REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of July 22,
2008, by and between COMPETITIVE TECHNOLOGIES, INC., a Delaware corporation,
(the "COMPANY"), and FUSION CAPITAL FUND II, LLC, an Illinois limited liability
company (together with it permitted assigns, the "BUYER"). Capitalized terms
used herein and not otherwise defined herein shall have the respective meanings
set forth in the Common Stock Purchase Agreement by and between the parties
hereto, dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "PURCHASE AGREEMENT").
WHEREAS:
A. The Company has agreed, upon the terms and subject to the conditions
of the Purchase Agreement, to issue to the Buyer (i) up to Five Million Dollars
($5,000,000) of the Company's common stock, par value $0.01 per share (the
"COMMON STOCK") (the "PURCHASE SHARES"), and (ii) such number of shares of
Common Stock as is required pursuant to Section 4(e) of the Purchase Agreement
(the "COMMITMENT SHARES"); and
B. To induce the Buyer to enter into the Purchase 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.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Buyer hereby
agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
a. "INVESTOR" means the Buyer, any transferee or assignee thereof to
whom a Buyer assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with Section
9 and any transferee or assignee thereof to whom a transferee or assignee
assigns its rights under this Agreement and who agrees to become bound by
the provisions of this Agreement in accordance with Section 9.
b. "PERSON" means any person or entity including any corporation, a
limited liability company, an association, a partnership, an organization,
a business, an individual, a governmental or political subdivision thereof
or a governmental agency.
c. "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing one or more registration
statements of the Company 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(s) by the United
States Securities and Exchange Commission (the "SEC").
d. "REGISTRABLE SECURITIES" means the Purchase Shares which have been,
or which may from time to time be, issued or issuable to the Investor upon
purchases of the Available Amount under the Purchase Agreement (without
regard to any limitation or restriction on purchases) and the
Commitment Shares issued or issuable to the Investor and any shares of
capital stock issued or issuable with respect to the Purchase Shares, the
Commitment Shares or the Purchase Agreement as a result of any stock split,
stock dividend, recapitalization, exchange or similar event or otherwise,
without regard to any limitation on purchases under the Purchase Agreement.
e. "REGISTRATION STATEMENT" means the registration statement of the
Company covering only the sale of the Registrable Securities.
2. REGISTRATION.
a. Mandatory Registration. The Company shall within ten (10) Business
Days from the date hereof file with the SEC the Registration Statement. The
Registration Statement shall register only the Registrable Securities, and
up to 50,000 additional shares of Common Stock and no other securities of
the Company. The Investor and its counsel shall have a reasonable
opportunity to review and comment upon such registration statement or
amendment to such registration statement and any related prospectus prior
to its filing with the SEC. Investor shall furnish all information
reasonably requested by the Company for inclusion therein. The Company
shall use its best efforts to have the Registration Statement or amendment
declared effective by the SEC at the earliest possible date. The Company
shall use reasonable best efforts to keep the Registration Statement
effective pursuant to Rule 415 promulgated under the 1933 Act and available
for sales of all of the Registrable Securities at all times until the
earlier of (i) the date as of which the Investor may sell all of the
Registrable Securities without restriction pursuant to Rule 144(k)
promulgated under the 1933 Act (or successor thereto) or (ii) the date on
which (A) the Investor shall have sold all the Registrable Securities and
no Available Amount remains under the Purchase Agreement (the "REGISTRATION
PERIOD"). The Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading.
b. Rule 424 Prospectus. The Company shall, as required by applicable
securities regulations, from time to time file with the SEC, pursuant to
Rule 424 promulgated under the 1933 Act, the prospectus and prospectus
supplements, if any, to be used in connection with sales of the Registrable
Securities under the Registration Statement. The Investor and its counsel
shall have a reasonable opportunity to review and comment upon such
prospectus prior to its filing with the SEC. The Investor shall use its
reasonable best efforts to comment upon such prospectus within one (1)
Business Day from the date the Investor receives the final version of such
prospectus.
c. Sufficient Number of Shares Registered. In the event the number of
shares available under the Registration Statement is insufficient to cover
all of the Registrable Securities, the Company shall amend the Registration
Statement or file a new registration statement (a "NEW REGISTRATION
STATEMENT"), so as to cover all of such Registrable Securities as soon as
practicable, but in any event not later than ten (10) Business Days after
the necessity therefor arises. The Company shall use it reasonable best
efforts to cause such amendment and/or New Registration Statement to become
effective as soon as practicable following the filing thereof.
3. RELATED OBLIGATIONS.
With respect to the Registration Statement and whenever any Registrable
Securities are to be registered pursuant to Section 2(b) including on any New
Registration Statement, the Company shall use its reasonable best efforts to
effect the registration of the Registrable Securities in accordance with the
intended method of disposition thereof and, pursuant thereto, the Company shall
have the following obligations:
a. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to any registration
statement and the prospectus used in connection with such registration
statement, which prospectus is to be filed pursuant to Rule 424 promulgated
under the 1933 Act, as may be necessary to keep the Registration Statement
or any New Registration Statement 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 Statement or any New
Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof as set forth in
such registration statement.
b. The Company shall permit the Investor to review and comment upon
the Registration Statement or any New Registration Statement and all
amendments and supplements thereto at least two (2) Business Days prior to
their filing with the SEC, and not file any document in a form to which
Investor reasonably objects. The Investor shall use its reasonable best
efforts to comment upon the Registration Statement or any New Registration
Statement and any amendments or supplements thereto within two (2) Business
Days from the date the Investor receives the final version thereof. The
Company shall furnish to the Investor, without charge any correspondence
from the SEC or the staff of the SEC to the Company or its representatives
relating to the Registration Statement or any New Registration Statement.
c. Upon request of the Investor, the Company shall furnish to the
Investor, (i) promptly after the same is prepared and filed with the SEC,
at least one copy of such registration statement and any amendment(s)
thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits, (ii) upon the
effectiveness of any registration statement, a copy of the prospectus
included in such registration statement and all amendments and supplements
thereto (or such other number of copies as the Investor may reasonably
request) and (iii) such other documents, including copies of any
preliminary or final prospectus, as the Investor may reasonably request
from time to time in order to facilitate the disposition of the Registrable
Securities owned by the Investor.
d. The Company shall use reasonable best efforts to (i) register and
qualify the Registrable Securities covered by a registration statement
under such other securities or "blue sky" laws of such jurisdictions in the
United States as the Investor reasonably requests, (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 (x) qualify to do
business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d), (y) subject itself to general taxation
in any such jurisdiction, or (z) file a general consent to service of
process in any such jurisdiction. The Company shall promptly notify the
Investor who holds Registrable Securities of the receipt by the Company of
any notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under the
securities or "blue sky" laws of any jurisdiction in the United States or
its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.
e. As promptly as practicable after becoming aware of such event or
facts, the Company shall notify the Investor in writing of the happening of
any event or existence of such facts 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 omits 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,
and promptly prepare a supplement or amendment to such registration
statement to correct such untrue statement or omission, and deliver a copy
of such supplement or amendment to the Investor (or such other number of
copies as the Investor may reasonably request). The Company shall also
promptly notify the Investor in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when
a registration statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to the
Investor by facsimile on the same day of such effectiveness and by
overnight mail), (ii) of any request by the SEC for amendments or
supplements to any registration statement or related prospectus or related
information, and (iii) of the Company's reasonable determination that a
post-effective amendment to a registration statement would be appropriate.
f. The Company shall use its reasonable best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of any
registration statement, or the suspension of the qualification of any
Registrable Securities for sale in any jurisdiction and, if such an order
or suspension is issued, to obtain the withdrawal of such order or
suspension at the earliest possible moment and to notify the Investor of
the issuance of such order and the resolution thereof or its receipt of
actual notice of the initiation or threat of any proceeding for such
purpose.
g. The Company shall (i) cause all the Registrable Securities to be
listed on each securities exchange on which securities of the same class or
series issued by the Company are then listed, if any, if the listing of
such Registrable Securities is then permitted under the rules of such
exchange, or (ii) secure designation and quotation of all the Registrable
Securities on the Principal Market. The Company shall pay all fees and
expenses in connection with satisfying its obligation under this Section.
h. The Company shall cooperate with the Investor to facilitate the
timely preparation and delivery of certificates (not bearing any
restrictive legend) representing the Registrable Securities to be offered
pursuant to any registration statement and enable such certificates to be
in such denominations or amounts as the Investor may reasonably request and
registered in such names as the Investor may request.
i. The Company shall at all times provide a transfer agent and
registrar with respect to its Common Stock.
j. If reasonably requested by the Investor, the Company shall (i)
immediately incorporate in a prospectus supplement or post-effective
amendment such information as the Investor believes should be included
therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the number of
Registrable Securities being sold, the purchase price being paid therefor
and any other terms of the offering of the Registrable Securities; (ii)
make all required filings of such prospectus supplement or post-effective
amendment as soon as
notified of the matters to be incorporated in such prospectus supplement or
post-effective amendment; and (iii) supplement or make amendments to any
registration statement.
k. The Company shall use its reasonable best efforts to cause the
Registrable Securities covered by the registration statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to consummate the disposition of such
Registrable Securities.
l. Within one (1) Business Day after any registration statement which
includes the Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to
deliver, to the transfer agent for such Registrable Securities (with copies
to the Investor) confirmation that such registration statement has been
declared effective by the SEC in the form attached hereto as Exhibit A.
Thereafter, if requested by the Buyer at any time, the Company shall
require its counsel to deliver to the Buyer a written confirmation whether
or not the effectiveness of such registration statement has lapsed at any
time for any reason (including, without limitation, the issuance of a stop
order) and whether or not the registration statement is current and
available to the Buyer for sale of all of the Registrable Securities.
m. The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investor of Registrable
Securities pursuant to any registration statement.
4. OBLIGATIONS OF THE INVESTOR.
a. The Company shall notify the Investor in writing of the information
the Company reasonably requires from the Investor in connection with any
registration statement hereunder. The 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.
b. The Investor agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of
any registration statement hereunder.
c. The Investor agrees that, upon receipt of any notice from the
Company of the happening of any event or existence of facts of the kind
described in Section 3(f) or the first sentence of 3(e), the Investor will
immediately discontinue disposition of Registrable Securities pursuant to
any registration statement(s) covering such Registrable Securities until
the Investor's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(f) or the first sentence of 3(e).
Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to promptly deliver shares of Common Stock without any
restrictive legend in accordance with the terms of the Purchase Agreement
in connection with any sale of Registrable Securities with respect to which
an Investor has entered into a contract for sale prior to the Investor's
receipt of a notice from the Company of the happening of any event of the
kind described in Section 3(f) or the first sentence of 3(e) and for which
the Investor has not yet settled.
5. EXPENSES OF REGISTRATION.
All reasonable expenses, other than sales or brokerage commissions,
incurred in connection with registrations, filings or qualifications pursuant to
Sections 2 and 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, and fees and disbursements of
counsel for the Company, shall be paid by the Company.
6. INDEMNIFICATION.
a. To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend the Investor, each Person,
if any, who controls the Investor, the members, the directors, officers,
partners, employees, agents, representatives of the Investor and each
Person, if any, who controls the Investor within the meaning of the 1933
Act or the Securities Exchange Act of 1934, as amended (the "1934 ACT")
(each, an "INDEMNIFIED PERSON"), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, attorneys' fees,
amounts paid in settlement or expenses, joint or several, (collectively,
"CLAIMS") incurred in investigating, preparing or defending any action,
claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, whether
or not an indemnified party is or may be a party thereto ("INDEMNIFIED
DAMAGES"), to which any of them may become subject insofar as such Claims
(or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact in the Registration Statement,
any New Registration Statement or any post-effective amendment thereto or
in any filing made in connection with the qualification of the offering
under the securities or other "blue sky" laws of any jurisdiction in which
Registrable Securities are offered ("BLUE SKY FILING"), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or
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, (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 pursuant to the Registration Statement or any New Registration
Statement or (iv) any material violation by the Company of this Agreement
(the matters in the foregoing clauses (i) through (iv) being, collectively,
"VIOLATIONS"). The Company shall reimburse each Indemnified Person promptly
as such expenses are incurred and are due and payable, for any 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 by an Indemnified Person
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 such
Indemnified Person expressly for use in connection with the preparation of
the Registration Statement, any New 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) or Section 3(e); (ii)
with respect to any superceded prospectus, shall not inure to the benefit
of any such person from whom the person asserting any such Claim purchased
the Registrable Securities that are the subject thereof (or to the benefit
of any person controlling such person) if the untrue statement or omission
of material fact contained in the superceded prospectus was corrected in
the revised prospectus, as then amended or supplemented, if such revised
prospectus was timely made available by the Company pursuant to Section
3(c) or Section 3(e), 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; (iii)
shall not be available to the extent such Claim is based on a failure of
the Investor to deliver or to cause to be delivered the prospectus made
available by the Company, if such prospectus was timely made available by
the Company pursuant to Section 3(c) or Section 3(e); and (iv) 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. 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 Investor pursuant to Section 9.
b. In connection with the Registration Statement or any New
Registration Statement, the Investor agrees to severally and not jointly
indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a), the Company, each of its directors,
each of its officers who signs the Registration Statement or any New
Registration Statement, each Person, if any, who controls the Company
within the meaning of the 1933 Act or the 1934 Act (collectively and
together with an Indemnified Person, an "INDEMNIFIED PARTY"), against any
Claim or Indemnified Damages to which any of them may become subject, under
the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or
Indemnified Damages arise out of or are based upon any Violation, in each
case to the extent, and only to the extent, that such Violation occurs in
reliance upon and in conformity with written information about the Investor
set forth on Exhibit B attached hereto and furnished to the Company by the
Investor expressly for use in connection with such registration statement;
and, subject to Section 6(d), the Investor will reimburse any legal or
other expenses 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) and the agreement with respect to
contribution contained in Section 7 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior
written consent of the Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the Investor shall be liable
under this Section 6(b) for only that amount of a Claim or Indemnified
Damages as does not exceed the net proceeds to the 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 Investor pursuant
to Section 9.
c. Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a
Claim, 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 Indemnified Party or Indemnified Person shall cooperate
fully with the indemnifying party in connection with any negotiation or
defense of any such action or claim by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to
the Indemnified Party or Indemnified Person which relates to such action or
claim. The indemnifying party shall keep the Indemnified Party or
Indemnified Person fully apprised at all times as to the status of the
defense or any settlement negotiations with respect thereto. No
indemnifying
party shall be liable for any settlement of any action, claim or proceeding
effected without its written consent, provided, however, that the
indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment
or enter into any settlement or other compromise which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to
such Indemnified Party or Indemnified Person of a release from all
liability in respect to such claim or litigation. Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to
all rights of the Indemnified Party or Indemnified Person with respect to
all third parties, firms or corporations relating to the matter for which
indemnification has been made. 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 prejudiced in its ability to defend
such action.
d. 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 and when bills are received or Indemnified
Damages are incurred.
e. The indemnity agreements contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.
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 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 fraudulent
misrepresentation; and (ii) contribution 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 AND DISCLOSURE UNDER THE SECURITIES ACTS.
With a view to making available to the Investor 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 Investor to sell securities of the Company
to the public without registration ("RULE 144"), the Company agrees, at the
Company's sole expense, 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 the Investor so long as the Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company
that it has complied with the reporting and
or disclosure provisions 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 Investor to sell
such securities pursuant to Rule 144 without registration.
d. take such additional action as is requested by the Investor to
enable the Investor to sell the Registrable Securities pursuant to Rule
144, including, without limitation, delivering all such legal opinions,
consents, certificates, resolutions and instructions to the Company's
Transfer Agent as may be requested from time to time by the Investor and
otherwise fully cooperate with Investor and Investor's broker to effect
such sale of securities pursuant to Rule 144.
The Company agrees that damages may be an inadequate remedy for any
breach of the terms and provisions of this Section 8 and that Investor shall,
whether or not it is pursuing any remedies at law, be entitled to equitable
relief in the form of a preliminary or permanent injunctions, without having to
post any bond or other security, upon any breach or threatened breach of any
such terms or provisions.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
The Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Investor. The Investor may
not assign its rights under this Agreement without the written consent of the
Company, other than to an affiliate of the Investor controlled by Xxxxxx X.
Xxxxxx or Xxxxxx X. Xxxxxxxxxx.
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 the written consent of the Company and the
Investor.
11. MISCELLANEOUS.
a. A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons 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, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated
and kept on file by the sending party); or (iii) one (1) Business Day after
deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
If to the Company:
Competitive Technologies, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Chief Executive Officer
With a copy to:
Xxxxxx Law Group
0000 Xxxx Xxxxxxxxx Xx
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: M. Xxxxxxx Xxxxxx
If to the Investor:
Fusion Capital Fund II, LLC
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0-000
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxx
or at such other address and/or facsimile number and/or to the
attention of such other person as the recipient party has specified by
written notice given to each other party three (3) Business Days prior to
the effectiveness of such change. Written confirmation of receipt (A) given
by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender's facsimile
machine containing the time, date, recipient facsimile number and an image
of the first page of such transmission or (C) provided by a nationally
recognized overnight delivery service, shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause (i), (ii)
or (iii) above, respectively.
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. The corporate laws of the State of Delaware shall govern all issues
concerning the relative rights of the Company and its stockholders. All
other questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of
the State of Illinois, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Illinois or any
other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of Illinois. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting the City of Chicago, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is brought in an inconvenient forum or that the venue
of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address for such notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE,
AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
e. This Agreement, and the Purchase Agreement 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 Purchase Agreement supersede all prior agreements
and understandings among the parties hereto with respect to the subject
matter hereof and thereof.
f. Subject to the requirements of Section 9, this Agreement shall
inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.
g. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in identical counterparts, each of
which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this
Agreement.
i. 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.
j. 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.
k. This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.
* * * * * *
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
THE COMPANY:
COMPETITIVE TECHNOLOGIES, INC.
By: \s\ Xxxx Nano
-------------
Name: Xxxx Nano
Title: President
BUYER:
FUSION CAPITAL FUND II, LLC
BY: FUSION CAPITAL PARTNERS, LLC
BY: ROCKLEDGE CAPITAL CORPORATION
By: \s\ Xxxx Xxxxxxxxxx
-------------------
Name: Xxxx Xxxxxxxxxx
Title: President
EXHIBIT A
TO REGISTRATION RIGHTS AGREEMENT
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[Date]
[TRANSFER AGENT]
________
_________
Attention: _________
Re: [__________]
Ladies and Gentlemen:
We are counsel to COMPETITIVE TECHNOLOGIES, INC., a Delaware corporation
(the "COMPANY"), and have represented the Company in connection with that
certain Common Stock Purchase Agreement, dated as of _________, 2008 (the
"PURCHASE AGREEMENT"), entered into by and between the Company and Fusion
Capital Fund II, LLC (the "BUYER") pursuant to which the Company has agreed to
issue to the Buyer shares of the Company's Common Stock, par value $0.01 per
share (the "COMMON STOCK"), in an amount up to Five Million Dollars ($5,000,000)
(the "PURCHASE SHARES"), in accordance with the terms of the Purchase Agreement.
In connection with the transactions contemplated by the Purchase Agreement, the
Company has registered with the U.S. Securities & Exchange Commission the
following shares of Common Stock:
(1) 1,500,000 shares of Common Stock to be issued upon purchase from
the Company by the Buyer from time to time (the "PURCHASE SHARES.").
(2) 63,280 shares of Common Stock which have been issued to the Buyer
as a commitment fee (the "INITIAL COMMITMENT SHARES").
(3) 42,187 additional Commitment Shares to be issued in connection
with each purchase of Purchase Shares (the "ADDITIONAL COMMITMENT
SHARES" and together with the Initial Commitment Shares, "COMMITMENT
SHARES").
Pursuant to the Purchase Agreement, the Company also has entered into a
Registration Rights Agreement, dated as of __________, 2008, with the Buyer (the
"REGISTRATION RIGHTS AGREEMENT") pursuant to which the Company agreed, among
other things, to register the Purchase Shares and the Commitment Shares under
the Securities Act of 1933, as amended (the "1933 ACT"). In connection with the
Company's obligations under the Purchase Agreement and the Registration Rights
Agreement, on _______, 2008, the Company filed a Registration Statement (File
No. 333-_________) (the "REGISTRATION STATEMENT") with the Securities and
Exchange Commission (the "SEC") relating to the sale of the Purchase Shares and
the Commitment Shares.
In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us
by telephone that the SEC has entered an order declaring the Registration
Statement effective under the 1933 Act at _____ P.M. on __________, 200_ and we
have no knowledge, after telephonic inquiry of a member of the SEC's staff, that
any stop order suspending its effectiveness has been issued or that any
proceedings for that purpose are pending before, or threatened by, the SEC and
the Purchase Shares and the Commitment Shares are available for sale under the
1933 Act pursuant to the Registration Statement and may issued without any
restrictive legend.
Very truly yours,
[Company Counsel]
By:____________________
CC: Fusion Capital Fund II, LLC
EXHIBIT B
TO REGISTRATION RIGHTS AGREEMENT
INFORMATION ABOUT THE INVESTOR FURNISHED TO THE COMPANY BY THE INVESTOR
EXPRESSLY FOR USE IN CONNECTION WITH THE REGISTRATION STATEMENT
As of the date of the Purchase Agreement, Fusion Capital beneficially owned ____
shares of common stock of the Company. Xxxxxx X. Xxxxxx and Xxxxxx X.
Xxxxxxxxxx, the principals of Fusion Capital, are deemed to be beneficial owners
of all of the shares of common stock owned by Fusion Capital. Messrs. Xxxxxx
and Xxxxxxxxxx have shared voting and investment power over the shares being
offered under the prospectus filed with the SEC in connection with the
transactions contemplated under the Purchase Agreement. Fusion Capital is not a
licensed broker dealer or an affiliate of a licensed broker dealer.
