COMPREHENSIVE HEALTHCARE SOLUTIONS, INC. REGISTRATION RIGHTS AGREEMENT
COMPREHENSIVE
HEALTHCARE SOLUTIONS, INC.
THIS
REGISTRATION RIGHTS AGREEMENT
(the
“Agreement”)
is
made as of August 3, 2005 by and between COMPREHENSIVE
HEALTHCARE SOLUTIONS, INC.,
a
Delaware corporation (the “Company”),
and
COMPREHENSIVE
ASSOCIATES LLC,
a New
York limited liability company (together with its successors and assigns, the
“Holder”).
R
E C I T A L S:
Pursuant
to the terms of Convertible Debentures, dated as of the date hereof, in the
aggregate principal amount of $235,000 (the “Aggregate
Principal Amount”)
executed by the Company in favor of the Holder (the “Debentures”),
and
pursuant to the terms of Warrants, dated as of the date hereof, for the purchase
of an aggregate of 5,000,000 shares of Common Stock, par value $.10 per share,
of the Company (“Common
Stock”)
executed by the Company in favor of the Holder (the “Warrants”),
the
Holder will have the right to acquire in the future certain shares of Common
Stock. The Debentures and Warrants are collectively are referred to herein
as
the “Securities.”
The
parties desire to set forth herein their agreement as to the terms and
conditions of certain registration rights relating to the Common Stock issuable
upon conversion or exercise of the Securities, as applicable, by the
Holder.
A
G R E E M E N T:
The
parties hereto agree as follows:
1. Certain
Definitions.
As used
in this Agreement, the following terms shall have the following respective
meanings:
“Commission”
shall
mean the Securities and Exchange Commission.
“Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall
be
in effect from time to time.
“Holder”
shall
mean the Holder (as hereinabove defined) and any Person who shall have acquired
Registrable Securities from the Holder, either individually or jointly, as
the
case may be, in a transaction pursuant to which registration rights are
transferred pursuant to Section 7 hereof.
“Person”
shall
mean an individual, a partnership, a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or a governmental or quasi-governmental entity,
or
any department, agency or political subdivision thereof or any other entity
of
any kind.
“Prospectus”
shall
mean the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective Registration Statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
“Registrable
Securities”
shall
mean (i) any and all shares of Common Stock issuable upon conversion of the
Debentures, and (ii) any and all shares of Common Stock issuable upon exercise
of the Warrants.
The
terms
“register,”
“registered”
and
“registration”
refer
to a registration effected by preparing, filing and having declared effective
a
registration statement in compliance with the Securities Act.
“Registration
Expenses”
shall
mean (i) all expenses, other than Selling Expenses (defined below), incurred
by
the Company in complying with Section 2 hereof, including without limitation,
all registration, qualification and filing fees, exchange or quotation medium
listing fees, printing and delivery expenses, escrow and custodian fees, fees
and disbursements of counsel for the Company, blue sky fees and expenses and
the
expenses of accountants for the Company including the expenses of any special
audits incident to or required by any such registration and (ii) the reasonable
fees and disbursements of one counsel chosen by the Holder in connection with
the Registration Statement.
“Registration
Statement”
shall
mean an initial registration statement which is required to register the resale
of all Registrable Securities and, in each case, the Prospectus, amendments
and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
“Securities
Act”
shall
mean the Securities Act of 1933, as amended, and the rules and regulations
of
the Commission promulgated thereunder, all as the same shall be in effect from
time to time.
“Selling
Expenses”
shall
mean all underwriting discounts, selling commissions and stock transfer taxes
and the costs, fees and expenses of any accountants, attorneys (other than
the
cost, fees and expenses of attorneys which are Registration Expenses) or other
experts retained by the Holder.
2. Required
Registration.
(a) The
Company shall prepare and file, as soon as is reasonably practicable, but in
no
event later than the thirtieth (30th)
day
following the date hereof (the “Filing
Date”),
a
Registration Statement under the Securities Act covering the resale of the
Registrable Securities and shall use its best efforts to cause the Registration
Statement to become effective as expeditiously as possible, but in no event
later than the earlier of (i) the one hundred twentieth (120th)
day
following the date hereof or (ii) the third day following the date on which
the
Company is notified by the Commission that the Registration Statement will
not
be reviewed or is no longer subject to further review and comments (the
“Effectiveness
Date”),
and
shall use its best efforts to keep the Registration Statement continuously
effective under the Securities Act until the date which is six (6) years
following the date hereof (the “Effectiveness
Period”).
(b) If:
(i) the
Registration Statement is not filed with the Commission on or prior to the
Filing Date (if the Company files the Registration Statement with the Commission
without affording the Holder the opportunity to review and comment on the same
as required by Section 5(a), the Company shall be deemed not to have filed
the
Registration Statement with the Commission on or prior to the Filing Date),
or
(ii) the
Company fails to file with the Commission a request for acceleration in
accordance with Rule 461 promulgated under the Securities Act, within two (2)
days of the date that the Company is notified (orally or in writing, whichever
is earlier) by the Commission that the Registration Statement will not be
“reviewed,” or not subject to further review, or
(iii) the
Registration Statement filed or required to be filed hereunder is not declared
effective by the Commission by the Effectiveness Date, or
(iv) after
the
date that the Registration Statement is initially declared effective by the
Commission (the “Effective
Date”),
the
Registration Statement ceases for any reason to remain continuously effective
as
to all Registrable Securities, or the Holder is not permitted to utilize the
Prospectus therein to resell such Registrable Securities, (any
such
failure or breach being referred to as an “Event,”
and
for purposes of clause (i), (iii) or (iv), the date on which such Event occurs,
or for purposes of clause (ii) the date on which such two (2) day period is
exceeded, being referred to as “Event
Date”),
then
for an Event: (x) on each such Event Date, the Company shall pay to the Holder
an amount in cash, as liquidated damages and not as a penalty, equal to one
and
one-half percent (1.5%) of the initial Aggregate Principal Amount; and (y)
on
each monthly anniversary of each such Event Date (if the applicable Event shall
not have been cured by such date) until the applicable Event is cured, the
Company shall pay to the Holder an amount in cash, as liquidated damages and
not
as a penalty, equal to one and one-half percent (1.5%) of the initial Aggregate
Principal Amount. Notwithstanding the foregoing, no damages shall be payable
with respect to an Event if liquidated damages are payable hereunder with
respect to another Event at such time.
If
the
Company fails to pay any liquidated damages pursuant to this Section in full
within fifteen (15) days after the date payable, the Company will pay interest
thereon at a rate of sixteen percent (16%) per annum (or such lesser maximum
amount that is permitted to be paid by applicable law) to the Holder, accruing
daily from the date such liquidated damages are due until such amounts, plus
all
such interest thereon, are paid in full.
(c) [intentionally
omitted]
(d) The
Company represents and warrants that it is not a party to, or otherwise subject
to, any agreement, other than this Agreement, granting registration rights
to
any other Person with respect to any securities of the Company and agrees that
it will not include any securities of the Company, other than the Registrable
Securities, in the Registration Statement. Notwithstanding the foregoing, the
Company may include in the Registration Statement up to 50,000 shares of Common
Stock on behalf of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP.
3. Expenses
of Registration.
All
Registration Expenses incurred in connection with the Registration Statement
pursuant to Section 2 hereof shall be borne by the Company. All Selling Expenses
relating to securities registered on behalf of the Holder shall be borne by
the
Holder.
4. Holdback
Agreements.
The
Company agrees not to effect any public sale or distribution of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, during the ten (10) day period prior to, and during the
ninety (90) day period following, the Effective Date. None of the Company’s
executive officers, directors, or holders of at least 5% of the outstanding
Common Stock will effect any public sale or distribution (including sales
pursuant to Rule 144) of any such securities during such periods.
5. Registration
Procedures.
The
Company will use its best efforts to effect the registration of the Registrable
Securities in accordance with the intended method or methods of distribution
thereof, and pursuant thereto the Company will under the time frames provided
herein, or if not so provided, as expeditiously as possible:
(a) prepare
and file with the Commission the Registration Statement on any appropriate
form
for which the Company qualifies with respect to such Registrable Securities
and
use its best efforts to cause the Registration Statement to become effective
(provided
that
before filing the Registration Statement or Prospectus or any amendments or
supplements thereto, the Company will (i) furnish to the counsel selected by
the
Holder copies of all such documents proposed to be filed, which documents will
be subject to the review of such counsel for a period of seven (7) days
following the receipt thereof, and (ii) notify the Holder covered by such
registration of any stop order issued or threatened by the
Commission);
(b) prepare
and file with the Commission such amendments and supplements to the Registration
Statement and the Prospectus used in connection therewith as may be reasonably
necessary to keep the Registration Statement effective for the Effectiveness
Period or until the time by which all of the Registrable Securities have been
sold, and comply with the provisions of the Securities Act with respect to
the
disposition of the Registrable Securities during such period in accordance
with
the intended methods of disposition by the Holder set forth in the Registration
Statement;
(c) furnish
to the Holder such number of copies of the Registration Statement, each
amendment and supplement thereto, the Prospectus included in the Registration
Statement (including each preliminary Prospectus) and such other documents
as
the Holder may reasonably request in order to facilitate the disposition of
the
Registrable Securities owned by the Holder;
(d) use
its
best efforts to register or qualify the Registrable Securities under the
securities or blue sky laws of such jurisdictions as the Holder reasonably
requests and do any and all other acts and things which may be reasonably
necessary or advisable to enable the Holder to consummate the disposition in
such jurisdictions of the Registrable Securities owned by the Holder
(provided
that the
Company will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 5(d), (ii) subject itself to taxation in any jurisdiction or (iii)
take
any action that would subject it to general service of process in any such
jurisdiction);
(e) promptly
notify the Holder, at any time when the Prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event as
a
result of which the Prospectus included in the Registration Statement contains
an untrue statement of a material fact or omits any material fact necessary
to
make the statements therein not misleading, and the Company will prepare and
deliver to the Holder a supplement or amendment to such Prospectus so that,
as
thereafter delivered to the purchasers of such Registrable Securities, such
Prospectus will not contain an untrue statement of a material fact or omit
to
state any material fact necessary to make the statements therein not misleading;
(f) cause
all
Registrable Securities to be listed on each securities exchange or quoted on
Nasdaq or other quotation medium, if any, on which similar securities issued
by
the Company are then listed or quoted;
(g) provide
a
transfer agent for all Registrable Securities not later than the Effective
Date;
(h) enter
into such customary agreements (including underwriting agreements in customary
form) and take all such other actions as the Holder or the underwriters, if
any,
reasonably request in order to expedite or facilitate the disposition of the
Registrable Securities;
(i) make
available for inspection by the Holder, any underwriter participating in any
disposition pursuant to the Registration Statement and any attorney, accountant
or other agent retained by the Holder or underwriter, all pertinent financial
and other records, pertinent corporate documents and properties of the Company,
and cause the Company’s officers, directors, employees and independent
accountants to supply all information reasonably requested by the Holder,
underwriter, attorney, accountant or agent in connection with the Registration
Statement and (ii) to participate in presentations to prospective purchasers
as
reasonably requested by any underwriter;
(j) otherwise
use its best efforts to comply with all applicable rules and regulations of
the
Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve (12)
months beginning with the first day of the Company’s first full calendar quarter
after the Effective Date, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) in
the
event of the issuance of any stop order suspending the effectiveness of the
Registration Statement, or of any order suspending or preventing the use of
any
related Prospectus or suspending the qualification of any shares of Common
Stock
included in the Registration Statement for sale in any jurisdiction, use its
best efforts promptly to obtain the withdrawal of such order;
(l) if
requested by the Holder, obtain a so-called “cold comfort” letter from the
Company’s independent public accountants in customary form and covering such
matters of the type customarily covered by cold comfort letters;
(m) use
its
best efforts to cause the Registrable Securities to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the Holder to consummate the disposition of such Registrable
Securities.
6. Indemnification.
(a) The
Company agrees to indemnify, to the fullest extent permitted by applicable
law,
the Holder, its officers, directors, members and managers, and each Person
who
controls the Holder (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities, expenses or any amounts paid in settlement
of any litigation, investigation or proceeding commenced or threatened
(collectively, “Claims”)
to
which each such indemnified party may become subject under the Securities Act
insofar as such Claim arose out of (i) any untrue or alleged untrue statement
of
material fact contained in the Registration Statement, Prospectus or preliminary
Prospectus or any amendment thereof or supplement thereto or (ii) 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, except
insofar as the same are caused by or contained in any information furnished
in
writing to the Company by the Holder expressly for use therein. In connection
with an underwritten offering, the Company will indemnify the underwriters,
their officers and directors and each Person who controls the underwriters
(within the meaning of the Securities Act) to the same extent as provided above
with respect to the indemnification of the Holder.
(b) The
Holder will, to the fullest extent permitted by applicable law, indemnify the
Company, its directors and officers and each Person who controls the Company
(within the meaning of the Securities Act) against any and all Claims to which
each such indemnified party may become subject under the Securities Act insofar
as such Claim arose out of (i) any untrue or alleged untrue statement of
material fact contained in the Registration Statement, Prospectus or preliminary
Prospectus or any amendment thereof or supplement thereto, or (ii) 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; provided
that
with respect to a Claim arising pursuant to clause (i) or (ii) above, the
material misstatement or omission is contained in information the Holder
provided to the Company expressly for use therein; provided,
further,
that
the obligation to indemnify will be limited to the amount of proceeds received
by the Holder from the sale of Registrable Securities pursuant to the
Registration Statement.
(c) Any
Person entitled to indemnification hereunder will give written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(but the failure to provide such notice shall not release the indemnifying
party
of its obligation under paragraphs (a) and (b) unless, and then only to the
extent that, the indemnifying party has been prejudiced by such failure to
provide such notice). At the request of the indemnified party, the indemnifying
party shall assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party.
(d) The
indemnifying party shall not be liable to indemnify an indemnified party for
any
settlement, or consent to judgment of any such action effected without the
indemnifying party’s written consent (but such consent will not be unreasonably
withheld, delayed or conditioned). Furthermore, if the indemnifying party
assumes the defense of a claim, the indemnifying party shall not, except with
the prior written approval 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 each indemnified party
of a release (in form and substance satisfactory to each indemnified party)
from
all liability in respect of such claim or litigation without any payment or
consideration provided by each such indemnified party.
(e) If
the
indemnification provided for in this Section 6 is unavailable to an indemnified
party under clauses (a) and (b) above in respect of any losses, claims, damages
or liabilities referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or
liabilities in such proportion as is appropriate to reflect not only the
relative benefits received by the Company, the underwriters, and the Holder
from
the sale of the Registrable Securities pursuant to the registered offering
of
securities for which indemnity is sought but also the
relative
fault of the Company, the underwriters and the Holder in connection with
the
misstatement or omission which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company, the underwriters and the Holder
shall
be deemed to be based on the relative relationship of the total net proceeds
from the offering (before deducting expenses) to the Company, the total
underwriting commissions and fees from the offering (before deducting expenses)
to the underwriters and the total net proceeds from the offering (before
deducting expenses) to the Holder. The relative fault of the Company, the
underwriters and the Holder shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Holder and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided
that in
no event shall the liability of the Holder hereunder be greater in amount
than
the dollar amount of the proceeds received by the Holder upon the sale of
the
Registrable Securities giving rise to such indemnification
obligation.
(f) The
indemnification provided for under this Agreement will remain in full force
and
effect regardless of any investigation made by or on behalf of the indemnified
party or any officer, director or controlling person of such indemnified party
and will survive the transfer of the Registrable Securities.
7. Transfer
of Registration Rights.
The
rights granted to the Holder under this Agreement may be assigned to any Person
in connection with any transfer or assignment of Registrable Securities by
the
Holder.
8. Exchange
Act Compliance.
The
Company shall comply with all of the reporting requirements of the Exchange
Act
then applicable to it, if any, and shall comply with all other public
information reporting requirements of the Commission which are conditions to
the
availability of Rule 144 for the sale of the Registrable Securities. The Company
shall cooperate with the Holder in supplying such information as may be
necessary for such Holder to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to the
availability of Rule 144.
9. Miscellaneous.
(a) No
Inconsistent Agreements.
So long
as the Holder owns any Registrable Securities, the Company will not enter into
any agreement that is inconsistent with or violates the rights granted hereunder
to the Holder, including, without limitation, any agreement that would require
the Company to register any of its securities with priority with respect to
registration over the rights granted to the Holder hereunder, without the prior
written consent of the Holder.
(b) Remedies.
The
Holder will be entitled to enforce its rights specifically to recover damages
caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach
of
the provisions of this Agreement and that the Holder may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
(c) Amendments
and Waivers.
The
provisions of this Agreement may be amended or waived only with the prior
written consent of the Company and the Holder.
(d) Successors
and Assigns.
This
Agreement and all of the provisions hereof shall be binding upon and inure
to
the benefit of the parties and their respective successors and assigns. In
addition, whether or not any express assignment has been made, the provisions
of
this Agreement which are for the benefit of Holder are also for the benefit
of,
and enforceable by, any transferee of Registrable Securities, in accordance
with
Section 7 hereof.
(e) Severability.
In case
any provision of this Agreement shall be invalid, illegal or unenforceable,
the
validity, legality and enforceability of the remaining provisions shall not
be
in any way affected or impaired thereby.
(f) Counterparts
and Facsimile.
This
Agreement may be executed in any number of counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all such
counterparts together shall constitute one agreement. This Agreement may be
signed and delivered to the other party by facsimile transmission; such
transmission shall be deemed a valid signature.
(g) Descriptive
Headings.
The
section and paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of
this Agreement.
(h) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York, without giving effect to conflicts of laws rules
or principles.
(i) Notices.
All
notices, demands and requests of any kind to be delivered to any party in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given if personally or hand delivered or if sent by a recognized
overnight courier or by registered or certified mail, return receipt requested
and postage prepaid, or by facsimile transmission, addressed as
follows:
(i) if
to the
Company, to:
Comprehensive
Healthcare Solutions, Inc.
▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman of the Board & Chief Executive
Officer
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to:
▇▇▇▇▇▇
& Jaclin, LLP
▇▇▇
▇▇▇▇▇
▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
(ii) if
to the
Holder, to:
Comprehensive
Associates LLC
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▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to:
Certilman
Balin ▇▇▇▇▇ & ▇▇▇▇▇, LLP
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
or
to
such other address as the party to whom notice is to be given may have furnished
to the other party hereto in writing in accordance with provisions of this
Section 9(i). Any such notice or communication shall be deemed to have been
effectively given (i) in the case of personal or hand delivery, on the date
of
such delivery, (ii) in the case of a recognized overnight delivery courier,
on
the business day after the date when sent or earlier upon receipt of evidence
of
acceptance of delivery, (iii) in the case of mailing, on the third business
day
following that day on which the piece of mail containing such communication
is
posted and (iv) in the case of facsimile transmission, on the date of
transmission.
(j) Entire
Agreement.
This
Agreement constitutes the full and entire understanding and agreement of the
parties with regard to the subject matter hereof and supersedes all prior
agreements and understandings among the parties with respect
thereto.
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IN
WITNESS WHEREOF,
the
parties have executed this Registration Rights Agreement as of the date first
written above.
COMPREHENSIVE
HEALTHCARE
SOLUTIONS,
INC.
By:
▇▇▇▇
▇.
▇▇▇▇▇▇▇,
Chairman
of the Board & Chief Executive Officer
COMPREHENSIVE
ASSOCIATES LLC
By:
The Nybor Group, Inc., Managing Member
By:_________________________________
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, President
Agreed
as
to Section 4:
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____________________________________
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▇.
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____________________________________
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▇. ▇▇▇▇▇▇▇▇▇
____________________________________
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