EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of October 25, 1999, between
the investor or investors signatory hereto (each an "Investor" and together the
"Investors"), and Dental/Medical Diagnostic Systems, Inc. a Delaware corporation
(the "Company").
WHEREAS, simultaneously with the execution and delivery of this
Agreement, the Investors are purchasing from the Company, pursuant to an
Exchangeable Preferred Stock and Warrants Purchase Agreement dated the date
hereof (the "Purchase Agreement"), $2,000,000 Stated Value of Exchangeable
Preferred Stock and Warrants to purchase up to 40,000 shares of the Company's
Common Stock and 2,500 shares of Common Stock (terms not defined herein shall
have the meanings ascribed to them in the Purchase Agreement); and
WHEREAS, the Company desires to grant to the Investors the registration
rights set forth herein with respect to the shares of Common Stock issued at
Closing, the Exchange Shares of Common Stock issuable upon exchange of or as
dividends upon the Exchangeable Preferred Stock purchased pursuant to the
Purchase Agreement and shares of Common Stock issuable upon exercise of the
Warrants (hereinafter referred to as the "Stock" or "Securities" of the
Company).
NOW, THEREFORE, the parties hereto mutually agree as follows:
Section 1. REGISTRABLE SECURITIES. As used herein the term "Registrable
Security" means the Securities until (i) the Registration Statement has been
declared effective by the Commission, and all Securities have been disposed of
pursuant to the Registration Statement, (ii) all Securities have been sold under
circumstances under which all of the applicable conditions of Rule 144 (or any
similar provision then in force) under the Securities Act ("Rule 144") are met,
(iii) all Securities have been otherwise transferred to holders who may trade
such Securities without restriction under the Securities Act, and the Company
has delivered a new certificate or other evidence of ownership for such
Securities not bearing a restrictive legend or (iv) such time as, in the opinion
of counsel to the Company, all Securities may be sold without any time, volume
or manner limitations pursuant to Rule 144(k) (or any similar provision then in
effect) under the Securities Act. The term "Registrable Securities" means any
and/or all of the securities falling within the foregoing definition of a
"Registrable Security." In the event of any merger, reorganization,
consolidation, recapitalization or other change in corporate structure affecting
the Common Stock, such adjustment shall be deemed to be made in the definition
of "Registrable Security" as is appropriate in order to prevent any dilution or
enlargement of the rights granted pursuant to this Agreement.
Section 2. RESTRICTIONS ON TRANSFER. Each Investor acknowledges and
understands that prior to the registration of the Securities as provided herein,
the Securities are "restricted securities" as defined in Rule 144 promulgated
under the Act. Each Investor understands that no disposition or transfer of the
Securities may be made by Investor in the absence of (i) an opinion of counsel
to the Investor, in form and substance reasonably satisfactory to the Company,
that such transfer may be made without registration under the Securities Act or
(ii) such registration.
With a view to making available to the Investors the benefits of Rule 144
under the Securities Act or any other similar rule or regulation of the
Commission that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to:
(a) comply with the provisions of paragraph (c)(1) of Rule 144;
and
(b) file with the Commission in a timely manner all reports and
other documents required to be filed with the Commission pursuant to
Section 13 or 15(d) under the Exchange Act by companies subject to either
of such sections, irrespective of whether the Company is then subject to
such reporting requirements.
Section 3. REGISTRATION RIGHTS WITH RESPECT TO THE SECURITIES.
(a) The Company agrees that it will prepare and file with the
Securities and Exchange Commission ("Commission"), within sixty (60) days
after the Closing Date a registration statement (on Form S-3, or other
appropriate registration statement form) under the Securities Act (the
"Registration Statement"), at the sole expense of the Company (except as
provided in Section 3(c) hereof), in respect of the Investors, so as to
permit a public offering and resale of the Securities under the Act by
the Investors as selling stockholders and not as underwriters.
The Company shall use its best efforts to cause such Registration
Statement to become effective within ninety (90) days from the Closing
Date (or 120 days from the Closing Date if the SEC makes a "full review"
of the Registration Statement), or, if earlier, within five (5) days of
SEC clearance to request acceleration of effectiveness. The number of
shares designated in the Registration Statement to be registered shall
include all the Common Stock, the Warrant Shares, at least 175% of the
number of shares issuable upon exchange of the Exchangeable Preferred
Stock assuming exchange in full on the day prior to filing date of the
Registration Statement, and such number of shares as the Company deems
prudent for the purpose of issuing shares of Common Stock as dividends on
the Exchangeable Preferred Stock, and shall include appropriate language
regarding reliance upon Rule 416 to the extent permitted by the
Commission. The Company will notify the Investors of the effectiveness of
the Registration Statement within one Trading Day of such event. In the
event that the number of shares so registered shall be less than 125% of
the number of shares of Registrable Securities remaining unsold (using
the Exchange Price of the Exchangeable Preferred Stock from time to
time), then the Company shall be obligated to file, within thirty (30)
days of such event, a further Registration Statement registering such
remaining shares and shall use its best efforts to cause such additional
Registration Statement to become effective within ninety (90) days of the
date of such event.
(b) The Company will maintain the Registration Statement or
post-effective amendment filed under this Section 3 effective under the
Securities Act until the earlier of (i) the date that none of the
Securities covered by such Registration Statement are or may become
issued and outstanding, (ii) the date that all of the Securities have
been sold pursuant to such Registration Statement, (iii) the date the
Investors receive an opinion of counsel to the Company, which counsel
shall be reasonably acceptable to the Investors, that the Securities may
be sold under the provisions of Rule 144 without limitation as to volume,
(iv) all Securities have been otherwise transferred to persons who may
trade such shares without restriction under the Securities Act, and the
Company has delivered a new certificate or other evidence of ownership
for such securities not bearing a restrictive legend, or (v) all
Securities may be sold without any time, volume or manner limitations
pursuant to Rule 144(k) or any similar provision then in effect under the
Securities Act in the opinion of counsel to the Company, which counsel
shall be reasonably acceptable to the Investor (the "Effectiveness
Period").
(c) All fees, disbursements and out-of-pocket expenses and costs
incurred by the Company in connection with the preparation and filing of
the Registration Statement under subparagraph 3(a) and in complying with
applicable securities and Blue Sky laws (including, without limitation,
all attorneys' fees of the Company) shall be borne by the Company. The
Investors shall bear the cost of underwriting and/or brokerage discounts,
fees and commissions, if any, applicable to the Securities being
registered and the fees and expenses of their counsel. The Investors and
their counsel shall have a reasonable
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period, not to exceed five (5) Trading Days, to review the proposed
Registration Statement or any amendment thereto, prior to filing with the
Commission, and the Company shall provide each Investor with copies of
any comment letters received from the Commission with respect thereto
within two (2) Trading Days of receipt thereof. The Company shall qualify
any of the Securities for sale in such states as any Investor reasonably
designates and shall furnish indemnification in the manner provided in
Section 6 hereof. However, the Company shall not be required to qualify
in any state which will require an escrow or other restriction relating
to the Company and/or the sellers, or which will require the Company to
qualify to do business in such state or require the Company to file
therein any general consent to service of process. The Company at its
expense will supply the Investors with copies of the applicable
Registration Statement and the prospectus included therein and other
related documents in such quantities as may be reasonably requested by
the Investors.
(d) The Company shall not be required by this Section 3 to include
any Investor's Securities in any Registration Statement which is to be
filed if, in the opinion of counsel to the Company, the proposed offering
or other transfer as to which such registration is requested is exempt
from applicable federal and state securities laws and would result in all
purchasers or transferees obtaining securities which are not "restricted
securities", as defined in Rule 144 under the Securities Act.
(e) In the event that (i) the Registration Statement to be filed
by the Company pursuant to Section 3(a) above is not filed with the
Commission within sixty (60) days from the Closing Date, (ii) such
Registration Statement is not declared effective by the Commission within
the earlier of ninety (90) days from the Closing Date (or 120 days from
the Closing Date if the Commission makes a "full review" of the
Registration Statement) or five (5) days of clearance by the Commission
to request effectiveness, (iii) such Registration Statement is not
maintained as effective by the Company for the period set forth in
Section 3(b) above or (iv) the additional Registration Statement referred
to in Section 3(a) is not filed within thirty (30) days or declared
effective within ninety (90) days as set forth therein (each a
"Registration Default") then the Company will pay Investor (pro rated on
a daily basis), as liquidated damages for such failure and not as a
penalty one percent (1%) of the aggregate market value of shares of
Common Stock purchased from the Company (including the Exchange Shares
which would be issuable upon Exchange of the Exchangeable Preferred Stock
on any date of determination, and whether or not the Exchangeable
Preferred Stock are then exchangeable pursuant to their terms) and held
by the Investor for each week until such Registration Statement has been
filed, and in the event of late effectiveness (in case of clause (ii)
above) or lapsed effectiveness (in the case of clause (iii) above), one
percent (1%) of the aggregate market value of shares of Common Stock
purchased from the Company and held by the Investor (including the
Exchange Shares which would be issuable upon exchange of the Exchangeable
Preferred Stock on any date of determination, and whether or not the
Exchangeable Preferred Stock are then exchangeable pursuant to their
terms) for each week (regardless of whether one or more such Registration
Defaults are then in existence) until such Registration Statement has
been declared effective. Such payment of the liquidated damages shall be
made to the Investors in cash, within five (5) calendar days of demand,
provided, however, that the payment of such liquidated damages shall not
relieve the Company from its obligations to register the Securities
pursuant to this Section. The market value of the Common Stock for this
purpose shall be the closing price (or last trade, if so reported) on the
Principal Market for each day during such Registration Default.
Notwithstanding anything to the contrary contained herein, a failure to
obtain or maintain the effectiveness of a filed Registration Statement or
the ability of an Investor to use an otherwise effective Registration
Statement to effect resales of Securities during the period after 45 days
and within 90 days from the end of the Company's fiscal year resulting
solely from the need to update the Company's financial statements
contained or incorporated by reference in such Registration Statement
shall not constitute a Registration Default and shall not trigger the
accrual of liquidated damages hereunder.
If the Company does not remit the payment to the Investors as set
forth above, the Company will pay the Investors reasonable costs of
collection, including attorneys' fees, in addition to the
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liquidated damages. The registration of the Securities pursuant to this
provision shall not affect or limit the Investors' other rights or
remedies as set forth in this Agreement.
(f) No provision contained herein shall preclude the Company from
selling securities pursuant to any Registration Statement in which it is
required to include Securities pursuant to this Section 3.
(g) If at any time or from time to time after the effective date
of any Registration Statement, the Company notifies the Investors in
writing of the existence of a Potential Material Event (as defined in
Section 3(h) below), the Investors shall not offer or sell any Securities
or engage in any other transaction involving or relating to Securities,
from the time of the giving of notice with respect to a Potential
Material Event until the Investors receive written notice from the
Company that such Potential Material Event either has been disclosed to
the public or no longer constitutes a Potential Material Event; provided,
however, that the Company may not so suspend the right to such holders of
Securities for more than thirty (30) days in the aggregate (90 days in
the case of an acquisition requiring the filing of audited financial
statements of the acquired business under Form 8-K) during any twelve
month period, during the period the Registration Statement is required to
be in effect, and if such period is exceeded, such event shall be a
Registration Default. If a Potential Material Event shall occur prior to
the date a Registration Statement is required to be filed, then the
Company's obligation to file such Registration Statement shall be delayed
without penalty for not more than twenty (20) days, and such delay or
delays shall not constitute a Registration Default. The Company must, if
lawful, give the Investors notice in writing at least two (2) Trading
Days prior to the first day of the blackout period.
(h) "Potential Material Event" means any of the following: (a) the
possession by the Company of material information not ripe for disclosure
in a registration statement, as determined in good faith by the Chief
Executive Officer or the Board of Directors of the Company that
disclosure of such information in a Registration Statement would be
detrimental to the business and affairs of the Company; or (b) any
material engagement or activity by the Company which would, in the good
faith determination of the Chief Executive Officer or the Board of
Directors of the Company, be adversely affected by disclosure in a
registration statement at such time.
Section 4. COOPERATION WITH COMPANY. The Investors will cooperate with
the Company in all respects in connection with this Agreement, including timely
supplying all information and confirmations reasonably requested by the Company
or the Commission (which shall include all information regarding the Investors
and proposed manner of sale of the Registrable Securities required to be
disclosed in any Registration Statement) and executing and returning all
documents reasonably requested in connection with the registration and sale of
the Registrable Securities and entering into and performing their obligations
under any underwriting agreement, if the offering is an underwritten offering,
in usual and customary form, with the managing underwriter or underwriters of
such underwritten offering. Nothing in this Agreement shall obligate any
Investor to consent to be named as an underwriter in any Registration Statement.
The obligation of the Company to register the Registrable Securities shall be
absolute and unconditional as to those Securities which the Commission will
permit to be registered without naming the Investors as underwriters. Any delay
or delays caused by the Investors by failure to cooperate as required hereunder
shall not constitute a Registration Default.
Section 5. REGISTRATION PROCEDURES. If and whenever the Company is
required by any of the provisions of this Agreement to effect the registration
of any of the Registrable Securities under the Act, the Company shall (except as
otherwise provided in this Agreement), as expeditiously as possible, subject to
the Investors' assistance and cooperation as reasonably required with respect to
each Registration Statement:
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(a) (i) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the Act with
respect to the sale or other disposition of all securities covered by
such registration statement whenever the Investors shall desire to sell
or otherwise dispose of the same (including prospectus supplements with
respect to the sales of securities from time to time in connection with a
registration statement pursuant to Rule 415 promulgated under the Act)
and (ii) take all lawful action such that each of (A) the Registration
Statement and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading and (B) the prospectus forming part of the
Registration Statement, and any amendment or supplement thereto, does not
at any time during the Registration Period include an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(b) (i) prior to the filing with the Commission of any
Registration Statement (including any amendments thereto) and the
distribution or delivery of any prospectus (including any supplements
thereto), provide draft copies thereof to the Investors as required by
Section 3(c) and reflect in such documents all such comments as the
Investors (and their counsel) reasonably may propose respecting the
Selling Shareholders and Plan of Distribution sections (or equivalents)
and (ii) furnish to each Investor such numbers of copies of a prospectus
including a preliminary prospectus or any amendment or supplement to any
prospectus, as applicable, in conformity with the requirements of the
Act, and such other documents, as such Investor may reasonably request in
order to facilitate the public sale or other disposition of the
securities owned by such Investor;
(c) register and qualify the Registrable Securities covered by the
Registration Statement under such other securities or blue sky laws of
such jurisdictions as the Investors shall reasonably request (subject to
the limitations set forth in Section 3(c) above), and do any and all
other acts and things which may be necessary or advisable to enable each
Investor to consummate the public sale or other disposition in such
jurisdiction of the securities owned by such Investor;
(d) list such Registrable Securities on the Principal Market, if
the listing of such Registrable Securities is then permitted under the
rules of such Principal Market;
(e) notify each Investor at any time when a prospectus relating
thereto covered by the Registration Statement is required to be delivered
under the Act, of the happening of any event of which it has knowledge as
a result of which the prospectus included in the Registration Statement,
as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the
circumstances then existing, and the Company shall use its best efforts
to prepare and file a curative amendment under Section 5(a);
(f) as promptly as practicable after becoming aware of such event,
notify each Investor who holds Registrable Securities being sold (or, in
the event of an underwritten offering, the managing underwriters) of the
issuance by the Commission of any stop order or other suspension of the
effectiveness of the Registration Statement at the earliest possible time
and take all lawful action to effect the withdrawal, recession or removal
of such stop order or other suspension;
(g) cooperate with the Investors to facilitate the timely
preparation and delivery of certificates for the Registrable Securities
to be offered pursuant to the Registration Statement and enable such
certificates for the Registrable Securities to be in such denominations
or amounts, as the case may be, as the Investors reasonably may request
and registered in such names as the Investors may request; and,
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within three (3) Trading Days after a Registration Statement which
includes Registrable Securities is declared effective by the Commission,
deliver and cause legal counsel selected by the Company to deliver to the
transfer agent for the Registrable Securities (with copies to the
Investors) an appropriate instruction and, to the extent necessary, an
opinion of such counsel;
(h) take all such other lawful actions reasonably necessary to
expedite and facilitate the disposition by the Investors of their
Registrable Securities in accordance with the intended methods therefor
provided in the prospectus which are customary for issuers to perform
under the circumstances;
(i) in the event of an underwritten offering, promptly include or
incorporate in a prospectus supplement or post-effective amendment to the
Registration Statement such information as the managers reasonably agree
should be included therein and to which the Company does not reasonably
object and make all required filings of such prospectus supplement or
post-effective amendment as soon as practicable after it is notified of
the matters to be included or incorporated in such Prospectus supplement
or post-effective amendment; and
(j) maintain a transfer agent and registrar for its Common Stock.
Section 6. INDEMNIFICATION.
(a) To the maximum extent permitted by law, the Company agrees to
indemnify and hold harmless the Investors and each person, if any, who
controls an Investor within the meaning of the Securities Act (each a
"Distributing Investor") against any losses, claims, damages or
liabilities, joint or several (which shall, for all purposes of this
Agreement, include, but not be limited to, all reasonable costs of
defense and investigation and all reasonable attorneys' fees and
expenses), to which the Distributing Investor may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement, or any related final
prospectus or amendment or supplement thereto, or arise out of or are
based upon the 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, however, that the Company will not be
liable in any such case to the extent, and only to the extent, that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in such Registration Statement, preliminary prospectus,
final prospectus or amendment or supplement thereto in reliance upon, and
in conformity with, written information furnished to the Company by the
Distributing Investor, its counsel, affiliates or any underwriter,
specifically for use in the preparation thereof. This indemnity agreement
will be in addition to any liability which the Company may otherwise
have.
(b) To the maximum extent permitted by law, each Distributing
Investor agrees that it will indemnify and hold harmless the Company, and
each officer and director of the Company or person, if any, who controls
the Company within the meaning of the Securities Act, against any losses,
claims, damages or liabilities (which shall, for all purposes of this
Agreement, include, but not be limited to, all reasonable costs of
defense and investigation and all reasonable attorneys' fees and
expenses) to which the Company or any such officer, director or
controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
any Registration Statement, or any related final prospectus or amendment
or supplement thereto, or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in such
EX 10.3 - 6
Registration Statement, final prospectus or amendment or supplement
thereto in reliance upon, and in conformity with, written information
furnished to the Company by such Distributing Investor, its counsel,
affiliates or any underwriter, specifically for use in the preparation
thereof. This indemnity agreement will be in addition to any liability
which the Distributing Investor may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action against such
indemnified party, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section
6, notify the indemnifying party in writing of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability which it may have to any
indemnified party except to the extent the failure of the indemnified
party to provide such written notification actually prejudices the
ability of the indemnifying party to defend such action. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate in, and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, assume the
defense thereof, subject to the provisions herein stated and after notice
from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable
to such indemnified party under this Section 6 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation,
unless the indemnifying party shall not pursue the action to its final
conclusion. The indemnified parties as a group shall have the right to
employ one separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall not be
at the expense of the indemnifying party if the indemnifying party has
assumed the defense of the action with counsel reasonably satisfactory to
the indemnified party unless (i) the employment of such counsel has been
specifically authorized in writing by the indemnifying party, or (ii) the
named parties to any such action (including any impleaded parties)
include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by its counsel that there may
be one or more legal defenses available to the indemnifying party
different from or in conflict with any legal defenses which may be
available to the indemnified party or any other indemnified party (in
which case the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable only for the reasonable fees and
expenses of one separate firm of attorneys for the indemnified party,
which firm shall be designated in writing by the indemnified party). No
settlement of any action against an indemnified party shall be made
without the prior written consent of the indemnified party, which consent
shall not be unreasonably withheld so long as such settlement includes a
full release of claims against the indemnified party.
Section 7. CONTRIBUTION. In order to provide for just and equitable
contribution under the Securities Act in any case in which (i) the indemnified
party makes a claim for indemnification pursuant to Section 6 hereof but is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that the express provisions of Section 6 hereof provide
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any indemnified party, then the Company and the
applicable Distributing Investor shall contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (which shall, for
all purposes of this Agreement, include, but not be limited to, all reasonable
costs of defense and investigation and all reasonable attorneys' fees and
expenses), in either such case (after contribution from others) on the basis of
relative fault as well as any other relevant equitable considerations. The
relative fault 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 on the one hand or the applicable Distributing Investor on the other
hand, and the parties'
EX 10.3 - 7
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Distributing Investor
agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 7. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this Section 7 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
Notwithstanding any other provision of this Section 7, in no event shall
any (i) Investor be required to undertake liability to any person under this
Section 7 for any amounts in excess of the dollar amount of the proceeds
received by such Investor from the sale of such Investor's Registrable
Securities (after deducting any fees, discounts and commissions applicable
thereto) pursuant to any Registration Statement under which such Registrable
Securities are registered under the Securities Act and (ii) underwriter be
required to undertake liability to any person hereunder for any amounts in
excess of the aggregate discount, commission or other compensation payable to
such underwriter with respect to the Registrable Securities underwritten by it
and distributed pursuant to such Registration Statement.
Section 8. NOTICES. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) hand delivered, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by facsimile, addressed as set forth in the
Purchase Agreement or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated in the
Purchase Agreement (if delivered on a business day during normal business hours
where such notice is to be received), or the first business day following such
delivery (if delivered other than on a business day during normal business hours
where such notice is to be received) or (b) on the first business day following
the date of sending by reputable courier service, fully prepaid, addressed to
such address, or (c) upon actual receipt of such mailing, if mailed. Either
party hereto may from time to time change its address or facsimile number for
notices under this Section 8 by giving at least ten (10) days' prior written
notice of such changed address or facsimile number to the other party hereto.
Section 9. ASSIGNMENT. This Agreement is binding upon and inures to the
benefit of the parties hereto and their respective heirs, successors and
permitted assigns. The rights granted the Investors under this Agreement may be
assigned to any purchaser of substantially all of the Registrable Securities (or
the rights thereto) from an Investor, as otherwise permitted by the Purchase
Agreement.
Section 10. ADDITIONAL COVENANTS OF THE COMPANY. The Company agrees that
at such time as it otherwise meets the requirements for the use of Securities
Act Registration Statement on Form S-3 for the purpose of registering the
Registrable Securities, it shall file all reports and information required to be
filed by it with the Commission in a timely manner and take all such other
action so as to maintain such eligibility for the use of such form.
Section 11. COUNTERPARTS/FACSIMILE. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but all of
which, when together shall constitute but one and the same instrument, and shall
become effective when one or more counterparts have been signed by
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each party hereto and delivered to the other parties. In lieu of the original, a
facsimile transmission or copy of the original shall be as effective and
enforceable as the original.
Section 12. REMEDIES. The remedies provided in this Agreement are
cumulative and not exclusive of any remedies provided by law. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their best efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction.
Section 13. CONFLICTING AGREEMENTS. The Company shall not enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the holders of Registrable Securities in this Agreement or otherwise
prevents the Company from complying with all of its obligations hereunder.
Section 14. HEADINGS. The headings in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
Section 15. GOVERNING LAW, ARBITRATION. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made in New York by persons domiciled in New York City and without
regard to its principles of conflicts of laws. Any dispute under this Agreement
shall be submitted to arbitration under the American Arbitration Association
(the "AAA") in New York City, New York, and shall be finally and conclusively
determined by the decision of a board of arbitration consisting of three (3)
members (hereinafter referred to as the "Board of Arbitration") selected as
according to the rules governing the AAA. The Board of Arbitration shall meet on
consecutive business days in New York City, New York, and shall reach and render
a decision in writing (concurred in by a majority of the members of the Board of
Arbitration) with respect to the amount, if any, which the losing party is
required to pay to the other party in respect of a claim filed. In connection
with rendering its decisions, the Board of Arbitration shall adopt and follow
the laws of the State of New York. To the extent practical, decisions of the
Board of Arbitration shall be rendered no more than thirty (30) calendar days
following commencement of proceedings with respect thereto. The Board of
Arbitration shall cause its written decision to be delivered to all parties
involved in the dispute. Any decision made by the Board of Arbitration (either
prior to or after the expiration of such thirty (30) calendar day period) shall
be final, binding and conclusive on the parties to the dispute, and entitled to
be enforced to the fullest extent permitted by law and entered in any court of
competent jurisdiction. The Board of Arbitration shall be authorized and is
hereby directed to enter a default judgment against any party failing to
participate in any proceeding hereunder within the time periods set forth in the
AAA rules. The non-prevailing party to any arbitration (as determined by the
Board of Arbitration) shall pay the expenses of the prevailing party, including
reasonable attorneys' fees, in connection with such arbitration. Any party shall
be entitled to obtain injunctive relief from a court in any case where such
relief is available. The non-prevailing party to any injunctive proceeding (as
determined by the court) shall pay the expenses of the prevailing party,
including reasonable attorney's fees, in connection with such injunctive
proceeding.
EX 10.3 - 9
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed, on the day and year first above written.
Dental/Medical Diagnostic Systems, Inc.
By: /S/ XXXXXX X. XXXXXXXXX
-----------------------------------
Xxxxxx X. Xxxxxxxxx, President
AMRO International, S.A.
By: /S/ X.X. XXXXXXXX
-----------------------------------
X.X. Xxxxxxxx, Director
The Endeavour Capital Fund, S.A.
By: /S/ XXXXXX XXXXXXXXX
-----------------------------------
Xxxxxx Xxxxxxxxx, Authorized
Signatory
Austinvest Anstalt Balzers
By: /S/ XXXXXX GRILL
-----------------------------------
Xx. Xxxxxx Grill, Authorized
Signatory
Esquire Trade & Finance, Inc.
By: /S/ XXXXXX XXXXXXX
-----------------------------------
Xxxxxx Xxxxxxx, Authorized
Signatory
EX 10.3 - 10
