any
similar or successor rule and provided, further, that the Company shall not be
required to register the Investor Warrants. Registrable Securities shall not
include any of the foregoing securities held by any Holder who is not an
affilitate of the Company within the meanong of Rule 144 under the Securities
Act and that may be sold pursuant to Rule 144(k) under the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.
"Investor Warrant Shares" shall mean all share of Common Stock
issuable upon exercise of the Investor Warrants.
2. Piggyback Registration.
(i) If the Company shall determine to register under the
Securities Act its equity securities or securities convertible into equity
securities either for its own account or the account of a security holder or
holders exercising any demand registration rights, a registration relating
solely to employee benefit plans, or a registration relating solely to a
Commission Rule 145 transaction (each a "Piggyback Registration"), the Company
will:
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(a) promptly but in any event no later than 30 days
prior to the anticipated filing date of the Piggyback Registration give
to each Holder written notice thereof (which shall include a list of
the jurisdictions in which the Company intends to attempt to qualify
such securities under the applicable blue sky or other state securities
laws); and
(b) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified
in a written request or requests, made by any Holder within thirty (30)
days after receipt of the written notice from the Company described in
clause (a) above, except as set forth in Section 2(ii) below. Such
written request may specify all or a part of a Holder's Registrable
Securities.
(ii) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 2(i)(a). The right of any Holder to registration pursuant to
this Section 2 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Company and
any Existing Stockholders and Other Stockholders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected by the
Company.
(iii) Limitation on Shares to be Included. Notwithstanding any
other provision of this Section 2, if the representative of the underwriters
advises the Company in writing that marketing factors require a limitation on
the number of shares to be underwritten, the representative may (subject to the
allocation priority set forth below) limit the number of Registrable Securities
to be included in the registration and underwriting. The Company shall so advise
all Holders of securities requesting registration, and the number of shares of
securities that are entitled to be included in the registration and underwriting
shall be allocated as follows:
(a) first, among the Company and the Holders pro rata
based upon the number of shares of securities requested by the Company
and the Holders to be included in such registration and second, among
all Existing Stockholders and Other Stockholders in proportion to the
number of additional shares of equity securities of the Company (the
"Additional Shares") requested to be included in such registration.
(b) if such registration is initiated by any Existing
Stockholders, then the number of shares that may be included in the
registration statement and underwriting shall be allocated first, to
the Existing Stockholders exercising demand registration rights and the
Holders, pro rata based upon the number of shares of Registrable
Securities and Additional Shares requested to be included in such
registration, and second, among all Other Stockholders in proportion to
the number of Additional Shares requested to be included in such
registration;
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(c) if such registration is initiated by Other
Stockholders exercising demand registration rights, then the number of
shares that may be included in the registration statement and
underwriting shall be allocated first to the Other Stockholders
exercising demand registration rights, second, among all Holders of
Registrable Securities and the Company for securities being sold for
its own account, pro rata based upon the number of shares of securities
requested by the Company and the Holders to be included in such
registration, and third, among all Existing Stockholders and Other
Stockholders not exercising demand registration rights in proportion to
the respective amounts of Additional Shares which they had requested to
be included in such registration at the time of filing the registration
statement; and
(d) Withdrawal from Registration. If any Holder of
Registrable Securities, Existing Stockholder or any Other Stockholder
disapproves of the terms of any such underwriting, such Holder,
Existing Stockholder or Other Stockholder may elect to withdraw
therefrom by written notice to the Company and the underwriter. Any
Registrable Securities or other securities excluded or withdrawn from
such underwriting shall also be withdrawn from such registration. The
Company shall have the right to terminate or withdraw any registration
initiated by it under this Section 2 prior to the effectiveness of such
registration whether or not any Holder has elected to include
securities in such registration.
3. Registration on Form SB-2.
If the Company becomes and continues to be eligible to use
Form SB-2 under the Securities Act or a comparable successor form, in addition
to their rights under Section 2 hereof, the Initiating Holders shall have the
right to request and have effected registrations of shares of Registrable
Securities on Form SB-2 or such successor form for a public offering of shares
of Registrable Securities (such requests shall be in writing and shall state the
number of shares of Registrable Securities to be disposed of and the intended
method of disposition of such shares by such Holders). The Company shall give
notice to all Holders of Registrable Securities of the receipt of a request for
registration pursuant to this Section 3 in the manner provided in Section 2.
Subject to the foregoing, the Company will use its commercially reasonable best
efforts to effect promptly the registration of all shares of Registrable
Securities on Form SB-2 or such successor form to the extent requested by the
Initiating Holders thereof.
4. Expenses of Registration.
All Registration Expenses (as defined below) incurred in
connection with any registration, qualification or compliance pursuant to
Section 2 or 3 shall be borne by the Company, except that Selling Expenses (as
defined below) shall be borne pro rata by each Holder in accordance with the
number of shares sold. "Selling Expenses" shall mean all underwriting discounts
and commissions applicable to the sale of Registrable Securities. "Registration
Expenses" shall mean all expenses (other than Selling Expenses) incurred by the
Company in compliance herewith, including, without limitation, all registration
and filing fees, qualification fees, fees and expenses of compliance with
federal and state securities or blue sky laws, printing expenses, messenger,
telephone, facsimile and delivery expenses, fees and disbursements of counsel
and accountants for the Company, and, in
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connection with a registration pursuant to Section 3 hereof, the reasonable fees
and expenses (subject to documentation thereof) of one counsel for all holders,
and the expense of any special audits or so-called "comfort letters" incident to
or required by any such registration and all other Persons retained by the
Company.
5. Registration Procedures.
In the case of each registration effected by the Company
pursuant to Section 2 or 3, the Company will keep each Holder advised in writing
as to the initiation of each registration and as to the completion thereof and
will, at its expense:
(i) use its commercially reasonable best efforts to keep such
registration effective for a period of one hundred-eighty (180) days or
until the Holder or Holders have completed the distribution described
in the registration statement relating thereto, whichever first occurs;
provided, however, that the Company shall keep such registration
statement effective longer than one hundred-eighty (180) days if the
cost and expenses associated with such extended registration are borne
by the selling Holder; and; provided, further, however, that in the
case of any registration of Registrable Securities on Form SB-2 which
are intended to be offered on a continuous or delayed basis, such
180-day period shall, at the cost and expense of the Company, be
extended, if necessary, to keep the registration statement effective
until the earlier of three hundred sixty-five (365) days and such time
as all such Registrable Securities are sold, provided that Rule 415, or
any successor rule under the Securities Act, permits an offering on a
continuous or delayed basis, and provided, further, that applicable
rules and regulations under the Securities Act governing the obligation
to file a post-effective amendment permit, in lieu of filing a
post-effective amendment which (x) includes any prospectus required by
Section 10(a)(3) of the Securities Act or (y) reflects facts or events
representing a material or fundamental change in the information set
forth in the registration statement, the incorporation by reference of
information otherwise required to be included in such post-effective
amendment covered by (x) and (y) above to be contained in periodic
reports filed pursuant to Section 13 or 15(d) of the Exchange Act in
the registration statement;
(ii) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary or
advisable to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
registration statement or as may be necessary to keep such registration
statement effective and current;
(iii) Furnish such number of registration statements,
prospectuses and other documents incident thereto, including any
amendment of or supplement to the prospectus, and such other documents
as a Holder from time to time may reasonably request;
(iv) Notify each seller of Registrable Securities covered by
such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the
happening of any event known by the Company as a result of which the
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prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing, and at the request of any such seller,
prepare and furnish to such seller a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such shares, such
prospectus shall not include 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 not misleading or incomplete
in the light of the circumstances then existing;
(v) Use its best efforts (i) to register or qualify all
Registrable Securities and other securities covered by such
registration statement under such other securities or blue sky laws of
such states of the United States of America where an exemption is not
available and as the sellers (or the managing underwriter, in the case
of any underwritten offering) of Registrable Securities covered by such
registration statement shall reasonably request, (ii) to keep such
registration or qualification in effect for so long as such
registration statement remains in effect and (iii) to take any other
action which may be reasonably necessary or advisable to enable such
sellers to consummate the disposition in such jurisdictions of the
securities to be sold by such sellers, except that the Company shall
not for any such purpose be required to (x) qualify generally to do
business as a foreign corporation in any jurisdiction wherein it would
not but for the requirements of this clause (v) be obligated to be so
qualified or (y) subject itself to taxation in any such jurisdiction
where the Company is not already subject to taxation;
(vi) Use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the
Company and counsel to the seller or sellers of Registrable Securities
to enable the seller or sellers thereof to consummate the disposition
of such Registrable Securities;
(vii) List all such Registrable Securities registered in such
registration on each securities exchange or automated quotation system
on which the Common Stock of the Company is then listed;
(viii) Provide a transfer agent and registrar for all
Registrable Securities and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such
registration;
(ix) Make available for inspection by any seller of
Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement, and any attorney
or accountant retained by any such seller or underwriter, all financial
and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers and directors to supply all
information reasonably requested by any such seller, underwriter,
attorney or accountant in connection with such registration statement,
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which information shall be subject to reasonable restrictions
concerning confidentiality and non-disclosure;
(x) Furnish to each selling Holder upon request a signed
counterpart, addressed to the selling Holder, of
(a) an opinion of counsel for the Company,
dated the effective date of the registration
statement in form reasonably acceptable to the
Company and such counsel, and
(b) "comfort" letters signed by the
Company's independent public accountants who have
examined, reported on and certified the Company's
financial statements included in the registration
statement, to the extent permitted by the standards
of the American Institute of Certified Public
Accountants,
in the case of (a) and (b) covering substantially the same matters with
respect to the registration statement (and the prospectus included
therein) and (in the case of the accountants' "comfort" letters) with
respect to events subsequent to the date of the financial statements,
as are customarily covered in opinions of issuer's counsel and in
accountants' "comfort" letters delivered to the underwriters in
underwritten public offerings of securities;
(xi) Furnish to each selling Holder upon request a copy of all
documents filed with and all correspondence from or to the Commission
in connection with any such offering; and
(xii) Make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months, beginning no
later than the third month after the effective date of the Registration
Statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act.
6. Indemnification.
(i) To the full extent permitted by law, the Company will
indemnify and hold harmless each Holder, each of its officers, directors,
employees and partners, and each person controlling such Holder, with respect to
which registration, qualification or compliance has been effected pursuant to
this Agreement, and each underwriter, if any, and each person who controls any
underwriter, against any and all claims, losses, damages, expenses and
liabilities (or actions, proceedings or settlements in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or any document
filed pursuant to state securities laws or other document (including any related
registration statement, any exhibit thereto or document incorporated by
reference therein, notification or the like) or any amendment or supplement
thereto incident to any such registration, qualification or compliance, or based
on any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or any violation by
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the Company of the Securities Act or the or any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and the Company will reimburse each such Holder, each of its officers, directors
and partners, and each person controlling such Holder, each such underwriter and
each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating and defending or
settling any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission made in reliance upon and based upon written information
furnished to the Company by such Holder or underwriter and expressly stated to
be specifically for use therein.
(ii) Each Holder will, if Registrable Securities held by him
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and each underwriter, if any, of the Company's securities covered by
such registration statement, each person who controls the Company (other than
such Holder) or such underwriter within the meaning of the Securities Act and
the rules and regulations thereunder, each other such Holder and each of their
officers, directors and partners, and each person controlling such Holder or
other stockholder, against all claims, losses, damages, expenses and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation by the Holder of the Securities Act, or any rule or regulation
thereunder applicable to the Holder and relating to action or inaction required
of the Holder in connection with any such registration, qualification or
compliance, and will reimburse the Company, each of its directors and officers,
each underwriter or control person, each other Holder and each of their
officers, directors and partners and each person controlling such Holder or
other stockholder for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company or the underwriter by such Holder and stated to be
specifically for use therein; provided that each Holder's liability hereunder
with respect to any particular registration shall be limited to an amount equal
to the proceeds received by such Holder in such registration. The Company and
Holder shall be entitled to receive indemnities from underwriters participating
in any distribution of Registrable Securities to the same extent as provided
above with respect to information so furnished in writing by such underwriters
expressly for use in any prospectus or registration statement.
(iii) Each party entitled to indemnification under this
Section 6 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party (at its expense) to assume the
defense of any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or any litigation resulting therefrom, shall be approved by the
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Indemnified Party (whose approval shall not unreasonably be withheld), and the
Indemnified Party may participate in such defense at the Indemnified Party's
sole expense, and provided further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Agreement unless such failure is prejudicial to the
ability of the Indemnifying Party to defend such claim or action.
Notwithstanding the foregoing, such Indemnified Party shall have the right to
employ its own counsel in any such litigation, proceeding or other action if (i)
the employment of such counsel has been authorized by the Indemnifying Party, in
its sole and absolute discretion, or (ii) the named parties in any such claims
(including any impleaded parties) include any such Indemnified Party and the
Indemnified Party and the Indemnifying Party shall have been advised in writing
(in suitable detail) by counsel to the Indemnified Party either (A) that there
may be one or more legal defenses available to such Indemnified Party which are
different from or additional to those available to the Indemnifying Party, or
(B) that there is a conflict of interest by virtue of the Indemnified Party and
the Indemnifying Parties having common counsel, in any of which events, the
reasonable legal fees and expenses of a single counsel for all Indemnified
Parties with respect to each such claim, defense thereof, or counterclaims
thereto shall be borne by Indemnifying Party. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a full, irrevocable and
unconditional release from all liability in respect to such claim or litigation.
The Indemnifying Party shall not be liable for any settlement of any such action
or proceeding effected without its prior written consent. Each Indemnified Party
shall cooperate to the extent reasonably required and furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.
(iv) Contribution. If the indemnification provided for in this
Agreement shall for any reason be held by a court to be unavailable to an
Indemnified Party under Section 6(i) or Section 6(ii) hereof in respect of any
loss, claim, damage, expense or liability, or any action in respect thereof,
then, in lieu of the amount paid or payable under Section 6(i) or Section 6(ii),
the Indemnified Party and the Indemnifying Party under Section 6(i) or Section
6(ii) shall contribute to the aggregate losses, claims, damages, expenses and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating the same), (a) in such proportion as is appropriate to
reflect the relative fault of the Indemnified Party and Indemnifying Party
covered by the registration statement which resulted in such loss, claim,
damage, expense or liability, or action or proceeding in respect thereof, with
respect to the statements or omissions which resulted in such loss, claim,
damage, expense or liability, or action or proceeding in respect thereof, as
well as any other relevant equitable considerations or (b) if the allocation
provided by clause (a) above is not permitted by applicable law, in such
proportion as shall be appropriate to reflect the relative benefits received by
the Indemnified Party and Indemnifying Party from the offering of the securities
covered by such registration statement; provided, that for purposes of this
clause (b), the relative benefits received by the prospective sellers shall be
deemed not to exceed the amount of proceeds received by such prospective
sellers. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. Such prospective
sellers' obligations to contribute as
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provided in this Section 6(iv) are several in proportion to the relative value
of their respective Registrable Securities covered by such registration
statement and not joint. In addition, no person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim
effected without such person's consent, which consent shall not be unreasonably
withheld.
7. Information by Holder. Each Holder of Registrable Securities shall
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement.
8. Transfer or Assignment of Registration Rights. The rights to cause
the Company to register securities granted to a Holder by the Company under this
Agreement may be transferred or assigned by a Holder to a transferee or assignee
of any Registrable Securities, provided that the Company is given written notice
at or prior to the time of said transfer or assignment, stating the name and
address of said transferee or assignee and identifying the securities with
respect to which such registration rights are being transferred or assigned, and
provided further that the transferee or assignee of such rights assumes in
writing the obligations of a Holder under this Section 15 to the Company and
other Holders in effect at the time of transfer under all effective agreements.
9. Exercise of Warrants.
(i) Notwithstanding anything in this Agreement to the contrary, no
Holder shall be required to exercise any Investor Warran prior
to the closing date of a registration in order for the
Investor Warrant Shares to be included in such registration.
(ii) The Company agrees to make promptly upon request, and at its
expense, such state "blue sky" filings as it deems necessary
or appropriate to effectuate the exercise of any Investor
Warrants. No exercise shall be effectuate until the necessary
"blue sky" filings have been made; provided, however, that no
Holder of any Investor Warrants shall be deprived of any of
its rights under this Agreement due to the Company's failure
to timely make its "blue sky" filings and such Holders' rights
to participate in any registration under this Agreement shall
be deemed to be perfected from the date such Holder notifies
the Company of its intention to exercise all or a portion of
its Warrants and to participate in such registration.
10. Holdback. Each Holder agrees not to effect any public sale or
distribution of Registrable Securities, including a sale pursuant to Rule 144 or
Rule 144A, during the 10 days prior to, and, beginning on the effective date of
a registration statement.
11. Amended or Supplemented Prospectus. Each Holder agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 5(iv) hereof, such Holder immediately will discontinue
disposition of any shares of Common Stock pursuant to the registration statement
covering such shares until such selling Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 5(iv) hereof, and, if
so directed by the Company, such selling Holder will deliver to the Company all
copies, other than
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permanent file copies then in such selling Holder's possession, all prospectuses
covering such shares at the time of receipt of such notice, and shall not effect
any transaction with respect to any shares except pursuant to the supplemented
or amended prospectus.
12. No Conflict of Rights. (i) The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent with the
rights (including, but not limited to, priority rights) granted to the Holders
in this Agreement. Without limiting the generality of the foregoing, the Company
will not hereafter enter into any agreement with respect to its securities which
grants or modifies any existing agreement with respect to its securities to
grant to the holder of its securities in connection with an incidental
registration of such securities equal or higher priority to the rights granted
to the Holders under Sections 2 and 3; (ii) In addition, the Company hereby
covenants and agrees to cause all of its stockholders to which it grants
registration rights after the date hereof to acknowledge in writing the
priorities and limitations of inclusion of securities set forth in this
Agreement.
13. Failure to Comply with Registration. In the event that the Company
fails to comply with any provision of Section 2 or 3 hereof, Holders of a
majority of the Units may elect to cause the Company to use its best efforts to
have nominated and elected to the board of directors of the Company such number
of designees of the Holders of a majority of the Units as shall constitute a
majority of the member of the Company's board of directors.
14. Benefits of Agreement; Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns, legal representatives and heirs. This
Agreement does not create, and shall not be construed as creating any rights
enforceable by any other Person.
15. Complete Agreement. This Agreement constitutes the complete
understanding among the parties with respect to its subject matter and
supersedes all existing agreements and understandings, whether oral or written,
among them. No alteration or modification of any provisions of this Agreement
shall be valid unless made in writing and signed, on the one hand, by the
Holders of a majority of the Registrable Securities then outstanding and, on the
other, by the Company.
16. Section Headings. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
17. Notices. (a) All notices, offers, acceptances and other
communications required or permitted to be given or to otherwise be made to any
party to this Agreement shall be deemed to be sufficient if contained in a
written instrument delivered by hand, first class mail (registered or certified,
return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, if to the Company, at 000 Xxxxxxx Xxxxx,
Xxxxxxxx, Xxx Xxxx 00000, Attention: Chief Executive Officer, and if to any
Holder, at the address of such Holder as set forth in the stock transfer books
of the Corporation.
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(b) All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if personally delivered;
five business days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt acknowledged, if
telecopied; and the next business day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery. Any party may
change the address to which each such notice or communication shall be sent by
giving written notice to the other parties of such new address in the manner
provided herein for giving notice.
18. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York without
giving effect to the provisions, policies or principles thereof respecting
conflict or choice of laws.
19. Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original but all of which taken
together shall constitute one and the same agreement.
20. Severability. Any provision of this Agreement which is determined
to be illegal, prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such illegality, prohibition or
unenforceability without invalidating the remaining provisions hereof which
shall be severable and enforceable according to their terms and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
(SIGNATURES CONTAINED ON FOLLOWING PAGE)
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IN WITNESS WHEREOF, the parties have signed this Agreement as
of the date first set forth above.
IMAGE TECHNOLOGY LABORATORIES, INC.
By: ___________________________________
Name: Xx. Xxxxx Xxxx
Title: President and Chief
Executive Officer
INVESTOR
By: __________________________________
Name:
Title (if any):
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