Exhibit 4.4
REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT, made as of April __, 2005, by and
between In Veritas Medical Diagnostics, Inc., a Colorado corporation (the
"Company"), and the person whose name appears on the signature page attached
hereto (the "Holder") issued in the private placement offering.
WHEREAS, the parties are entering into a Subscription Agreement (the
"Subscription Agreement"), in connection with the proposed private placement of
up to $2,200,000 of the Company's units ("Units") at a price of $.65 per Unit.
The Units consists of one share of 5% convertible preferred stock of the
Company, $.001 par value (the "Shares"), and one warrant (the "Warrants") to
purchase one share of common stock;
WHEREAS, the placement agent has the option to sell up to an additional
$440,000 of Units at $.65 per Unit (the "Over Allotment Units");
WHEREAS, each purchaser of a Unit will receive a warrant (the "Unit
Warrant") to purchase an additional Unit, which Unit Warrant shall be
exercisable at $.65 per Unit for a period of one hundred eighty (180) days from
the effective date of the Registration Statement (the "Effective Date") covering
the Series B Preferred Shares and common stock underlying the Warrants. The
Company may compel the investors to exercise the Unit Warrants in the event that
the average closing price for the Company's common stock for any five trading
day period following the Effective Date, is greater than $.78.
WHEREAS, pursuant to the terms of and in order to induce the Holder to
enter into a certain subscription agreement dated the date hereof between the
Company and the Holders (the "Subscription Agreement") to purchase the Units,
the Company and the Holder have agreed to enter into this Agreement; and
WHEREAS, it is intended by the Company and the Holder that this Agreement
shall become effective immediately upon the acquisition by the Holder of the
Units;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Company hereby agrees as follows:
1. Mandatory Registration.
(a) Filing of Form SB-2 Registration Statements. Subject to the terms
and conditions of this Agreement, the Company shall file with the SEC
within thirty (30) days following the earlier of the closing of the
offering or the Termination Date, a registration statement on Form SB-2
under the Securities Act (the "Registration Statement") for the
registration of the resale by the Holder of the of the common stock to be
issued upon conversion of the Shares, the common stock underlying the
Warrants, the common stock to be issued upon conversion of the Shares
underlying the Warrant Units, the common stock underlying the Warrants
underlying the Warrant Units, the common stock to be issued upon conversion
of the Shares underlying the Over Allotment Units and the common stock
underlying the Warrants underlying the Over Allotment Shares (referred to
as the "Registrable Securities").
(b) Effectiveness of the Registration Statement. The Company shall use
its reasonable best efforts to have the Registration Statement declared
effective by the SEC by no later than one hundred and twenty (120) days
after the earlier of (i) the closing of the offering or (ii) the
termination date, and to insure that the Registration Statement remains in
effect for the period specified in Section 3(a), subject to the terms and
conditions of this Agreement.
(c) Failure to File or Obtain Effectiveness of Registration
Statements. In the event the Company fails for any reason to file or to
obtain the effectiveness of a Registration Statement within the time
periods set forth in Sections 1(a) and 1(b), then the Company will make pro
rata payments to the Holder, as liquidated damages and not as a penalty, in
an amount equal to 2.0% of the aggregate amount invested by the Holder for
each 30-day period or pro rata for any portion thereof following the date
by which such Registration Statement should have been filed or decaled
effective. Such payments shall be in partial compensation to the Holder,
and shall not constitute the Holder's exclusive remedy for such events.
Such payments shall be made to each Investor in cash.
(d) The parties hereto acknowledge and agree that the sums payable
under Sections 1(c) or 1(d) above shall constitute liquidated damages and
not penalties. The parties further acknowledge that (a) the amount of loss
or damages likely to be incurred is incapable or is difficult to precisely
estimate, (b) the amounts specified in such Sections bear a reasonable
proportion and are not plainly or grossly disproportionate to the probable
loss likely to be incurred in connection with any failure by the Company to
obtain or maintain the effectiveness of a Registration Statement, (c) one
of the reasons for the parties reaching an agreement as to such amounts was
the uncertainty and cost of litigation regarding the question of actual
damages, and (d) the parties are sophisticated business parties and have
been represented by sophisticated and able legal and financial counsel and
negotiated this Agreement at arm's length.
2. Cooperation with Company. The Holder will cooperate with the Company in
all respects in connection with this Agreement, including, timely supplying all
information reasonably requested by the Company and executing and returning all
documents reasonably requested in connection with the registration and sale of
the Registrable Securities.
3. Registration Procedures. If and whenever the Company is required by any
of the provisions of this Agreement to use its best efforts to effect the
registration of any of the Registrable Securities under the 1933 Act, the
Company shall (except as otherwise provided in this Agreement), as expeditiously
as possible:
a. prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement and shall use its best efforts to
cause such registration statement to become effective and remain effective
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until earlier of (i) two years from the date of issuance of the Warrants,
(ii) the date that none of the Registrable Securities are or may become
issued and outstanding, (iii) the date that all of the Registrable
Securities have been sold, (iv) the date the investors in the Offering
receive an opinion of counsel to the Company, which counsel shall be
reasonably acceptable to the investors in the Offering, that the securities
may be sold under the provisions of Rule 144 without limitation as to
volume, or (v) all Registrable Securities have been otherwise transferred
to persons who may trade such shares without restriction under the Act, and
the Company has delivered a new certificate or other evidence of ownership
for such securities not bearing a restrictive legend.
b. prepare and file with the Commission such amendments and
supplements to such 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 1933 Act with
respect to the sale or other disposition of all securities covered by such
registration statement whenever the Holder of such securities 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 of the Commission);
c. furnish to the Holder such numbers of copies of a summary
prospectus or other prospectus, including a preliminary prospectus or any
amendment or supplement to any prospectus, in conformity with the
requirements of the 1933 Act, and such other documents, as such Holder may
reasonably request in order to facilitate the public sale or other
disposition of the securities owned by such Holder;
d. use its best efforts to register and qualify the securities covered
by such registration statement under such other securities or blue sky laws
of such jurisdictions as each Holder shall reasonably request, and do any
and all other acts and things which may be necessary or advisable to enable
such Holder to consummate the public sale or other disposition in such
jurisdiction of the securities owned by such Holder, except that the
Company shall not for any such purpose be required to qualify to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified or to file therein any general consent to service of process;
e. use its best efforts to list such securities on any securities
exchange on which any securities of the Company is then listed, if the
listing of such securities is then permitted under the rules of such
exchange;
f. enter into and perform its obligations under an underwriting
agreement, if the offering is an underwritten offering, in usual and
customary form, with the managing underwriter or underwriters of such
underwritten offering;
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g. notify the Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto
covered by such registration statement is required to be delivered under
the 1933 Act, of the happening of any event of which it has knowledge as a
result of which the prospectus included in such 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
h. furnish, at the request of the Holder on the date such Registrable
Securities are delivered to the underwriters for sale pursuant to such
registration or, if such Registrable Securities are not being sold through
underwriters, on the date the registration statement with respect to such
Registrable Securities becomes effective, (i) an opinion, dated such date,
of the counsel representing the Company for the purpose of such
registration, addressed to the underwriters, if any, and to the Holder
making such request, covering such legal matters with respect to the
registration in respect of which such opinion is being given as the Holder
of such Registrable Securities may reasonably request and are customarily
included in such an opinion and (ii) letters, dated, respectively, (1) the
effective date of the registration statement and (2) the date such
Registrable Securities are delivered to the underwriters, if any, for sale
pursuant to such registration from a firm of independent certified public
accountants of recognized standing selected by the Company, addressed to
the underwriters, if any, and to the Holder making such request, covering
such financial, statistical and accounting matters with respect to the
registration in respect of which such letters are being given as the Holder
of such Registrable Securities may reasonably request and are customarily
included in such letters.
4. Expenses. All expenses incurred in any registration of the Holder's
Registrable Securities under this Agreement shall be paid by the Company,
including, without limitation, printing expenses, fees and disbursements of
counsel for the Company, expenses of any audits to which the Company shall agree
or which shall be necessary to comply with governmental requirements in
connection with any such registration, all registration and filing fees for the
Holder's Registrable Securities under federal and State securities laws, and
expenses of complying with the securities or blue sky laws of any jurisdictions;
provided, however, the Company shall not be liable for (a) any discounts or
commissions to any underwriter; (b) any stock transfer taxes incurred with
respect to Registrable Securities sold in the Offering or (c) the fees and
expenses of counsel for any Holder, provided that the Company will pay the costs
and expenses of Company counsel when the Company's counsel is representing any
or all selling security holders.
5. Indemnification. In the event any Registrable Securities are included in
a registration statement pursuant to this Agreement:
a. Company Indemnity. Without limitation of any other indemnity
provided to the Holder, either in connection with the Offering or
otherwise, to the extent permitted by law, the Company shall indemnify and
hold harmless the Holder, the affiliates, officers, directors and partners
of each Holder, any underwriter (as defined in the 0000 Xxx) for such
Holder, and each person, if any, who controls such Holder or underwriter
(within the meaning of the 1933 Act or the Securities Exchange Act of 1934
(the "Exchange Act"), against any losses, claims, damages or liabilities
(joint or several) to which they may become subject under the 1933 Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
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(collectively a "Violation"): (i) any alleged untrue statement of a
material fact contained in such registration statement including any
preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the alleged omission to state
therein a material fact required to be stated therein, or necessary to make
the statements therein, (iii) any violation or alleged violation by the
Company of the 1933 Act, the Exchange Act, or (iv) any state securities law
or any rule or regulation promulgated under the 1933 Act, the Exchange Act
or any state securities law, and the Company shall reimburse each such
Holder, affiliate, officer or director or partner, underwriter or
controlling person for any legal or other expenses incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be
liable to the Holder in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon a
violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such
registration by any such Holder or any other officer, director or
controlling person thereof.
x. Xxxxxx Indemnity. The Holder shall indemnify and hold harmless the
Company, its affiliates, its counsel, officers, directors and
representatives, any underwriter (as defined in the 0000 Xxx) and each
person, if any, who controls the Company or the underwriter (within the
meaning of the 1933 Act or liabilities (joint or several) to which they may
become subject under the 1933 Act, the Exchange Act or any state securities
law, and the Company shall reimburse each such Holder, affiliate, officer
or director or partner, underwriter or controlling person for any legal or
other expenses incurred by them in connection with investigating or
defending any loss, claim, damage, liability or action; insofar as such
losses, claims, damages or liabilities (or actions and respect thereof)
arise out of or are based upon any statements or information provided by
such Holder to the Company in connection with the offer or sale of
Registrable Securities.
c. Notice; Right to Defend. Promptly after receipt by an indemnified
party under this Section 5 of notice of the commencement of any action
(including any governmental action), such indemnified party shall, if a
claim in respect thereof is to be made against any indemnifying party under
this Section 5 deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in and if the indemnifying party agrees in writing that it will
be responsible for any costs, expenses, judgments, damages and losses
incurred by the indemnified party with respect to such claim, jointly with
any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party,
if the indemnified party reasonably believes that representation of such
indemnified party by the counsel retained by the indemnifying party would
be inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel in
such proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action shall
relieve such indemnifying party of any liability to the indemnified party
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under this Agreement only if and to the extent that such failure is
prejudicial to its ability to defend such action, and the omission so to
deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under
this Agreement.
d. Contribution. If the indemnification provided for in this Agreement
is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such loss,
liability, claim, damage or expense in such proportion as is appropriate to
reflect the indemnified party on the other hand in connection with the
statements or omissions which resulted in such loss, liability, claim,
damage or expense as well as any other relevant equitable considerations.
The relevant fault of the indemnifying party and the indemnified party
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or
by the indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. Notwithstanding the foregoing, the amount the Holder shall be
obligated to contribute pursuant to the Agreement shall be limited to an
amount equal to the proceeds to such Holder of the Registrable Securities
sold pursuant to the registration statement which gives rise to such
obligation to contribute (less the aggregate amount of any damages which
the Holder has otherwise been required to pay in respect of such loss,
claim, damage, liability or action or any substantially similar loss,
claim, damage, liability or action arising from the sale of such
Registrable Securities).
e. Survival of Indemnity. The indemnification provided by this
Agreement shall be a continuing right to indemnification and shall survive
the registration and sale of any Registrable Securities by any person
entitled to indemnification hereunder and the expiration or termination of
this Agreement.
6. Remedies.
a. Time is of Essence. The Company agrees that time is of the essence
of each of the covenants contained herein and that, in the event of a
dispute hereunder, this Agreement is to be interpreted and construed in a
manner that will enable the Holders to sell their Registrable Securities as
quickly as possible after such Holders have indicated to the Company that
they desire their Registrable Securities to be registered. Any delay on the
part of the Company not expressly permitted under this Agreement, whether
material or not, shall be deemed a material breach of this Agreement.
b. Remedies Upon Default or Delay. The Company acknowledges the breach
of any part of this Agreement may cause irreparable harm to a Holder and
that monetary damages alone may be inadequate. The Company therefore agrees
that the Holder shall be entitled to injunctive relief or such other
applicable remedy as a court of competent jurisdiction may provide. Nothing
contained herein will be construed to limit a Holder's right to any
remedies at law, including recovery of damages for breach of any part of
this Agreement.
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7. Notices.
a. All communications under this Agreement shall be in writing and
shall be mailed by first class mail, postage prepaid, or telegraphed or
telexed with confirmation of receipt or delivered by hand or by overnight
delivery service,
b. If to the Company, at:
In Veritas Medical Diagnostics, Inc.
Attn: Xxxx Xxxxxx, President and CEO
Xxx Xxxxx Xxxxx
Xxxxxxxxx Xxxxxxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx XX0 0XX
or at such other address as it may have furnished in writing to the
Holders of Registrable Securities at the time outstanding, or
c. if to the Holder of any Registrable Securities, to the address of
such Holder as it appears in the stock ledger of the Company.
d. Any notice so addressed, when mailed by registered or certified
mail shall be deemed to be given three days after so mailed, when
telegraphed or telexed shall be deemed to be given when transmitted, or
when delivered by hand or overnight shall be deemed to be given when
delivered.
8. Successors and Assigns. Except as otherwise expressly provided herein,
this Agreement shall inure to the benefit of and be binding upon the successors
and permitted assigns of the Company and each of the Holders.
9. Amendment and Waiver. This Agreement may be amended, and the observance
of any term of this Agreement may be waived, but only with the written consent
of the Company and the Holder. No delay on the part of any party in the exercise
of any right, power or remedy shall operate as a waiver thereof, nor shall any
single or partial exercise by any party of any right, power or remedy preclude
any other or further exercise thereof, or the exercise of any other right, power
or remedy.
10. Counterparts. One or more counterparts of this Agreement may be signed
by the parties, each of which shall be an original but all of which together
shall constitute one and same instrument.
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11. Governing Law. This Agreement shall be construed in accordance with and
governed by the internal laws of the State of New York, without giving effect to
conflicts of law principles.
12. Invalidity of Provisions. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected there.
13. Headings. The headings in this Agreement are for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.
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IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
___ day of April, 2005.
IN VERITAS MEDICAL DIAGNOSTICS, INC.
By:
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By:
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