Exhibit 4.4
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT, dated as of September 22, 2004
(this "AGREEMENT"), is entered into by and between Sands Brothers Venture
Capital LLC, Sands Brothers Venture Capital III LLC and Sands Brothers Venture
Capital IV LLC (collectively, with their respective permitted successors and
assigns, the "HOLDERS") and Conversion Services International, Inc., a Delaware
corporation (the "COMPANY").
WHEREAS, as of the date hereof, the Holders have loaned to the Company
an aggregate of $1,000,000.00 pursuant to three separate Senior Subordinated
Convertible Promissory Notes (as the same may be amended, extended, restated,
renewed or modified, the "NOTES") issued by the Company to the Holders;
WHEREAS, in connection with their loans to the Company, the Holders
have received three Warrants to purchase up to an aggregate of six million
(6,000,000) shares (the "WARRANT STOCK") of common stock, par value $.001 per
share, of the Company (the "COMMON STOCK");
WHEREAS, the Notes are convertible into shares of Common Stock in
accordance with the terms of the Notes (such share, the "NOTE STOCK"); and
WHEREAS, the Company and the Holders desire to enter into this
Agreement to provide for the public registration of the Warrant Stock and the
Note Stock on the terms provided for herein.
NOW, THEREFORE, in consideration of the recitals and the mutual
promises and covenants herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto do hereby agree as follows:
1. Definitions. As used herein, the following capitalized terms have the
following meanings. All other capitalized terms are defined elsewhere herein:
"COMMISSION" means the Securities and Exchange Commission.
"PERSON" means a natural person, 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 entity or any
department, agency or political subdivision thereof.
"REGISTRABLE SECURITIES" means: (i) the Warrant Stock and (ii) the Note
Stock; provided, however, that Registrable Securities shall not include any
shares of Common Stock or other equity securities the sale of which has been
registered pursuant to the Securities Act or that may be sold to the public
without volume restrictions pursuant to Rule 144 promulgated by the SEC under
the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
2. Demand Registration Rights. Subject to the limitations set forth
herein, the Holders may, at any time following the earlier to occur of: (i) the
closing by the Company of a convertible debt or equity financing with gross
proceeds to the Company of $5 million or greater and the setting of the
conversion and exercise price of the Note and the Warrant in connection
therewith or (ii) September 7, 2005 (such earlier date, the "EFFECTIVE Date"),
make a written request for registration under the Securities Act (a "DEMAND
REQUEST") of all or part of its or their Registrable Securities on any available
SEC registration form (a "DEMAND REGISTRATION"). Notwithstanding anything in
this Section 2 to the contrary, the Holders shall not be entitled to more than
one (1) such Demand Request. Each request will specify the aggregate number of
Registrable Securities to be registered by the Holders and the intended method
of disposition thereof.
In the event that the Company either: (x) fails to file (or include the
Registrable Securities within) an appropriate registration statement with the
SEC covering the Registrable Securities within forty-five (45) days of the
Company's receipt of the Demand Request or (y) fails to have such registration
statement declared effective by the SEC within 125 days of the Company's receipt
of the Demand Request, then then until the applicable registration failure is
cured, the Company shall pay to each Holder an amount in cash, as liquidated
damages and not as a penalty, equal to 1.0% for each thirty (30) day period
(prorated for partial periods) on a daily basis of the the original aggregate
principal amount of the Note held by such Holder. The Company shall be required
to pay such liquidated damages as of the date of the applicable breach. If the
Company fails to pay any liquidated damages pursuant to this Section 2 in full
within seven (7) days after the date payable, the Company will pay interest
thereon at a rate of 10% per annum 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.
3. Restrictions on Demand Rights. No demand for registration pursuant
to Section 2 hereof shall be made prior to the Effective Date. If, and solely in
connection with an underwritten offering by the Company, in the reasonable
discretion of the underwriter for such offering, the number of Registrable
Securities proposed to be sold in such Demand Registration either exceeds the
number that can be effectively sold in, or would have a material adverse effect
on, such underwritten offering, the Company will include in such registration
only the number of Registrable Securities which, in the opinion of such
underwriter or underwriters, can be sold pro rata among the Holders and the
holders of any other securities which are required to be included in such
registration.
4. Piggyback Registration Rights. At any time after the the date
hereof, whenever the Company proposes to register any Common Stock under the
Securities Act, either in a primary distribution by the Company or a secondary
distribution by any of its security holders, the Company will give prompt
written notice to the Holders of its intention to effect such a registration and
will include in the registration all Registrable Securities with respect to
which the Company has received written requests for inclusion in the
registration within fifteen (15) days after receipt of the Company's notice (a
"PIGGYBACK REGISTRATION"). Except as otherwise provided herein, Registrable
Securities with respect to which such request for registration has been received
will be registered by the Company on the same terms and conditions as all other
securities of the Company included in the proposed registration.
5. Restrictions on Piggyback Rights.
(a) The Holders will not be entitled to effect a Piggyback
Registration with respect to a registration statement: (i) filed pursuant to
Section 2 hereof; or (ii) on Form S-4 or Form S-8 under the Securities Act (or
any successor or replacement forms).
(b) If either: (i) the managing underwriter or underwriters,
in the case of an underwritten Piggyback Registration, advise the Company that
in its or their opinion; or (ii) in the case of a Piggyback Registration that is
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not being underwritten, the Company shall reasonably determine, that the number
of securities proposed to be sold in such Piggyback Registration exceeds the
number which can be effectively sold in, or would have a material adverse effect
on, such offering, the Company will include in such registration the number of
securities which, in the opinion of such underwriter or underwriters or the
Company, as the case may be, can be sold as follows: (x) first, the securities
the Company proposes to sell and (y) second, pro rata among the Holders and the
holders of any other securities which are required or eligible to be included in
such registration.
6. Registration Procedures. With respect to any registration of
Registrable Securities, the Company will use its commercially reasonable efforts
to effect the registration in accordance with the intended method of disposition
thereof as quickly as practicable and, in connection with any such request, as
expeditiously as practicable will:
(a) prepare and file with the SEC a registration statement
that includes the Registrable Securities and use its commercially reasonable
efforts to cause such registration statement to become and remain effective as
provided herein and use its commercially reasonable efforts to comply with the
Securities Act and the rules and regulations of the SEC in preparing and filing
such registration statement; provided, however, before filing a registration
statement or any prospectus or amendments or supplements thereto, the Company
will furnish to legal counsel selected by the Holders copies of all such
documents proposed to be filed, which documents will be subject to review and
comment by such counsel;
(b) prepare and file with the SEC such amendments and
post-effective amendments to such registration statement as may be necessary to
keep such registration statement continuously effective until the date when all
Registrable Securities covered by the Registration Statement have been sold or
may be sold without volume restrictions pursuant to Rule 144(k) under the
Securities Act as determined by the counsel to the Company pursuant to a written
opinion letter to such effect, addressed and acceptable to the Company's
transfer agent and the affected Holders; cause the prospectus to be supplemented
by any required prospectus supplement and, as so supplemented, to be filed
pursuant to Rule 424 under the Securities Act; and comply with the provisions of
the Securities Act applicable to it with respect to the disposition of all
securities covered by such registration statement during the applicable period
in accordance with the intended methods of disposition of the Registrable
Securities as set forth in the registration statement or supplement to the
prospectus;
(c) furnish to the Holders, without charge, at least one
signed copy of such registration statement and any post-effective amendment
thereto, and such number of conformed copies thereof and such number of copies
of the prospectus (including each preliminary prospectus) and any amendments or
supplements thereto, and any documents incorporated by reference therein, as the
Holders may reasonably request in order to facilitate the disposition of the
Registrable Securities being registered (it being understood that the Company
consents to the use of the prospectus and any amendment or supplement thereto by
the Holders and the underwriter or underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by the prospectus or any
amendment or supplement thereto);
(d) (i) notify by Supplemental Notice (as defined below) the
Holders at any time when a prospectus relating to Registrable Securities
included in a registration statement is required to be delivered under the
Securities Act in the event that the Company becomes aware of the happening of
any event as a result of which the prospectus included in such registration
statement (as then in effect) contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein (in
the case of the prospectus or any preliminary prospectus, in light of the
circumstances under which they were made) not misleading; and (ii) as promptly
as practicable thereafter, prepare and file with the SEC and furnish to the
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Holders with Registrable Securities subject to the registration statement, a
supplement or amendment to such prospectus 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;
(e) enter into customary agreements (including, if applicable,
an underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities;
(f) subject to compliance with Regulation FD promulgated by
the SEC and the terms of any reasonable confidentiality agreement which may be
requested by the Company, make reasonably available for inspection by the
Holders and any attorney, accountant or other agent retained by the Holders, all
pertinent financial and other records, pertinent corporate documents and
properties of the Company as shall be reasonably necessary to enable them to
exercise their due diligence responsibilities, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such Inspector in connection with such registration statement;
(g) in the event that the sale of Registrable Securities is
pursuant to an underwritten offering, use its commercially reasonable efforts to
obtain a "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;
(h) use all reasonable efforts to obtain an opinion or
opinions from counsel to the Company in customary form;
(i) make generally available to its security holders an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act no later than forty-five (45) days after the end of the twelve-month period
beginning with the first month of the Company's first fiscal quarter commencing
after the effective date of the registration statement, which statement shall
cover such twelve-month period;
(j) use its commercially reasonable efforts to prevent the
entry of any threatened, or obtain the withdrawal of any issued, order
suspending the effectiveness of any registration statement at the earliest
practicable time;
(k) if requested by the managing underwriter or underwriters
or the Holders with Registrable Securities subject to the registration
statement, promptly incorporate in a prospectus supplement or post-effective
amendment such information as the managing underwriter or underwriters or the
Holders reasonably requests to be included therein;
(l) on or prior to the date on which any registration
statement is declared effective, use its commercially reasonable efforts to
register or qualify, and cooperate with the Holders and the underwriter or
underwriters, if any, and their counsel in connection with the registration or
qualification of the Registrable Securities subject to the registration
statement, under the securities or blue sky laws of each state and any other
jurisdiction of the United States as the Holders or underwriter reasonably
requests in writing, to use its commercially reasonable efforts to keep each
such registration or qualification effective, including through new filings, or
amendments or renewals, during the period such registration statement is
required to be kept effective and to do any and all other acts or things
necessary or advisable to enable the disposition in all such jurisdictions of
the Registrable Securities subject to the registration statement; provided,
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however, 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; (ii) consent to general service of process in any such jurisdiction; or
(iii) subject itself to general taxation in any such jurisdiction;
(m) cooperate with the Holders, and the managing underwriter
or underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing the Registrable
Securities be sold and enable the certificates to be in such denominations and
registered in such names as the managing underwriter or underwriters, if any, or
the Holders, may request; and (n) cause all Registrable Securities to be sold
under the registration statement to be listed on each securities exchange on
which similar securities issued by the Issuer are listed.
7. Cooperation by Holders.
(a) The Holders will furnish to the Company in writing such
information and affidavits as the Company may reasonably request and as may be
required by applicable law or regulation in connection with any registration,
qualification or compliance with respect to the Registrable Securities.
(b) The failure of the Holders to furnish any information or
documents in accordance with any provision contained in this Section 7 will not
affect the obligations of the Company under this Agreement to any other Holders
who furnishes such information and documents unless, in the reasonable opinion
of counsel to the Company or the underwriters, such failure impairs or may
impair the viability of the offering or the legality of the registration
statement or the underlying offering.
(c) The Holders, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 6(d) hereof (the
"SUPPLEMENTAL NOTICE"), will forthwith discontinue disposition of the
Registrable Securities until such party's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 6(d) hereof or until
it is advised in writing by the Company that the use of the prospectus may be
resumed, and has received copies of any additional or supplemental filings which
are incorporated by reference in the prospectus. If so directed by the Company,
the Holders will deliver to the Company all copies, other than permanent file
copies then in such party's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice. In the
event the Company shall give Supplemental Notice, the time periods for which
such registration statement must be maintained as effective pursuant to this
Agreement, including without limitation the period referred to in Section 6(b)
hereof, will be extended by the number of days during the period from and
including the date of the giving of such notice to and including the date when
each Holders shall have received the copies of the supplemented or amended
prospectus contemplated by Section 6(d) hereof.
(d) At the end of any period during which the Company is
obligated to keep any registration statement current and effective as provided
by Section 6(b) hereof (and any extensions thereof required by Section 7(c)
hereof), the Holders will discontinue sales of upon receipt of notice from the
Company of its intention to remove from registration the Registrable Securities
subject to the registration statement and such parties will notify the Company
of the number of shares of Common Stock registered which remain unsold promptly
after receipt of such notice from the Company.
(e) In connection with any registered underwritten offering,
the Holders agree to execute agreements pursuant to which the Holders agree not
to offer, sell or contract to sell or otherwise dispose of, directly or
indirectly, or announce the offering of, any securities of the Company
beneficially owned by such party, other than Registrable Securities subject to
the registration statement, for a reasonable period of time after the offering
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(not to exceed one hundred eighty (180) days), upon the reasonable request of
the Company but only to the same extent and for the same period as all other
Company "insiders" are restricted and any release from such restrictions of
other Company "insiders" shall be provided, on a pro rata basis, to each Holders
of Registrable Securities.
8. Registration Expenses.
(a) All costs and expenses of each registration hereunder
(whether Demand Registration or Piggyback Registration), except for commissions
or discounts, will be borne by the Company, including: (i) the reasonable fees
and expenses of legal counsel, accountants or other representatives of the
Company and the Holders (not to exceed $5,000 in the case of the Holders); (ii)
all other costs and expenses of the Company incident to the preparation,
printing and filing under the Securities Act of any registration statement (and
all amendments and supplements thereto) and furnishing copies thereof and of the
prospectus included therein; and (iii) costs and expenses incurred by the
Company or the Holders in connection with the qualification of the Registrable
Securities under the state securities or blue sky laws of various jurisdictions
(the "REGISTRATION EXPENSES"). Without limitation, the Company will pay or cause
to be paid all Registration Expenses in connection with any Demand Registration
or Piggyback Registration whether or not the registration statement becomes
effective.
(b) Notwithstanding the Holders' ongoing rights to
reimbursement or payment under this Section 8 to the contrary, to the extent
actually required by applicable law or regulation, the Holders will pay its
proportionate share of the expenses of the offering determined on a pro rata
basis in accordance with the number of shares of Registrable Securities offered
by each party participating in the registration.
9. Indemnification.
(a) The Company agrees to indemnify, to the fullest extent not
prohibited by applicable law, each seller of Registrable Securities, its
officers and directors and each Person who controls such seller (within the
meaning of the Securities Act or the Securities Exchange Act) against all
losses, claims, damages, liabilities and expenses (including, without
limitation, reasonable attorneys' fees except as limited by Section 9(c)) caused
by any untrue or alleged untrue statement of a material fact contained in any
registration statement, any final prospectus contained therein or any amendment
thereof or supplement thereto or any omission or alleged omission of 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 said seller expressly for use
therein or by said seller's failure to deliver a copy of the registration
statement or final prospectus or any amendments or supplements thereto after the
Company has furnished such seller with a sufficient number of copies of the
same. The reimbursements required by this Section 9(a) will be made by periodic
payments during the course of the investigation or defense, as and when bills
are received or expenses incurred.
(b) In connection with any registration statement in which a
seller of Registrable Securities is participating, each such seller will furnish
to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and, to the fullest extent not prohibited by applicable law, will
indemnify the Company, its directors and officers and each underwriter (if any)
and each Person who controls the Company or such underwriter (within the meaning
of the Securities Act or the Securities Exchange Act) against any losses,
claims, damages, liabilities and expenses (including, without limitation,
reasonable attorneys' fees except as limited by Section 9(c)) resulting from any
untrue or alleged untrue statement of a material fact contained in the
registration statement, final prospectus contained therein, or any amendment
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thereof or supplement thereto or any omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by such seller expressly for
use therein; provided, however, that the obligation to indemnify will be
several, not joint and several, among such sellers of Registrable Securities,
and the liability of each such seller of Registrable Securities will be in
proportion to, and be limited to, the net amount received by such seller from
the sale of Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder will: (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification; and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without the indemnifying party's consent (which consent
will not be unreasonably withheld). The indemnified party will not settle any
claim or liability without first providing the indemnifying party a reasonable
opportunity to assume its defense. An indemnifying party who is not entitled to,
or elects not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) 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 securities.
(e) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party in respect of
any losses, claims, damages, liabilities or expenses referred to herein, then
the indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand, and the indemnified party on the other,
in connection with the statement or omission which resulted in such losses,
claims, damages, liabilities or expenses as well as any other relevant equitable
considerations, including the failure to give the notice required hereunder. The
relative fault of the indemnifying party and the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact relates to information supplied by the
indemnifying party or the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Holders agree that it would not be
just and equitable if contributions pursuant to this Section 9(e) were
determined by pro rata allocation or by any other method of allocation which did
not take into account the equitable considerations referred to herein. The
amount paid or payable to an indemnified party as a result of the losses,
claims, damages, liabilities or expenses referred to above shall be deemed to
include any legal or other expenses reasonably incurred in connection with
investigating or defending the same. Notwithstanding the foregoing, in no event
shall the amount contributed by the Holders exceed the aggregate net offering
proceeds received by any such Holders from the sale of its Registrable
Securities. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who is not guilty of such fraudulent misrepresentation.
10. Current Public Information. At all times after the Company has
filed a registration statement with the SEC pursuant to the requirement of
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either the Securities Act or the Securities Exchange Act, the Company will use
its commercially reasonable efforts to file in a timely manner all reports and
other documents required to be filed by it under the Securities Act and the
Securities Exchange Act and the rules and regulations adopted by the SEC
thereunder and will use its commercially reasonable efforts to take such further
action as the Holders may reasonably request, all to the extent required to
enable such holders to sell Registrable Securities pursuant to: (i) Rule 144
adopted by the SEC under the Securities Act (as such rule may be amended from
time to time) or any similar rule or regulation hereafter adopted by the
Commission; or (ii) a registration statement on Form S-3 or any similar
registration form hereafter adopted by the Commission.
11. Adjustments Affecting Registrable Securities. The Company will at
all times in good faith assist in carrying out all of the provisions of this
Agreement and in the taking of all such action as may be reasonably necessary or
appropriate in order to protect the registration rights pursuant to this
Agreement of the Holders of Registrable Securities against impairment, whether
by denial, delay or otherwise.
12. Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such 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 Company and the Holders
acknowledge and agree that in the event of any breach of this Agreement by it,
the other parties could be irreparably harmed and could not be made whole by
monetary damages. Each party accordingly agrees: (a) to waive the defense in any
action for specific performance that a remedy at law would be adequate; and (b)
that each party hereto, in addition to any other remedy to which they may be
entitled at law or in equity, will be entitled to compel specific performance of
this Agreement.
13. Amendments and Waivers. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended or waived at any time
only by the written agreement of the Company and the Holders. Any waiver,
permit, consent or approval of any kind or character on the part of any such
Holders of any provision or condition of this Agreement must be made in writing
and shall be effective only to the extent specifically set forth in writing.
14. Successors and Assigns. Except as otherwise expressly provided
herein, the provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and permitted assigns of the parties
hereto, whether so expressed or not. The Holders may not assign any of its
rights hereunder without the prior written consent of the Company; provided,
however, that, without such written consent, the Holders may assign this
Agreement or its rights hereunder to any affiliate (within the meaning of the
Securities Act) of the Holders who hereinafter becomes a holder of Registrable
Securities. Any such assignee shall consent in writing to be bound by all of the
terms and conditions of this Agreement. In connection with any such permitted
assignment, the Holders shall provide the Company with prompt written notice of
the name and address of said assignee and identifying the Registrable Securities
with respect to which such registration rights are being assigned.
15. Final Agreement. This Agreement constitutes the final and entire
agreement of the parties concerning the matters referred to herein, and
supersedes all prior or contemporaneous agreements and understandings.
16. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
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17. Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience of reference only and do not constitute a part of
and shall not be utilized in interpreting this Agreement.
18. Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or mailed by registered or certified mail, postage
prepaid, or by overnight courier (prepaid) or if delivered by facsimile
transmission, to the Company at the address or facsimile number set forth in the
Company's SEC filings or to the Holders at the addresses or facsimiles number
set forth in the records of the Company. Any party hereto may by notice so given
change its address for future notice hereunder. Notice shall be deemed to have
been given (a) upon personal delivery, if delivered by hand, (b) three days
after the date of deposit in the mails, postage prepaid, or (c) the next
business day if sent by facsimile transmission (if receipt is electronically
confirmed) or by a prepaid overnight courier service.
19. Governing Law. All questions concerning the construction, validity
and interpretation of, and the performance of the obligations imposed by, this
Agreement shall be governed by and construed in accordance with the internal
substantive laws of the State of New York, without regard to principles of
conflicts of laws.
20. Waiver of Jury Trial, etc. The Holders and the Company hereby: (a)
waive any and all right to trial by jury in litigation relating to this
Agreement, (b) submit to the nonexclusive jurisdiction of the state and federal
courts located in the State of New York, County of New York and (c) waive any
objection the Holders or the Company may have as to the bringing or maintaining
of such action with any such court.
21. Counterparts. This Agreement may be executed in any number of
counterparts and by facsimile, each of which when so executed and delivered
shall be deemed an original, and all of which counterparts together shall
constitute one instrument.
22. Termination of Rights. This Agreement, and the registration rights
provided by this Agreement, shall terminate on the earlier of: (a) the fifth
anniversary of the date hereof, and (b) at such time as the Holders shall have
the ability to sell the Registrable Securities pursuant to and in accordance
with the provisions of Rule 144(k) of the Securities Act. Notwithstanding the
foregoing, the provisions of Sections 8 and 9 of this Agreement shall survive
any termination of this Agreement indefinitely.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on their behalf as of the date first above written.
COMPANY:
CONVERSION SERVICES INTERNATIONAL, INC.
/s/ Scott Newman
By: _______________________________
Name: Scott Newman
Title: President and Chief Executive Officer
HOLDERS:
SANDS BROTHERS VENTURE CAPITAL LLC
By: SB Venture Capital Management LLC, Manager
/s/ Steven Sands
By: _______________________________
Name: Steven Sands
Title: Manager
SANDS BROTHERS VENTURE CAPITAL III LLC
By: SB Venture Capital Management III LLC, Manager
/s/ Steven Sands
By: _______________________________
Name: Steven Sands
Title: Manager
SANDS BROTHERS VENTURE CAPITAL IV LLC
By: SB Venture Capital Management IV LLC, Manager
/s/ Steven Sands
By: _______________________________
Name: Steven Sands
Title: Manager
[Signature Page to Registration Rights Agreement]