REGISTRATION RIGHTS AGREEMENT
EXHIBIT
10.2
This
Registration Rights Agreement (the “Agreement”)
is
made and entered into as of this ___ day of February, 2006 by and among Caprius,
Inc., a Delaware corporation (the “Company”), Xxxxxx Securities, LLC, a New York
limited liability company (the “Placement
Agent”)
and
the “Investors”
named
in that certain Purchase Agreement by and among the Company and the Investors
(the “Purchase
Agreement”).
The
parties hereby agree as follows:
1. Certain
Definitions.
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.
“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”
shall
mean the Company’s common stock, par value $0.01 per share, and any securities
into which such shares may hereinafter be reclassified.
“Conversion
Shares”
means
the shares of Common Stock issuable upon conversion of the Shares.
“Investors”
shall
mean the Investors identified in the Purchase Agreement and any Affiliate or
permitted transferee of any Investor who is a subsequent holder of any Warrants
or Registrable Securities.
“Placement
Agent Warrants”
shall
mean the Warrants issued to the Placement Agent and its permitted
transferees.
“Placement
Agent Warrant Shares”
shall
mean the shares of Common Stock issuable upon exercise of the Warrants issued
to
the Placement Agent and its permitted transferees.
“Prospectus”
shall
mean 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 1933 Act (as defined below), and the
declaration or ordering of effectiveness of such Registration Statement or
document.
“Registrable
Securities”
shall
mean (i) the Conversion Shares, (ii) the Warrant Shares, (iii) the Placement
Agent Warrant Shares and (iv) any other securities issued or issuable with
respect to or in exchange for Registrable Securities; provided, that, a security
shall cease to be a Registrable Security upon (A) sale pursuant to a
Registration Statement or Rule 144 under the 1933 Act, or (B) such security
becoming eligible for sale by the Investors pursuant to Rule
144(k).
“Registration
Statement”
shall
mean any registration statement of the Company filed under the 1933 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
Investors”
means
the Investors holding at least sixty-six percent (66%) of the Registrable
Securities at the time of the action taken by the Required
Investors.
“SEC”
means
the U.S. Securities and Exchange Commission.
“Shares”
means
the shares of Preferred Stock issued pursuant to the Purchase
Agreement.
“1933
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“1934
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Warrants”
means
the 2006 Series A Warrants and 2006 Series B Warrants to purchase shares of
Common Stock issued to the Investors pursuant to the Purchase Agreement, the
form of which are attached to the Purchase Agreement as Exhibits B and C,
respectively, and the Placement Agent Warrants, the form of which are attached
to the Placement Agent Agreement between the Company and the Placement Agent
dated as of the date hereof.
“Warrant
Shares”
means
the shares of Common Stock issuable upon the exercise of the
Warrants.
2. Registration.
(a) Registration
Statements.
(i) Promptly
following the closing of the purchase and sale of the securities contemplated
by
the Purchase Agreement (the “Closing
Date”)
but no
later than forty-five (45) days after the Closing Date (the “Filing
Deadline”),
the
Company shall prepare and file with the SEC one Registration Statement on Form
SB-2 (or, if Form SB-2 is not then available to the Company, on such form of
registration statement as is then available to effect a registration for resale
of the Registrable Securities), covering the resale of one hundred and ten
(110%) percent of the resale of the Registrable Securities. Such Registration
Statement shall include the plan of distribution attached hereto as Exhibit
A.
Such
Registration Statement also shall cover, to the extent allowable under the
1933
Act and the rules promulgated thereunder (including Rule
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416),
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 Company shall use its reasonable best efforts to
obtain from each person who now has piggyback registration rights a waiver
of
those rights with respect to the Registration Statement except such persons
who
currently own shares of Common Stock covered by an effective registration
statement under the 1933 Act. 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 Investors and their
counsel prior to its filing or other submission. If a Registration Statement
covering the Registrable Securities is not filed with the SEC on or prior to
the
Filing Deadline, the Company will make payments to each Investor, as liquidated
damages and not as a penalty, in an amount equal to 1.5% of the aggregate amount
invested by such Investor for each 30-day period or pro rata for any portion
thereof following the Filing Deadline for which no Registration Statement is
filed with respect to the Registrable Securities. Such payments shall be in
partial compensation to the Investors, and shall not constitute the Investors’
exclusive remedy for such events. Such payments shall be made to each Investor
in cash and shall be paid monthly within three (3) Business Days after the
last
day of each month following the Filing Deadline.
(ii) Additional
Registrable Securities.
If at
any time during the effectiveness of the Registration Statement, the number
of
Registrable Securities exceeds 90% of the number of shares of Common Stock
then
registered in the Registration Statement, the Company shall prepare and file
with the SEC one or more Registration Statements on Form SB-2 (or, if Form
SB-2
is not then available to the Company, on such form of registration statement
as
is then available or, if permissible, amend the Registration Statement filed
pursuant to clause (i) above to effect a registration for resale of such
additional shares of Common Stock (the “Additional
Shares”),
subject to the Required Investors’ consent) covering the resale of one hundred
and ten (110%) percent of the Additional Shares, but only to the extent the
Additional Shares are not at the time covered by an effective Registration
Statement. Such Registration Statement also shall cover, to the extent allowable
under the 1933 Act and the rules promulgated thereunder (including Rule 416),
such indeterminate number of additional shares of Common Stock resulting from
stock splits, stock dividends or similar transactions with respect to the
Additional Shares. The Company shall use its reasonable best efforts to obtain
from each person who now has piggyback registration rights a waiver of those
rights with respect to such Registration Statement. 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
Investors and their counsel prior to its filing or other submission. If a
Registration Statement covering the Additional Shares is required to be filed
under this Section 2(a)(ii) and is not filed with the SEC within forty-five
(45)
Business Days of the request of any Investor or upon the occurrence of any
of
the events specified in this Section 2(a)(ii) (the “Additional
Shares Filing Deadline”),
the
Company will make pro rata payments to each Investor, as liquidated damages
and
not as a penalty, in an amount equal to 1.5% of the aggregate amount invested
by
such Investor with respect to the Additional Shares for each 30-day period
or
pro rata for any portion thereof following the date by which such Registration
Statement should have been filed for which no Registration Statement is filed
with respect to the Additional Shares. Such payments shall be in partial
compensation to the Investors, and shall not constitute the Investors’ exclusive
remedy for such events. Such payments shall be made to
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each
Investor in cash and shall be paid monthly within three (3) Business Days after
the last day of each month following the Additional Shares Filing
Deadline.
(iii) S-3
Qualification.
If the
Company is not eligible to use a registration statement on Form S-3 as provided
in Sections 2(a)(i) and 2(a)(ii) above, then, promptly following the date (the
“Qualification
Date”)
upon
which the Company becomes eligible to use a registration statement on Form
S-3
to register the Registrable Securities or Additional Shares, as applicable,
for
resale, but in no event more than ten (10) Business Days after the Qualification
Date, the Company shall use its best efforts to file a registration statement
on
Form S-3 covering the Registrable Securities or Additional Shares, as applicable
(or a post-effective amendment on Form S-3 to the registration statement on
Form
S-1) (a “Shelf
Registration Statement”)
and
shall use commercially reasonable efforts to cause such Shelf Registration
Statement to be declared effective as promptly as practicable thereafter.
(b) Expenses.
The
Company will pay all expenses associated with each registration, including
filing and printing fees, the Company’s counsel and accounting fees and
expenses, costs associated with clearing the Registrable Securities for sale
under applicable state securities laws, listing fees, fees and expenses of
one
counsel to the Investors and the Investors’ reasonable expenses in connection
with the registration, but excluding discounts, commissions, fees of
underwriters, selling brokers, dealer managers or similar securities industry
professionals with respect to the Registrable Securities being
sold.
(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 Investors by facsimile or e-mail as promptly as practicable, and in any
event, within twenty-four (24) hours, after any Registration Statement is
declared effective and shall simultaneously provide the Investors with copies
of
any related Prospectus to be used in connection with the sale or other
disposition of the securities covered thereby. If (A)(x) a Registration
Statement covering the Registrable Securities is not declared effective by
the
SEC prior to the earlier of (i) the 90th day after the Closing Date if the
SEC
shall have informed the Company that no review of the Registration Statement
will be made or (ii) the 120th
day
after the Closing Date in the event the SEC has reviewed the Registration
Statement, (y) a Registration Statement covering Additional Shares is not
declared effective by the SEC within 90 days following the time such
Registration Statement was required to be filed pursuant to Section 2(a)(ii),
or
(B)
after a Registration Statement has been declared effective by the SEC, sales
cannot be made pursuant to such Registration Statement for any reason (including
without limitation by reason of a stop order, or the Company’s failure to update
the Registration Statement), but excluding the inability of any Investor to
sell
the Registrable Securities covered thereby due to market conditions and except
as excused pursuant to subparagraph (ii) below, then
the
Company will make pro rata payments to each Investor, as liquidated damages
and
not as a penalty, in an amount equal to 1.5% of the aggregate amount invested
by
such Investor for each 30- day period or pro rata for any portion thereof
following the date by which such Registration Statement should have been
effective (the “Blackout
Period”).
Such
payments shall be in partial compensation to the Investors, and shall not
constitute the Investors’ exclusive remedy for such events. The amounts payable
as liquidated damages pursuant to this paragraph shall be paid monthly within
three (3)
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Business
Days of the last day of each month following the commencement of the Blackout
Period until the termination of the Blackout Period. Such payments shall be
made
to each Investor in cash.
(ii) For
not
more than fifteen (15) consecutive Business Days or for a total of not more
than
twenty-five (25) Business Days in any twelve (12) month period, the Company
may
delay the disclosure of material non-public information concerning the Company,
by suspending the use of any Prospectus included in any registration
contemplated by this Section containing such information, the disclosure of
which at the time is not, in the good faith opinion of the Company, in the
best
interests of the Company (an “Allowed
Delay”);
provided, that the Company shall promptly (a) notify the Investors in writing
of
the existence of (but in no event, without the prior written consent of an
Investor, shall the Company disclose to such Investor any of the facts or
circumstances regarding) material non-public information giving rise to an
Allowed Delay, (b) advise the Investors in writing to cease all sales under
the
Registration Statement until the end of the Allowed Delay and (c) use
commercially reasonable efforts to terminate an Allowed Delay as promptly as
practicable. If the Allowed Delay exceeds fifteen (15) consecutive Business
Days
or a total of twenty-five (25) Business Days in any twelve month period, the
Company will make pro-rata payments to each Investor, as liquidated damages
and
not as a penalty, in an amount equal to 1.5% of the aggregate amount invested
by
such Investor in the Registrable Securities then owned by such Investor for
each
30-day period or pro-rata portion thereof following the date on which such
permitted Allowed Delay is exceeded.
3. Company
Obligations.
The
Company will use commercially reasonable efforts to effect the registration
of
the Registrable Securities in accordance with the terms hereof, and pursuant
thereto the Company will, 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 covered
by
such Registration Statement as amended from time to time, have been sold, and
(ii) the date on which all Registrable Securities covered by such Registration
Statement may be sold pursuant to Rule 144(k) (the “Effectiveness
Period”)
and
advise the Investors 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 the Prospectus as may be necessary to keep the
Registration Statement effective for the period specified in Section 3(a) and
to
comply with the provisions of the 1933 Act and the 1934 Act with respect to
the
distribution of all of the Registrable Securities covered thereby;
(c) provide
copies to and permit counsel designated by the Investors to review each
Registration Statement and all amendments and supplements thereto no fewer
than
three (3) Business Days prior to their filing with the SEC and not file any
document to which such counsel reasonably objects;
(d) furnish
to the Investors 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
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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 of the SEC, and each item of correspondence from the SEC
or
the staff of the SEC, 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) such number of copies
of a
Prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as each Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Investor that are covered by the related Registration
Statement;
(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 possible moment;
(f) prior
to
any public offering of Registrable Securities, use commercially reasonable
efforts to register or qualify or cooperate with the Investors 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 Investors 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 Investors, at any time when a Prospectus relating to Registrable
Securities is required to be delivered under the 1933 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, and in any event within two (2) Business Days following such
notification, prepare and furnish to such holder a reasonable number of copies
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;
and
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(i) otherwise
use commercially reasonable efforts to comply with all applicable rules and
regulations of the SEC under the 1933 Act and the 1934 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, 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 1933
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).
(j) With
a
view to making available to the Investors 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 Investors 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,
until the earlier of (A) three months after such date as all of the Registrable
Securities may be resold pursuant to Rule 144(k) or any other rule of similar
effect or (B) such date as all of the Registrable Securities shall have been
resold; (ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1934 Act; and (iii) furnish to
each
Investor upon request, as long as such Investor owns any Registrable Securities,
(A) a written statement by the Company that it has complied with the reporting
requirements of the 1934 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 Investor
of
any rule or regulation of the SEC that permits the selling of any such
Registrable Securities without registration.
4. Due
Diligence Review; Information.
(a) Availability.
The
Company shall make available, during normal business hours, for
inspection
and
review by the Investors, advisors to and representatives of the Investors (who
may or may not be affiliated with the Investors and who are reasonably
acceptable to the Company), all financial and other records, all SEC Filings
(as
defined in the Purchase Agreement) and other filings with the SEC, and all
other
corporate documents and properties of the Company as may be reasonably necessary
for the purpose of such review, and cause the Company’s officers, directors and
employees, within a reasonable time period, to supply all such information
reasonably requested by the Investors or any such representative, advisor or
underwriter in connection with such Registration Statement (including, without
limitation, in response to all questions and other inquiries reasonably made
or
submitted by any of them), prior to and from time to time after the filing
and
effectiveness of the Registration Statement for the sole purpose of enabling
the
Investors and such representatives, advisors and underwriters and their
respective accountants and attorneys to conduct initial and ongoing due
diligence with respect to the Company and the accuracy of such Registration
Statement.
(b) Nonpublic
Information.
The
Company shall not disclose material nonpublic information to the Investors,
or
to advisors to or representatives of the Investors,
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unless
prior to disclosure of such information the Company identifies such information
as being material nonpublic information and provides the Investors, such
advisors and representatives with the opportunity to accept or refuse to accept
such material nonpublic information for review and any Investor wishing to
obtain such information enters into an appropriate confidentiality agreement
with the Company with respect thereto.
5. Obligations
of the Investors.
(a) Investor
Information.
Each
Investor shall furnish in writing to the Company such information regarding
itself, the Registrable Securities held by it, the intended method of
disposition of the Registrable Securities held by it and its beneficial
ownership of the Company’s securities, including who has the right to vote or
dispose of such securities on behalf of such Investor, as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute and deliver such documents in connection with such registration as
the
Company may reasonably request, including furnishing a Selling Stockholder
Questionnaire not less than seven (7) Business Days prior to first anticipated
filing date of any Registration Statement. At least five (5) Business Days
prior
to the first anticipated filing date of any Registration Statement, the Company
shall notify each Investor of the information the Company requires from such
Investor if such Investor elects to have any of the Registrable Securities
included in the Registration Statement. An Investor shall provide such
information to the Company at least two (2) Business Days prior to the first
anticipated filing date of such Registration Statement if such Investor elects
to have any of the Registrable Securities included in the Registration
Statement.
(b) Cooperation.
Each
Investor, 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
Investor has notified the Company in writing of its election to exclude all
of
its Registrable Securities from such Registration Statement.
(c) Discontinue
Sales.
Each
Investor agrees that, upon receipt of any notice from the Company of either
(i)
the commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the
happening of an event pursuant to Section 3(h) hereof, such Investor will
immediately discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities, until the
Investor’s receipt of the copies of the supplemented or amended prospectus filed
with the SEC and until any related post-effective amendment is declared
effective and, if so directed by the Company, the Investor shall deliver to
the
Company (at the expense of the Company) or destroy (and deliver to the Company
a
certificate of destruction) all copies in the Investor’s possession of the
Prospectus covering the Registrable Securities current at the time of receipt
of
such notice.
6. Indemnification.
(a) Indemnification
by the Company.
The
Company will indemnify and hold harmless each Investor and its officers,
directors, members, employees and agents, successors and assigns, and each
other
person, if any, who controls such Investor within the meaning of the 1933 Act,
against any losses, claims, damages or liabilities, joint or several, to which
they may
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become
subject under the 1933 Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof; (ii)
any
blue sky application or other document executed by the Company specifically
for
that purpose or based upon written information furnished by the Company filed
in
any state or other jurisdiction in order to qualify any or all of the
Registrable Securities under the securities laws thereof (any such application,
document or information herein called a “Blue
Sky Application”);
(iii)
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;
(iv)
any violation by the Company or its agents of any rule or regulation promulgated
under the 1933 Act applicable to the Company or its agents and relating to
action or inaction required of the Company in connection with such registration;
or (v) any failure to register or qualify the Registrable Securities included
in
any such Registration in any state where the Company or its agents has
affirmatively undertaken or agreed in writing that the Company will undertake
such registration or qualification on an Investor’s behalf and will reimburse
such Investor, and each such officer, director or member and each such
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided,
however,
that
the Company will not be liable in any such case if and 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 so made
in
conformity with information furnished by such Investor or any such controlling
person in writing specifically for use in such Registration Statement or
Prospectus.
(b) Indemnification
by the Investors.
Each
Investor agrees, severally but not jointly, to indemnify and hold harmless,
to
the fullest extent permitted by law, the Company, its directors, officers,
employees, stockholders and each person who controls the Company (within the
meaning of the 0000 Xxx) against any losses, claims, damages, liabilities and
expense (including reasonable attorney fees) resulting from any untrue statement
of a material fact or any 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 such untrue statement
or
omission is contained in any information furnished in writing by such Investor
to the Company specifically for inclusion in such Registration Statement or
Prospectus or amendment or supplement thereto. In no event shall the liability
of an Investor be greater in amount than the dollar amount of the proceeds
(net
of all expense paid by such Investor in connection with any claim relating
to
this Section 6 and the amount of any damages such Investor has otherwise been
required to pay by reason of such untrue statement or omission) received by
such
Investor upon the sale of the Registrable Securities included in the
Registration Statement giving rise to such indemnification
obligation.
(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
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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 and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of any such
person, based upon written advice of its 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. 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 separate firm of attorneys at any time for all such indemnified parties.
No
indemnifying party will, 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 1933
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 6 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.
7. Miscellaneous.
(a) Amendments
and Waivers.
This
Agreement may be amended only by a writing signed by the Company and the
Required Investors, which shall be binding on all of the Investors. The Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the Required
Investors.
(b) Notices.
All
notices and other communications provided for or permitted hereunder shall
be
made as set forth in Section 9.4 of the Purchase Agreement.
(c) Assignments
and Transfers by Investors.
The
provisions of this Agreement shall be binding upon and inure to the benefit
of
the Investors and their respective
-10-
successors
and assigns. An Investor 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 Investor to such person, provided
that such Investor complies with all laws applicable thereto and provides
written notice of assignment to the Company promptly after such assignment
is
effected.
(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 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
Investors, after notice duly given by the Company to each Investor.
(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, 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.
(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
-11-
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 New York 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 New York located in New York County
and the United States District Court for the Southern District of New York
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.
-12-
IN
WITNESS WHEREOF, the parties have executed this Agreement or caused their duly
authorized officers to execute this Agreement as of the date first above
written.
|
The
Company:
|
CAPRIUS,
INC.
|
|||||||
|
By:
/s/
|
Xxxxxx Xxxxx | |||||||
| Xxxxxx Xxxxx | ||||||||
| President and Chief Executve Officer | ||||||||
|
XXXXXX
SECURITIES, LLC
|
||||||||
|
By:
|
||||||||
|
Name:
|
||||||||
|
Title:
|
||||||||
-13-
SIGNATURE
PAGE OF INVESTORS TO CAPRIUS, INC.
Name
of
Investor: _________________________________________________
Signature
of Authorized Signatory of Investor:
__________________________
Name
of
Authorized Signatory: _______________________________
Title
of
Authorized Signatory: _________________________________
[SIGNATURE
PAGES CONTINUE]
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Exhibit
A
Plan
of Distribution
The
selling stockholders, which as used herein includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock
or
interests in shares of common stock received after the date of this prospectus
from a selling stockholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise dispose of any
or
all of their shares of common stock or interests in shares of common stock
on
any stock exchange, market or trading facility on which the shares are traded
or
in private transactions. These dispositions may be at fixed prices, at
prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale,
or at
negotiated prices.
The
selling stockholders may use any one or more of the following methods when
disposing of shares or interests therein:
-
ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
-
block
trades in which the broker-dealer will attempt to sell the shares as agent,
but
may position and resell a portion of the block as principal to facilitate the
transaction;
-
purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;
-
an
exchange distribution in accordance with the rules of the applicable
exchange;
-
privately negotiated transactions;
-
settlement of short sales effected after the date the registration statement
of
which this Prospectus is a part is declared effective by the SEC;
-
through
the writing or settlement of options or other hedging transactions, whether
through an options exchange or otherwise;
-
broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;
-
a
combination of any such methods of sale; and
-
any
other method permitted pursuant to applicable law.
The
selling stockholders may, from time to time, pledge or grant a security interest
in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock, from time to time, under this
prospectus, or under an amendment to
-15-
this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act amending the list of selling stockholders to include the pledgee, transferee
or other successors in interest as selling stockholders under this prospectus.
The selling stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors
in
interest will be the selling beneficial owners for purposes of this
prospectus.
Broker-dealers
engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the selling stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated. The
selling stockholders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved.
In
connection with the sale of our common stock or interests therein, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The selling
stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The
aggregate proceeds to the selling stockholders from the sale of the common
stock
offered by them will be the purchase price of the common stock less discounts
or
commissions, if any. Each of the selling stockholders reserves the right to
accept and, together with their agents from time to time, to reject, in whole
or
in part, any proposed purchase of common stock to be made directly or through
agents. We will not receive any of the proceeds from this offering. Upon any
exercise of the warrants by payment of cash, however, we will receive the
exercise price of the warrants.
The
selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided that they meet the criteria and conform to the requirements of that
rule.
The
selling stockholders and any underwriters, broker-dealers or agents that
participate in the sale of the common stock or interests therein may be
"underwriters" within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the Securities Act.
Selling stockholders who are "underwriters" within the meaning of Section 2(11)
of the Securities Act will be subject to the prospectus delivery requirements
of
the Securities Act. Each selling stockholder has informed the Company that
it
does not have any written or oral agreement or understanding, directly or
indirectly, with any person to distribute the Common Stock.
-16-
To
the
extent required, the shares of our common stock to be sold, the names of the
selling stockholders, the respective purchase prices and public offering prices,
the names of any agents, dealer or underwriter, any applicable commissions
or
discounts with respect to a particular offer will be set forth in an
accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus. Each
selling stockholder has informed the Company that it does not have any written
or oral agreement or understanding, directly or indirectly, with any person
to
distribute the Common Stock.
In
order
to comply with the securities laws of some states, if applicable, the common
stock may be sold in these jurisdictions only through registered or licensed
brokers or dealers. In addition, in some states the common stock may not be
sold
unless it has been registered or qualified for sale or an exemption from
registration or qualification requirements is available and is complied
with.
We
have
advised the selling stockholders that the anti-manipulation rules of Regulation
M under the Exchange Act may apply to sales of shares in the market and to
the
activities of the selling stockholders and their affiliates. In addition, we
will make copies of this prospectus (as it may be supplemented or amended from
time to time) available to the selling stockholders for the purpose of
satisfying the prospectus delivery requirements of the Securities Act. The
selling stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.
We
have
agreed to indemnify the selling stockholders against liabilities, including
liabilities under the Securities Act and state securities laws, relating to
the
registration of the shares offered by this prospectus.
We
have
agreed with the selling stockholders to keep the registration statement of
which
this prospectus constitutes a part effective until the earlier of (1) such
time
as all of the shares covered by this prospectus have been disposed of pursuant
to and in accordance with the registration statement or (2) the date on which
the shares may be sold pursuant to Rule 144(k) of the Securities
Act.
Notwithstanding
anything contained herein to the contrary, the Placement Agent Warrant Shares
held by the Placement Agent or “associated persons” of the Placement Agent are
subject to a 180 day lock-up agreement in accordance with the requirements
of
NASD Rule 2710(g)(1).
-17-
