EXHIBIT 10.41
RIGHTS AGREEMENT
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This Rights Agreement (the "Agreement") is made and entered
into as of this 17th day of August, 2007 by and among INTRAOP MEDICAL
CORPORATION, a Nevada corporation (the "Company"), the "Investors" named in that
certain Common Stock and Warrant Purchase Agreement of even date herewith by and
among the Company and the Investors (the "Purchase Agreement"), and the
"Existing Investors", "Insiders", "Officers and Directors" and "Other
Securityholders" named herein.
The parties hereby agree as follows:
1. Certain Definitions. Capitalized terms that are used but not defined
herein shall have the meaning assigned to them in the Purchase Agreement.
As used in this Agreement, the following terms shall have the following
meanings:
"Affiliate" means, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by, or is under common control
with, such Person.
"Board" means the board of directors of the Company.
"Business Day" means a day, other than a Saturday or Sunday, on which
banks in New York City are open for the general transaction of business.
"Common Stock" means the Company's common stock, par value $0.001 per
share.
"Effectiveness Date" means the date on which the Registration
Statement is declared effective by the SEC.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Existing Investors" means the Existing Investors identified in the
Purchase Agreement and any Affiliate or permitted transferee of any Existing
Investor who is a subsequent holder of any Registrable Securities.
"Holders" means the Investors, the Insiders, the Officers and
Directors, the Existing Investors and the Other Securityholders.
"Insiders" means the Insiders identified in the Purchase Agreement and
any Affiliate or permitted transferee of any Insider who is a subsequent holder
of any Registrable Securities.
"Investors" means the Investors identified in the Purchase Agreement
and any Affiliate or permitted transferee of any Investor who is a subsequent
holder of any Registrable Securities.
"Lacuna" means Lacuna Hedge Fund LLLP, an Investor.
"Lacuna Designees" means the designees of Lacuna for nomination to the
Board pursuant to Section 7 hereof, who shall initially be Xxxxxxxx Xxxxx,
Xxxxxx Xxxxxxx, Xxxx Xxxxxx and Xxxx Xxxxxxxx.
"Nasdaq" means The Nasdaq Stock Market, Inc.
"Officers and Directors" means the Officers and Directors identified in
the Purchase Agreement and any Affiliate or permitted transferee of any Investor
who is a subsequent holder of any Registrable Securities.
"Other Securityholders" means Xxxxxxxxx Capital LLC and MCR Capital
Corp. and any Affiliate or permitted transferee of any Other Securityholder who
is a subsequent holder of any Registrable Securities.
"Person" means an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.
"Prospectus" means the prospectus included in any Registration
Statement, 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 such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
"Register," "registered" and "registration" refer to a registration
made by preparing and filing a Registration Statement or similar document in
compliance with the Securities Act (as defined below), and the declaration or
ordering of effectiveness of such Registration Statement or document.
"Registrable Securities" means (i) the Shares, (ii) the Warrant Shares
and (iii) any other securities issued or issuable with respect to or in exchange
for Shares and the Warrant Shares, including shares issued upon any stock split,
stock dividend, recapitalization, subdivision or similar event, provided that a
security shall cease to be a Registrable Security upon (A) sale pursuant to a
Registration Statement or Rule 144 under the Securities Act; (B) such security
becoming eligible for sale by the Holders pursuant to Rule 144(k); or (C) the
ability of such Holder to sell all such Registrable Securities pursuant to Rule
144 in any three (3) month period; provided further that a security shall not be
considered a Registrable Security to the extent that it is the subject of an
agreement (other than this Agreement) between the Company and the holder thereof
to have such security registered under the Securities Act.
"Registration Statement" means any registration statement of the
Company filed under the Securities Act that covers the resale of any of the
Registrable Securities pursuant to the provisions of this Agreement, amendments
and supplements to such Registration Statement, including post-effective
amendments, all exhibits and all material incorporated by reference in such
Registration Statement.
"Required Holders" means the Holders holding, at the time the approval
of such Holders is sought, a majority of the Registrable Securities held by the
Holders.
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"Required Investors" means the Investors holding, at the time the
approval of such Investors is sought, a majority of the Registrable Securities
held by the Investors.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Shares" means the shares of Common Stock issued pursuant to the
Purchase Agreement.
"Staff" means the professional employees of the SEC.
"Warrant Shares" means the shares of Common Stock issuable upon
exercise of the Warrants.
"Warrants" means (i) the Investor Warrants, (ii) the January Bridge
Note Warrants, (iii) the Debenture Warrants, (iv) the Insider Warrants, (v) the
Officer and Director Warrants, (vi) the Xxxxxxxxx Warrant and (vii) the MCR
Capital Warrant.
2. Registration.
(a) Registration Statement. Within forty-five (45) days of the
request (the "Request") of the Required Holders (the "Filing Deadline"), the
Company shall prepare and file with the SEC a Registration Statement on Form
SB-2 (or such other Form now or hereafter available to the Company for such
registration) covering the resale of all the Registrable Securities. The
Registration Statement shall also cover to the extent allowable under the
Securities Act and the rules promulgated thereunder, such indeterminate number
of additional shares of Common Stock resulting from stock splits, stock
dividends or similar transactions with respect to the Registrable Securities.
The Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided in
accordance with Section 3(c) to the Holders and their counsel prior to its
filing or other submission.
(b) Expenses. The Company shall pay all expenses associated
with each registration, including filing and printing fees, the Company's
counsel and accounting fees and expenses and costs associated with clearing the
Registrable Securities for sale under applicable state securities laws and
listing fees, but excluding fees and expenses of counsel to the Holders and
discounts, commissions and fees of underwriters, selling brokers, dealer
managers or similar securities industry professionals with respect to the
Registrable Securities being sold, provided that, the Company shall pay the
reasonable fees and expenses of one (1) counsel for the Holders not to exceed
$25,000 incurred in connection with the preparation and filing of the
Registration Statement and review thereof prior to the Effectiveness Date (it
being understood and agreed that Magnetar Capital Master Fund, Ltd shall not be
represented by such counsel and shall instead be represented by its own
separate counsel in connection with such matters).
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(c) Effectiveness.
(i) The Company shall use commercially reasonable
efforts to have the Registration Statement declared effective as soon as
practicable. The Company shall notify the Holders by facsimile or electronic
mail as promptly as practicable, and in any event, within one (1) Business Day,
after any Registration Statement is declared effective and shall provide the
Holders with copies of any related Prospectus to be used in connection with the
sale or other disposition of the securities covered thereby.
(ii) Except as required by the provisions of this
Agreement, without the consent of the Required Holders, the Company shall not
file any registration statement, other than a registration statement relating to
(i) any employee benefit plan or securities issued pursuant to any employee
benefit plan (whether resale or otherwise) or (ii) corporate reorganization or
transaction under Rule 145 of the Securities Act, including any registration
statement related to the issuance or resale of securities issued in such
transaction. The restrictions set forth in this Section 2(c) shall terminate
three (3) months after all Registrable Securities have been registered.
3. Suspension.
(a) Subject to Section 3(b) below, in the event: (i) of any
request by the SEC or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement for amendments or
supplements to the Registration Statement or related prospectus or for
additional information so that the Registration Statement will not 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 not misleading or
otherwise fail to comply with the applicable rules and regulations of the
federal securities laws; (ii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose; (iii) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose (provided, that, considering the advice of counsel,
the Company reasonably believes that it must qualify in such jurisdiction); (iv)
of any event or circumstance that, considering the advice of counsel, the
Company reasonably believes necessitates the making of any changes in the
Registration Statement or related prospectus, or any document incorporated or
deemed to be incorporated therein by reference, so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or any omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
a related prospectus, it will not contain any untrue statement of a material
fact or any omission to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; or (v) that the Company reasonably
believes, considering the advice of counsel, that the Company is, in the absence
of a suspension described hereunder, required under state or federal securities
laws to disclose any corporate development, the disclosure of which could
reasonably be expected to have a material adverse effect upon the Company, its
stockholders, a potentially material transaction or event involving the Company,
or any negotiations, discussions or proposals directly relating thereto, then
the Company shall deliver a certificate in writing to each holder of Registrable
Securities (the "Suspension Notice") to the effect of the foregoing (but in no
event, without the prior written consent of a Holder, shall the Company disclose
to such Holder any of the facts or circumstances regarding any material
nonpublic information) and, upon receipt of such Suspension Notice, the Holder
will refrain from selling any Registrable Securities pursuant to the
Registration Statement (a "Suspension") until the Holder's receipt of copies of
a supplemented or amended prospectus prepared and filed by the Company or until
the Holder is advised in writing by the Company that the current prospectus may
be used and the holder has received copies of any additional or supplemental
filings that are incorporated or deemed incorporated by reference in any such
prospectus.
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(b) Notwithstanding the foregoing, the Company shall not
suspend any Registration Statement or related prospectus for more than thirty
(30) consecutive days or for a total of not more than ninety (90) days in any
twelve (12) month period (each a "Permitted Suspension" and together the
"Permitted Suspensions").
(c) The Company shall use commercially reasonable efforts to
terminate a Suspension as promptly as practicable after delivery of a Suspension
Notice to the Holders.
4. Company Obligations. The Company shall use commercially reasonable
efforts to effect the registration of the Registrable Securities in accordance
with the terms hereof, and pursuant thereto the Company shall, as expeditiously
as possible:
(a) use commercially reasonable efforts to cause such
Registration Statement to become effective and to remain continuously effective
for a period that will terminate upon the earlier of (i) the date on which all
Registrable Securities have been sold pursuant to the Registration Statement, as
amended from time to time, (ii) the date on which all Registrable Securities
covered by such Registration Statement may be sold pursuant to Rule 144 in a
three-month period and (iii) the three-year anniversary of the Effectiveness
Date (the "Effectiveness Period") and advise the Holders in writing when the
Effectiveness Period has expired;
(b) prepare and file with the SEC such amendments and
post-effective amendments to the Registration Statement and such supplements to
the Prospectus as may be necessary to keep the Registration Statement effective
for the period specified in Section 4(a) and to comply with the provisions of
the Securities Act and the Exchange Act with respect to the distribution of all
of the Registrable Securities covered thereby;
(c) provide copies to and permit counsel designated by the
Holders to review the Registration Statement and any amendments or supplements
thereto and any comments made by the Staff and the Company's responses thereto
not less than three (3) Business Days prior to its filing with the SEC or its
receipt from the SEC as applicable and shall duly consider comments made by such
counsel thereon;
(d) furnish to the Holders and their legal counsel (i)
promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company (but not later than two (2) Business Days after
the filing date, receipt date or sending date, as the case may be) one (1) copy
of any Registration Statement and any amendment thereto, each preliminary
prospectus and Prospectus and each amendment or supplement thereto, and each
letter written by or on behalf of the Company to the SEC or the Staff, and each
item of correspondence from the SEC or the Staff, in each case relating to such
Registration Statement (other than any portion of any thereof which contains
information for which the Company has sought confidential treatment), and (ii)
an electronic copy of a Prospectus, including a preliminary prospectus, and all
amendments and supplements thereto and such other documents as each Holder may
reasonably request in connection with the disposition of the Registrable
Securities owned by such Holder that are covered by the related Registration
Statement;
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(e) use commercially reasonable efforts to (i) prevent the
issuance of any stop order or other suspension of effectiveness and, (ii) if
such order is issued, obtain the withdrawal of any such order at the earliest
practicable time and to notify each Holder of the issuance of such an order and
the resolution thereof;
(f) prior to any public offering of Registrable Securities,
use commercially reasonable efforts to register or qualify or cooperate with the
Holders and their counsel in connection with the registration or qualification
of such Registrable Securities for offer and sale under the securities or blue
sky laws of such jurisdictions requested by the Holders and do any and all other
commercially reasonable acts or things necessary or advisable to enable the
distribution in such jurisdictions of the Registrable Securities covered by the
Registration Statement; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (i) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(f), (ii) subject itself to general taxation in any
jurisdiction where it would not otherwise be so subject but for this Section
3(f), or (iii) file a general consent to service of process in any such
jurisdiction;
(g) use commercially reasonable efforts to cause all
Registrable Securities covered by a Registration Statement to be listed on each
securities exchange, interdealer quotation system or other market on which
similar securities issued by the Company are then listed;
(h) immediately notify the Holders, at any time when a
Prospectus relating to Registrable Securities is required to be delivered under
the Securities Act, upon discovery that, or upon the happening of any event as a
result of which, the Prospectus included in a Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and at the
request of any such holder, promptly prepare and furnish to such holder an
electronic copy of a supplement to or an amendment of such Prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Registrable
Securities, such Prospectus shall not 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 not misleading in light of the circumstances then
existing;
(i) otherwise use commercially reasonable efforts to comply
with all applicable rules and regulations of the SEC under the Securities Act
and the Exchange Act, take such other actions as may be reasonably necessary to
facilitate the registration of the Registrable Securities hereunder, and make
available to its security holders, as soon as reasonably practicable upon
request, but not later than the Availability Date (as defined below), an
earnings statement covering a period of at least twelve (12) months, beginning
after the effective date of each Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act,
including Rule 158 promulgated thereunder (for the purpose of this subsection
3(i), "Availability Date" means the 45th day following the end of the fourth
fiscal quarter that includes the effective date of such Registration Statement,
except that, if such fourth fiscal quarter is the last quarter of the Company's
fiscal year, "Availability Date" means the 90th day after the end of such fourth
fiscal quarter); and
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(j) with a view to making available to the Holders the
benefits of Rule 144 (or its successor rule) and any other rule or regulation of
the SEC that may at any time permit the Holders to sell shares of Common Stock
to the public without registration, the Company covenants and agrees to: (i)
make and keep public information available, as those terms are understood and
defined in Rule 144, during the Effectiveness Period; (ii) file with the SEC in
a timely manner all reports and other documents required of the Company under
the Exchange Act; and (iii) furnish to each Holder upon request, as long as such
Holder owns any Registrable Securities, (A) a written statement by the Company
that it has complied with the reporting requirements of the Exchange Act, (B) a
copy of the Company's most recent Annual Report on Form 10-KSB or Quarterly
Report on Form 10-QSB, and (C) such other information as may be reasonably
requested in order to avail such Holder of any rule or regulation of the SEC
that permits the selling of any such Registrable Securities without
registration.
5. Obligations of the Holders.
(a) Each Holder shall furnish in writing to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it, as
shall be required to effect the registration of such Registrable Securities and
shall execute such documents in connection with such registration as the Company
may reasonably request. At least fifteen (15) days prior to the first
anticipated filing date of any Registration Statement, the Company shall notify
each Holder of the information the Company requires from such Holder if such
Holder elects to have any of the Registrable Securities included in the
Registration Statement. A Holder shall provide such information to the Company
at least ten (10) days prior to the first anticipated filing date of such
Registration Statement if such Holder elects to have any of the Registrable
Securities included in the Registration Statement.
(b) Each Holder, by its acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of a Registration
Statement hereunder, unless such Holder has notified the Company in writing of
its election to exclude all of its Registrable Securities from such Registration
Statement.
(c) Each Holder agrees that, upon receipt of any notice from
the Company of the commencement of a Suspension pursuant to Section 3, such
Holder will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities,
until the Holder's receipt of the supplemented or amended prospectus filed with
the SEC and until any related post-effective amendment is declared effective.
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6. Rights of Participation.
(a) Subsequent Offerings. So long as the Investors (together
with their Affiliates) continue to hold on a collective basis at least thirty
percent (30%) of the Registrable Securities acquired by them pursuant to the
Purchase Agreement (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like after the date hereof), subject to applicable
securities laws, each Investor shall have a right to participate in future
offerings by the Company by purchasing such Investor's pro rata share of all
Equity Securities (as defined below) that the Company may, from time to time,
propose to sell and issue after the date of this Agreement, other than the
Equity Securities excluded by Section 6(c) hereof. Each Investor's pro rata
share is equal to the ratio of (a) the total number of Shares and Warrant Shares
(including all Warrant Shares issuable upon exercise of outstanding Warrants) of
which such Investor and its Affiliates are deemed to be a holder to (b) the
total number of shares of the Company's outstanding Equity Securities, in each
case immediately prior to such issuance of Equity Securities. The term "Equity
Securities" shall mean (i) any Common Stock and (ii) any security convertible
into or exercisable or exchangeable for, with or without consideration, any
Common Stock (including any option to purchase such a convertible security).
(b) Exercise of Rights. If the Company proposes to issue any
Equity Securities (other than Equity Securities excluded pursuant to Section
6(c) below), it shall give each Investor written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Company proposes to issue the same. Each Investor shall have ten (10)
days from the receipt of such notice to agree to purchase up to its pro rata
share of the Equity Securities for the price and upon the terms and conditions
specified in the notice by giving written notice to the Company and stating
therein the quantity of Equity Securities to be purchased.
(c) Excluded Securities. The rights of participation
established by this Section 6 shall have no application to any of the following
Equity Securities:
(i) shares of Common Stock and/or options, warrants
or other Common Stock purchase rights and the Common Stock issued pursuant to
such options, warrants or other rights issued or to be issued after the date
hereof to employees, officers or directors of, or consultants or advisors to the
Company or any subsidiary, pursuant to stock purchase or stock option plans or
other arrangements that are approved by the Board;
(ii) stock issued or issuable pursuant to any rights
or agreements, options, warrants or convertible securities outstanding as of the
date of this Agreement (including any stock issued or issuable pursuant to the
Purchase Agreement or upon exercise of the Warrants); and stock issued pursuant
to any such rights or agreements granted after the date of this Agreement, so
long as the rights of participation established by this Section 6 were complied
with, waived, or were inapplicable pursuant to any provision of this Section 6
with respect to the initial sale or grant by the Company of such rights or
agreements;
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(iii) any Equity Securities issued for consideration
other than cash pursuant to a merger, consolidation, acquisition or similar
business combination;
(iv) any Equity Securities issued in connection with
any stock split, stock dividend or recapitalization by the Company;
(v) any Equity Securities issued pursuant to any
equipment loan or leasing arrangement, real property leasing arrangement, or
debt financing from a bank or similar financial or lending institution;
(vi) any Equity Securities issued in connection with
strategic transactions involving the Company and other entities, including,
without limitation (i) joint ventures, manufacturing, marketing or distribution
arrangements or (ii) technology transfer or development arrangements; and
(vii) any Equity Securities that are sold by the
Company to the public in an underwritten offering.
(e) Affiliates. Each Investor may assign its rights to
participate under this Section 6 to any Affiliate of such Investor.
7. Nomination of the Lacuna Designees. So long as the Investors
(together with their Affiliates) continue to hold on a collective basis at least
fifty percent (50%) of the Registrable Securities acquired by them pursuant to
the Purchase Agreement (as adjusted for any stock dividends, combinations,
splits, recapitalizations and the like after the date hereof), each of the
Holders shall vote all of his, her or its shares of the Company's capital stock
having voting power (and any other shares of capital stock over which he, she or
it exercised voting control), in connection with the election of directors to
the Board and to take such other actions as are reasonably necessary so as to
fix the number of directors at seven and to elect and continue in office as
directors each of the Lacuna Designees. If any Lacuna Designee is unable or
unwilling to continue to serve on the Board, the Investors shall designate a
different nominee who, subject to the approval by the Board, acting reasonably
in the exercise of their fiduciary duties, consistent with their nomination
procedures, shall thereafter be deemed, for the purposes of this Agreement, to
be an Lacuna Designee. The Board shall fill any vacancy created by the
resignation, removal or death of a director nominated pursuant to this Section 7
with an Lacuna Designee, as determined pursuant to this Section 7. Each Lacuna
Designee shall be entitled to serve on all committees of the Board (subject to
the applicable committee charter and any applicable requirements of the SEC,
Nasdaq or OTC Bulletin Board and after giving effect to the Company's policies
on director independence). Notwithstanding the foregoing, the provisions of this
Section 7 shall not apply to Magnetar Capital Master Fund, Ltd, and,
accordingly, Magnetar Capital Master Fund, Ltd shall have no obligations under
this Section 7.
8. Short Sales. Each Holder hereby agrees with the Company that such
Holder shall not make any short sale of any Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock of the Company
until the second anniversary of the date of this Agreement.
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9. Indemnification.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the fullest extent permitted by law, the Holders
and their respective directors, officers, employees, agents, brokers, investment
advisors and employees of each of them, stockholders and each Person who
controls any Holder (within the meaning of the Securities Act) and the officers,
directors, agents and employees of each such controlling person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities and expense (including, without limitation, reasonable
attorney fees) resulting from or which arise out of or are based up any untrue
statement or alleged untrue statement of a material fact or any omission or
alleged omission of a material fact required to be stated in the Registration
Statement or Prospectus or preliminary prospectus or amendment or supplement
thereto or necessary to make the statements therein not misleading and will
reimburse each Holder and their respective directors, officers, employees,
agents, brokers, investment advisors and employees of each of them, stockholders
or controlling Persons for any legal and other expenses reasonably incurred as
such expenses are reasonably incurred by such Person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, however, that the Company shall
not be liable in any such case if and to the extent that (i) 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 so made in conformity
with information furnished by a Holder in writing specifically for use in such
Registration Statement or Prospectus or (ii) in the case of an event described
in Section 3, the use by such Holder of an outdated or defective prospectus
after the Company has delivered to such Holder a Suspension Notice and prior to
delivery by the Company to such Holder of a supplemented or amended prospectus
prepared and filed by the Company or until the Holder is advised in writing by
the Company that the current prospectus may be used.
(b) Indemnification by the Holders. Each Holder agrees,
severally but not jointly, to indemnify and hold harmless, to the fullest extent
permitted by law, the Company, its directors, officers, employees, agents,
brokers, investment advisors and employees of each of them, stockholders and
each Person who controls the Company (within the meaning of the Securities Act)
and the officers, directors, agents and employees of each such controlling
person, to the fullest extent permitted by applicable law, from and against any
and all losses, claims, damages, liabilities and expense (including reasonable
attorney fees) resulting from or which arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact or any omission or
alleged omission of a material fact required to be stated in the Registration
Statement or Prospectus or preliminary prospectus or amendment or supplement
thereto or necessary to make the statements therein not misleading, to the
extent, but only to the extent that (i) such untrue statement or omission or
alleged statement or omission is contained in any information furnished in
writing by such Holder to the Company specifically for inclusion in such
Registration Statement or Prospectus or amendment or supplement thereto or (ii)
in the case of an event described in Section 3, the use by such Holder of an
outdated or defective prospectus after the Company has delivered to such Holder
a Suspension Notice and prior to delivery by the Company to such Holder of a
supplemented or amended prospectus prepared and filed by the Company or until
the Holder is advised in writing by the Company that the current prospectus may
be used, and shall reimburse the Company and its directors, officers, employees,
agents, brokers, investment advisors and employees of each of them, stockholders
or controlling Persons for any legal and other expenses reasonably incurred as
such expenses are reasonably incurred by such Person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action. In no event shall the liability of a
Holder be greater in amount than the dollar amount of the proceeds (net of all
expense paid by such Holder in connection with any claim relating to this
Section 9 and the amount of any damages such Holder has otherwise been required
to pay by reason of such untrue statement or omission or alleged untrue
statement or omission) received by such Holder upon the sale of the Registrable
Securities included in the Registration Statement giving rise to such
indemnification obligation.
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(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder shall (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided that any
Person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such Person unless (a)
the indemnifying party has agreed to pay such fees or expenses, or (b) the
indemnifying party shall have failed to assume the defense of such claim within
ten (10) days after written notice thereof and employ counsel reasonably
satisfactory to such Person or (c) in the reasonable judgment of any such
Person, considering the advice of counsel, a conflict of interest exists between
such Person and the indemnifying party with respect to such claims (in which
case, if the Person notifies the indemnifying party in writing that such Person
elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such Person); and provided, further, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations hereunder, except to the extent that such
failure to give notice shall materially adversely affect the indemnifying party
in the defense of any such claim or litigation. The indemnifying party shall not
be liable for any settlement hereunder effected without its written consent,
which shall not be unreasonably withheld or delayed. It is understood that the
indemnifying party shall not, in connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more than one additional firm of
attorneys at any time for all such indemnified parties. No indemnifying party
shall, except with the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or litigation.
(d) Contribution. If for any reason the indemnification
provided for in the preceding paragraphs (a) and (b) is unavailable to an
indemnified party or insufficient to hold it harmless, other than as expressly
specified therein, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or liability in such proportion as is appropriate to reflect the relative fault
of the indemnified party and the indemnifying party, as well as any other
relevant equitable considerations. 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 not guilty of such fraudulent
misrepresentation. In no event shall the contribution obligation of a holder of
Registrable Securities be greater in amount than the dollar amount of the
proceeds (net of all expenses paid by such holder in connection with any claim
relating to this Section 9 and the amount of any damages such holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the sale of the
Registrable Securities giving rise to such contribution obligation.
11
10. Miscellaneous.
(a) Amendments and Waivers. This Agreement may be amended and
the observance of any term of this Agreement waived only with the written
consent of the Company and the Required Holders (which shall include the
Required Investors).
(b) Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal delivery,
then such notice shall be deemed given upon such delivery, (ii) if given by
facsimile or electronic mail, then such notice shall be deemed given upon
receipt of confirmation of complete transmittal, (iii) if given by mail, then
such notice shall be deemed given upon the earlier of (A) receipt of such notice
by the recipient or (B) three (3) days after such notice is deposited in first
class mail, postage prepaid, and (iv) if given by an internationally recognized
overnight air courier, then such notice shall be deemed given one (1) Business
Day after delivery to such carrier. All notices shall be addressed to the party
to be notified at the address as follows, or at such other address as such party
may designate by ten (10) days' advance written notice to the other party:
If to the Company:
Intraop Medical Corporation
000 Xxx Xxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx, Xxxxxxxx, Xxxxxx, Xxxxxx & Xxxx, LLP
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx
Facsimile: (000) 000-0000
If to the Holders, to the addresses set forth on the
Schedule of Purchasers or the signature pages hereto, as applicable, with a copy
to:
12
Xxxxxx Godward Kronish LLP
000 Xxxxxxxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
(c) Assignments and Transfers by Holders. The provisions of
this Agreement shall be binding upon and inure to the benefit of the Holders and
their respective successors and assigns. A Holder may transfer or assign, in
whole or from time to time in part, to one or more Persons its rights hereunder
in connection with the transfer of Registrable Securities by such Holder to such
Person, provided, that, such Holder complies with all laws applicable thereto
and provides written notice of assignment to the Company promptly (and, in no
event, no later than five (5) Business Days) after such assignment is effected,
and provided, further, that the right of the Investors to have their designees
nominated to the Board shall not be transferred or assigned without the prior
written consent of the Company, which shall be at the Company's sole discretion.
(d) Assignments and Transfers by the Company. This Agreement
may not be assigned by the Company (whether by operation of law or otherwise)
without the prior written consent of the Required Holders (which shall include
the Required Investors), provided, however, that the Company may assign its
rights and delegate its duties hereunder to any surviving or successor
corporation in connection with a merger or consolidation of the Company with
another corporation, or a sale, transfer or other disposition of all or
substantially all of the Company's assets to another corporation, without the
prior written consent of the Required Holders, after notice duly given by the
Company to each Holder.
(e) Benefits of the Agreement. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
(f) Counterparts; Faxes. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement may
also be executed via facsimile or PDF, which shall be deemed an original.
(g) Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(h) Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provisions hereof prohibited or
unenforceable in any respect.
13
(i) Further Assurances. The parties shall execute and deliver
all such further instruments and documents and take all such other actions as
may reasonably be required to carry out the transactions contemplated hereby and
to evidence the fulfillment of the agreements herein contained.
(j) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
(k) Governing Law; Consent to Jurisdiction; Waiver of Jury
Trial. This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of Delaware without regard to the choice of law
principles thereof. Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the courts of the State of California located in Santa
Xxxxx County and the United States District Court for the Northern District of
California for the purpose of any suit, action, proceeding or judgment relating
to or arising out of this Agreement and the transactions contemplated hereby.
Service of process in connection with any such suit, action or proceeding may be
served on each party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of the parties
hereto irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
(l) Termination of Prior Registration Rights Agreements. The
Company and each Holder hereby agree that this Agreement supersedes and replaces
all other agreements that require the Company to register any securities of the
Company held by any Holder under the Securities Act, which shall include those
certain Registration Rights Agreements dated August 31, 2005, October 25, 2005
and January 10, 2007 by and among the Company and the other parties thereto,
which other agreements are hereby terminated in their entirety and of no further
force or effect.
14
(m) Independent Nature of Obligations. The obligations of each
Holder under this Agreement are several and not joint with the obligations of
any other Holder, and no Holder shall be responsible in any way for the
performance of the obligations of any other Holder under this Agreement. Nothing
contained herein, and no action taken by any Holder pursuant hereto, shall be
deemed to constitute the Holders as a partnership, an association, a joint
venture or any other kind of group or entity, or create a presumption that the
Holders are in any way acting in concert or as a group or entity with respect to
such obligations or the transactions contemplated hereby or any matters, and the
Company acknowledges that the Holders are not acting in concert or as a group
with respect to such obligations or the transactions contemplated by this
Agreement. Each Holder shall be entitled to independently protect and enforce
its rights, including, without limitation, the rights arising out of this
Agreement, and it shall not be necessary for any other Holder to be joined as an
additional party in any proceeding for such purpose. The use of a single
agreement with respect to the obligations of the Company contained herein was
solely in the control of the Company, not the action or decision of any Holder,
and was done solely for the convenience of the Company and not because it was
required or requested to do so by any Holder. It is expressly understood and
agreed that each provision contained in this Agreement is between the Company
and a Holder, solely, and not between the Company and the Holders collectively
and not between and among Holders.
(Signatures follow)
15
IN WITNESS WHEREOF, the parties have executed this Rights
Agreement as of the date first above written.
The Company: INTRAOP MEDICAL CORPORATION
By: /s/ Xxxxxx X. Goer
-------------------------------------
Name: Xxxxxx X. Goer
Title: President and CEO
The Investors: LACUNA HEDGE FUND LLLP
By: /s/ X. X. Xxxxxxx
-------------------------------------
Name: X. X. Xxxxxxx
Title: Managing Director
LACUNA VENTURE FUND LLLP
By: Lacuna Ventures GP LLLP
Its General Partner
By: Lacuna, LLC
Its General Partner
By: /s/ XX Xxxxxxx
-------------------------------------
XX Xxxxxxx, Managing Director
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxx Xxxxxxx
-----------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxx Xxxxx
-----------------------------------------
Xxxxxx Xxxxxxx Xxxxx
/s/ Xxxxxx Xxxxx
-----------------------------------------
Xxxxxx Xxxxx
Xx. Xxxx and Xxx. Xxxxxx Xxxxxxxxx,
JTWROS
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------
Xxxx Xxxxxxxxx
By: /s/ Xxxxxx Xxxxxxxxx
-------------------------------------
Xxxxxx Xxxxxxxxx
/s/ Xxxxxx XxXxxxxx
-----------------------------------------
Xxxxxx XxXxxxxx
PRECEPT CAPITAL MASTER FUND, G.P.
By: /s/ D. Xxxxx Xxxxx
-------------------------------------
Name: D. Xxxxx Xxxxx
-----------------------------------
Its: Managing Member
------------------------------------
ELLERPHUND VENTURES II, LP
By: /s/ Xxxx Ever
-------------------------------------
Name: Xxxx Ever
-----------------------------------
Its: Managing Member
------------------------------------
SANDOR CAPITAL MASTER FUND, L.P.
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Name: Xxxx X. Xxxxx
-----------------------------------
Its: Manager
------------------------------------
VMG HOLDINGS II, LLC
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-----------------------------------
Its: Principal
------------------------------------
THE XXX AND XXXXXX XXX XXXXX
2000 LIVING TRUST
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Xxxx Xxxxxxx, Trustee
E.U. CAPITAL VENTURE, INC.
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxx
-----------------------------------
Its: Managing Director
------------------------------------
The Insiders: /s/ M. Xxxx Xxxxxxx
-----------------------------------------
X. Xxxx Xxxxxxx
XXXXXXX FAMILY TRUST
DATED AUGUST 30, 2005
By: /s/ Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
Title: Trustee
/s/ Xxxxx Xxxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxx
XXXXXX XXXXXXX REVOCABLE TRUST
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Trustee
ADMEDICO APS.
By: /s/ Rand Chr-Kuaergaard-Xxxxxx
-------------------------------------
Name: Rand Chr-Kuaergaard-Xxxxxx
Title: CEO
/s/ Xxxxx Xxxxxx
-----------------------------------------
Xxxxx Xxxxxx
E. U. CAPITAL VENTURE, INC.
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
/s/ Xxxxxx X. Goer
-----------------------------------------
Xxxxxx X. Goer
XXXXXX X. GOER AND
HENCI L. GOER 1989 FAMILY TRUST
By: /s/ Xxxxxx X. Goer
-------------------------------------
Name: Xxxxxx X. Goer
Title: Trustee
TOMOVATION GMBH
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxx
Title: CEO
AFFECT STRATEGIES, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: President
/s/ X. Xxxxx
-----------------------------------------
Xxxxxxx Xxxxx
EMERGING MARKETS CONSULTING, LLC
By: /s/ Xxxxx X. Xxxxxxx, III
-------------------------------------
Name: Xxxxx X. Xxxxxxx, III
Title: CEO
SCHONBERG RESEARCH CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: CEO
/s/ Xxxxxxx Xxxxx
-----------------------------------------
Xxxxxxx Xxxxx
THE O GROUP
By: /s/ Xxxx X. Schizzman
-------------------------------------
Name: Xxxx X. Shizzman
Title: President and CEO
/s/ Xxxx Xxxxxx Xxxxx
-----------------------------------------
Xxxx Xxxxxx Xxxxx
The Officers and Directors: /s/ Xxxxx Xxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxx
/s/ M. Xxxx Xxxxxxx
-----------------------------------------
M. Xxxx Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxx
-----------------------------------------
Xxxx X. Xxxxxx
/s/ Xxxxxx Xxxx
-----------------------------------------
Xxxxxx Xxxx
The Existing Investors: BUSHIDO MASTER CAPITAL FUND L.P.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Director
GAMMA OPPORTUNITY CAPITAL PARTNERS, LP
CLASS A
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: As Agent
GAMMA OPPORTUNITY CAPITAL PARTNERS, LP
CLASS C
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: As Agent
DOLPHIN OFFSHORE PARTNERS, L.P.
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: General Partner
ALPHA CAPITAL ANSTAHT
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Director
CRESTVIEW CAPITAL MASTER, LLC
By: Crestview Capital Partners, LLC
Its Sole Manager
By: /s/ Xxxxxx Xxxx
-------------------------------------
Name: Xxxxxx Xxxx
Title: Director
SAMIR FINANCIAL, LLC
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Manager
MAGNETAR CAPITAL MASTER FUND, LTD.
By: /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: Counsel
ABS SOS-PLUS PARTNERS LTD.
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: As Agent
REGENMACHER HOLDINGS, LTD.
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: As Agent
The Other Securityholders: XXXXXXXXX CAPITAL LLC
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Managing Member
MCR CAPITAL CORP.
By: /s/ Xxxxxxx X. Xxx
-------------------------------------
Name: Xxxxxxx X. Xxx
Title: President
