REGISTRATION RIGHTS AGREEMENT
Agreement made as of this 30th day of June, 1999 between TRIANGLE
IMAGING GROUP, INC., a Florida corporation (the "Company") and WATERSIDE CAPITAL
CORPORATION, a Virginia corporation (the "Investor").
R E C I T A L S:
A. The Company and the Investor desire to enter into this Registration
Rights Agreement to provide for registration rights with respect to the common
stock of the Company purchasable by Investor under that certain stock purchase
warrant dated June 30, 1999 and the common stock capable of being converted
under the terms of the Company's Series D Convertible Preferred Stock (the
"Warrant").
1. CERTAIN DEFINITIONS.
Section 1. As used in this Agreement, the following terms shall have
the following meanings:
1.1. COMMISSION means the Securities and Exchange Commission,
or any other federal agency at the time administering the Securities Act and the
Exchange Act.
1.2. COMMON STOCK means (i) the Company's Common Stock, $0.001
par value, as authorized on the date of this Agreement (ii) any other securities
into which or for which any of the securities described in (i) may be converted
or exchanged pursuant to a plan of recapitalization, reorganization, merger,
sale of assets or otherwise.
1.3. EXCHANGE ACT means the Securities Exchange Act of 1934,
or any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
1.4. HOLDERS has the meaning set forth in Section 2.1.
1.5. PERSON means an individual, corporation, partnership,
limited liability company, joint venture, trust or unincorporated organization
or a government or any agency or political subdivision thereof.
1.6. PREFERRED SHARES means the shares of the Company's
Preferred Stock (as defined in the Purchase Agreement) purchased by the Investor
pursuant to the Purchase Agreement.
1.7. PURCHASE AGREEMENT means the Series D Convertible
Preferred Stock Purchase Agreement dated the date hereof among the Company and
the Investor.
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1.8. REGISTRABLE SECURITIES means any shares of Common Stock
issued upon exercise of the Warrant or upon the conversion of the Company's
Series D Convertible Preferred Stock owned by the Investor or its permitted
successors and assigns.
1.9. SECURITIES ACT means the Securities Act of 1933, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
2. REGISTRATION RIGHTS.
Section 2.1. PIGGYBACK REGISTRATION. If at any time or times after the
exercise of the Warrant or upon the Conversion of the Series D Convertible
Preferred Stock by Investor or its permitted successors or assigns, the Company
shall determine to register any of its Common Stock or securities convertible
into or exchangeable for Common Stock under the Securities Act whether in
connection with a public offering of securities by the Company (a "primary
offering"), a public offering thereof by stockholders (a "secondary offering"),
or both (but not in connection with a registration effected solely to implement
an employee benefit plan or a transaction to which Rule 145 or any other similar
rule of the Commission under the Securities Act is applicable), the Company will
promptly give written notice thereof to the holders of Registrable Securities
(the "Holders") then outstanding, and will use its best efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Holders may request in a writing delivered to the Company within 15 days after
the notice given by the Company; PROVIDED, HOWEVER that in the case of the
registration of Common Stock by the Company in connection with an underwritten
public offering, the Company shall not be required to register Registrable
Securities of the Holders in excess of the amount, if any, of Registrable
Securities which the principal underwriter of an underwritten offering shall
reasonably and in good faith agree can be included without jeopardizing the
success of the offering by the Company, and PROVIDED, FURTHER, that if any
Registrable Securities are not included for this reason, the Company will permit
the Holders of Registrable Securities who have requested participation and all
other holders of securities of the Company having a right to include securities
in such registration who have requested participation in the offering to
register the Registrable Securities proportionately in accordance with the
number of shares of Registrable Securities (in the case of the Investor) or
shares of Common Stock subject to such registration right (in the case of such
other holders) owned or obtainable by them, except that the Company shall first
exclude from such registration, in the following order, all shares of Common
Stock sought to be included therein by (i) any holder thereof not having any
such contractual, incidental registration rights (which the Holders acknowledge
may from time to time be granted by the Board of Directors of the Company to
directors and officers of the Company) and (ii) any holder thereof having
contractual, incidental registration rights subordinate and junior to the rights
of the Holders of Registrable Securities. Without in any way limiting the types
of registrations to which this Section 2.1 shall apply, in the event that the
Company shall effect a "shelf registration" under Rule 415 under the Securities
Act, or any other similar rule or regulation, the Company shall take all
necessary action, including, without limitation, the filing of post-effective
amendments, to permit the Investor to include its Registrable Securities in such
registration in accordance with the terms of this Section 2.1. In connection
with any offering under this Section 2.1 involving an underwriting, the Company
shall not be required to include any Registrable Securities in such underwriting
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unless the Holders thereof accept the terms of the underwriting as agreed on
between the Company, the Holders and the underwriter selected by the Company.
The Company shall have the right to postpone or withdraw any registration
effective pursuant to the Section 2.1 without obligation to any Holder.
Section 2.2. REGISTRATION EXPENSES. In the event of a registration
described in Section 2.1, all reasonable expenses of registration and offering
of the Company and the Holders participating in the offering including, without
limitation, printing expenses, fees and disbursements of counsel and independent
public accountants, fees and expenses incurred in connection with complying with
state securities or "blue sky" laws, fees of the National Association of
Securities Dealers, Inc. or any stock exchange and fees of transfer agents and
registrars, shall be borne by the Company, except that the Holders shall bear
(i) underwriting commissions and discounts attributable to their Registrable
Securities being registered, (ii) selling commissions and (iii) the fees and
expenses of a selling Holders' own counsel.
Section 2.3. FURTHER OBLIGATIONS OF THE COMPANY. Whenever under the
preceding sections of this Agreement the Company is required to register
Registrable Securities, it shall also do the following:
2.3.1 Use its best efforts to diligently prepare for
filing with the Commission a registration statement and such amendments and
supplements to such registration statement and the related prospectus as are
necessary to keep such registration statement effective and to comply with the
provisions of the Securities Act with respect to the sale of securities covered
by such registration statement for the period necessary to complete the proposed
public offering;
2.3.2 Furnish to each selling Holder such copies of each
preliminary and final prospectus and such other documents as such holder may
reasonably request to facilitate the public offering of his Registrable
Securities;
2.3.3 Enter into any underwriting agreement with
provisions reasonably required by the proposed underwriter for the selling
Holders relating to the registration of the Registrable Securities, if any,
2.3.4 Use its best efforts to register or qualify the
Registrable Securities covered by such registration statement under the
securities or "blue-sky" laws of such jurisdictions as any selling Holder of
Registrable Securities may reasonably request; provided that the Company shall
not be required to register in any states which shall require it to qualify to
do business or subject itself to general service of process as a condition of
such registration;
2.3.5 Notify the selling Holders (i) when a registration
statement has become effective and when any post-effective amendments and
supplements thereto become effective, (ii) of any requests by the Commission or
any state securities authority for amendments and supplements to a registration
statement and prospectus or for additional information after the registration
statement has become effective, (iii) of the issuance by the Commission or any
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state securities authority of any stop order suspending the effectiveness of a
registration statement or the initiation of any proceedings for that purpose,
(iv) if, between the effective date of a registration statement and the closing
of any sale of Registrable Securities covered thereby, the Company receives any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose, and (v) of the happening of any event known to the
Company that occurs during the period the registration statement is effective
and which makes any statement made in such registration statement or the related
prospectus untrue in any material respect or which requires the making of any
changes in such registration statement or prospectus in order to make the
statements therein not misleading;
2.3.6 Make reasonable efforts to obtain the withdrawal of
any order suspending the effectiveness of a registration statement;
2.3.7 Cooperate with the selling Holders to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be sold pursuant to such registration statement and not bearing
any restrictive legends and registered in such names as the selling Holders may
reasonably request at least 5 days before the closing of any sale of Registrable
Securities;
2.3.8 On the occurrence of any event contemplated by
Section 2.3.5(v) above, use reasonable efforts to prepare a supplement or
post-effective amendment to a registration statement or the related prospectus
or any document incorporated therein by reference or file any other required
documents so that, as thereafter delivered to the purchasers of the Registrable
Securities, such prospectus will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. In the
event a circumstance contemplated in Section 2.3.5(v) should occur, the Company
shall notify the selling Holders to suspend use of the prospectus as soon as
reasonably practicable after discovery of the same and the selling Holders shall
suspend use of the prospectus until the Company has amended or supplemented the
prospectus to correct such mistake or omission. At such time as such public
disclosure is otherwise made or the Company determines in good faith that such
disclosure is not necessary the Company shall promptly notify the selling
Holders of such determination, amend or supplement the prospectus if necessary
to correct any untrue statement or omission therein and furnish the selling
Holders such numbers of copies of the prospectus as so amended or supplemented
as the selling Holders may reasonably request; and
2.3.9 Use the Company's best efforts to cause the
Registrable Securities to be listed on any stock exchange or quotation system on
which the Common Stock has been listed.
Section 2.4 COMPANY'S RIGHT TO DELAY REGISTRATION. If at the time of
any request to register Registrable Securities under Section 2.1, the Company is
engaged or has fixed plans to engage within 90 days of the time of the request
in a registered public offering as to which the Holders of Registrable
Securities may include Registrable Securities pursuant to Section 2.1, or is
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engaged in any other activity which, in the good faith determination of the
Company's Board of Directors, would be adversely effected by the requested
registration to the material detriment of the Company, then the Company may, at
its option, direct that such requests be delayed for a period not in excess of
four (4) months from the effective date of such offering or the date of
commencement of such other material activity, as the case may be or, if earlier,
such time as any such material detriment would not occur.
2.4.1 HOLDBACK AGREEMENTS. If any registration of shares
of the Company's Common Stock or securities exercisable or exchangeable for, or
convertible into, shares of the Company's Common Stock shall be registered in
connection with an underwritten public offering, Seller agrees not to effect any
public sale or distribution, including any sale pursuant to Rule 144 under the
Securities Act, of any Registrable Securities, and not to effect any such public
sale or distribution of any other equity security of the Company or of any
security convertible into, or exchangeable or exercisable for, any equity
security of the Company (in each case, other than as part of such underwritten
public offering) during the thirty (30) days prior to, and during the ninety
(90) day period beginning on the effective date of such Registration Statement
(except as part of such registration).
3. INDEMNIFICATION. Incident to any registration referred to in this Agreement,
and subject to applicable law, the Company will indemnify each Holder of
Registrable Securities so registered, and each person controlling any of them
within the meaning of the Securities Act or the Exchange Act against all claims,
losses, damages and liabilities, including legal and other expenses reasonably
incurred in investigating or defending against the same, arising out of any
untrue statement of a material fact contained in any prospectus or other
document (including any related registration statement) or any omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any violation by the
Company of the Securities Act, any state securities or "blue-sky" laws or any
rule or regulation thereunder in connection with such registration; PROVIDED,
HOWEVER, that the Company will not be liable in any case to the extent that any
such claim, loss, damage or liability may have been caused by an untrue
statement or omission based on information furnished in writing to the Company
by such Holder expressly for use therein. In the event of any registration of
any of the Registrable Securities under the Securities Act pursuant to this
Agreement, each seller of Registrable Securities, jointly and severally, will
indemnify and hold harmless the Company, each of its directors and officers and
each underwriter (if any) and each person, if any, who controls the Company or
any such underwriter within the meaning of the Securities Act or the Exchange
Act against any claim, losses, damages and liabilities, including legal and
other expenses reasonably incurred in investigating or defending it against the
same, arising out of any untrue statement of a material fact contained in any
prospectus or other document (including any related registration statement) or
any omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, if the statement or
omission was made in reliance on and in conformity with information furnished in
writing to the Company by or on behalf of such selling Holder, specifically for
use in connection with the preparation of such registration statement,
prospectus amendment or supplement; PROVIDED, HOWEVER, that the obligations of
such selling Holders hereunder shall be limited to an amount equal to the
proceeds to each Holder of Registrable Securities sold as contemplated herein.
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4. RULE 144 REQUIREMENTS. The Company shall use its best efforts to take all
action as may be required as a condition to the availability of Rule 144 under
the Securities Act (or any successor exemptive rule afterwards in effect). In
connection therewith, the Company shall furnish to any Holder of Registrable
Securities, on request, a written statement executed by the Company as to the
steps it has taken to comply with the current public information requirements of
Rule 144.
5. TRANSFER OF REGISTRATION RIGHTS. The registration rights of the Holders under
this Agreement may be transferred to any transferee of the Warrant and any
Registrable Security who (i) is a Holder of Registrable Securities, (ii) is an
affiliate, as that term is defined in regulations promulgated by the Commission
under the Exchange Act, of a Holder of Registrable Securities (including a
partner of such Holder) or (iii) acquires Registrable Securities or the Warrant.
Each such transferee shall be deemed to be a "Holder" for purposes of this
Agreement; provided that no transfer of registration rights by a Holder under
this Section 5 shall create any additional rights in the transferee beyond those
rights granted to Holders in this Agreement.
6. MISCELLANEOUS.
Section 6.1. NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the
part of any party to this Agreement in exercising any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
These remedies are cumulative and not exclusive of any remedies provided by law.
Section 6.2. AMENDMENTS AND WAIVERS. Except as provided below,
amendments to this Agreement shall require and shall be effective on receipt of
the written consent of: (i) the Company and (ii) the holders of at least a
majority in interest of the Warrant or Registrable Securities. Except as
provided below, compliance with any covenant or provision in this Agreement may
be waived on written consent by the party or parties whose rights are being
waived; PROVIDED, THAT, the rights of holders of Registrable Securities may be
waived only with the written consent of the holders of at least a majority in
interest of the Registrable Securities. Notwithstanding the foregoing, no
waivers or amendments shall be effective to reduce the percentage in interest of
the Registrable Securities the consent of the holders of which is required under
this Section. Any waiver or amendments may be given subject to satisfaction of
conditions stated therein and any waiver or amendments shall be effective only
in the specific instance and for the specific purpose for which given.
Section 6.3. ADDRESSES FOR NOTICES. All notices, requests demands and
other communications required by this Agreement shall be in writing (including
telegraphic communication) and mailed, telegraphed or delivered to each
applicable party at the address set forth in the Purchase Agreement or at such
other address any party may inform the party in writing in compliance with this
Section.
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All such notices, requests, demands and other communications shall,
when mailed (which mailing must be accomplished by first class mail, postage
prepaid, electronic facsimile transmission, express overnight courier service,
or registered mail, return receipt requested) or telegraphed, and shall be
considered to be delivered two (2) days after dispatch; PROVIDED, HOWEVER, that
notice delivered by facsimile shall be deemed delivered the day it is sent and
notice delivered by overnight courier shall be deemed delivered the day
immediately following the day on which it is sent .
Section 6.4. BINDING EFFECT; ASSIGNMENT. This Agreement shall bind and
inure to the benefit of the parties and their respective heirs, successors and
assigns, except that the Company shall not have the right to delegate its
obligations hereunder or to assign its rights hereunder or any interest herein
without the prior written consent of the holders of at least a majority in
interest of the Warrant or Registrable Securities.
Section 6.5. PRIOR AGREEMENTS. This Agreement constitutes the entire
agreement between the parties and supersedes any prior understandings or
agreements concerning the subject matter hereof.
Section 6.6. SEVERABILITY. The provisions of this Agreement are
severable and, in the event that any court of competent jurisdiction shall
determine that any one or more of the provisions or part of a provision
contained in this Agreement, for any reason, is invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision or part of a provision of this Agreement,
but this Agreement shall be reformed and construed as if such invalid or illegal
or unenforceable provision, or part of a provision, had never been contained
herein, and such provisions or part reformed so that it would be valid, legal
and enforceable to the maximum extent possible.
Section 6.7. JURISDICTION AND VENUE. The Company consents to the
jurisdiction of the Circuit Court of the City of Norfolk, Virginia, for the
purpose of any suit, action or other proceeding arising out of any of its
obligations arising under this Agreement or with respect to the transactions
contemplated hereby, and expressly waives any and all objections it may have as
to venue in such court.
Section 6.8. HEADINGS. Article, section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section 6.9. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 6.10. FURTHER ASSURANCES. From and after the date of this
Agreement, on the request of any party, the other parties shall execute and
deliver such instruments documents and other writings as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Agreement.
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IN WITNESS, the undersigned have executed this Registration Rights
Agreement as the day and year first above written.
TRIANGLE IMAGING GROUP, INC.
By /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx, President and
Chief Executive Officer
WATERSIDE CAPITAL CORPORATION
By /s/ XXXXXX X. XxXXXXXX
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Name XXXXXX X. XxXXXXXX
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Title Secretary/Treasurer
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