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EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("AGREEMENT") is entered into as of
July 10, 2001 by and between CHROMAVISION MEDICAL SYSTEMS, INC., a Delaware
corporation with offices at 00000 Xxxxx Xxxxxxx, Xxx Xxxx Xxxxxxxxxx, Xxxxxxxxxx
00000 (the "COMPANY"), and each of the entities listed under "Purchasers" on the
signature page hereto (each a "PURCHASER" and collectively the "Purchasers"),
each with offices at the address listed beside such Purchaser's name on Schedule
I to the Purchase Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Securities Purchase Agreement dated as
of the date hereof by and between the Company and the Purchasers (the "PURCHASE
AGREEMENT"), the Company has agreed to sell and issue to the Purchasers, and the
Purchasers have agreed to purchase from the Company, (i) an aggregate of
[12,500] shares of the Company's Series D 5% Cumulative Convertible Preferred
Stock ("PREFERRED SHARES"), which are convertible into shares ("COMMON SHARES")
of the Company's common stock, $0.01 par value ("COMMON STOCK"), and (ii) 5-year
warrants ("WARRANTS") to purchase up to an aggregate number of shares of Common
Stock ("WARRANT SHARES") equal to 25% of the aggregate purchase price under the
Purchase Agreement divided by the Closing Price (as defined in the Certificate)
all as more fully specified and subject to the terms and conditions set forth in
the Purchase Agreement; and
WHEREAS, pursuant to the terms of, and in partial consideration for the
Purchasers' agreement to enter into, the Purchase Agreement, the Company has
agreed to provide the Purchasers with certain registration rights with respect
to the Common Shares and Warrant Shares, as well as certain other rights and
remedies as set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the Purchase
Agreement and this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Purchasers hereby agree as follows:
1. Certain Definitions. Capitalized terms used herein and not
otherwise defined shall have the meaning ascribed thereto in the Purchase
Agreement and/or the Warrants. As used in this Agreement, the following terms
shall have the following respective meanings:
"CLOSING" and "CLOSING DATE" shall have the meanings ascribed to such
terms in the Purchase Agreement.
"COMMISSION" or "SEC" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"EFFECTIVENESS DEADLINE" has the meaning specified in Section 2(a)
herein.
"FAIR MARKET PRICE" shall have the meaning ascribed to such term in the
Warrants.
"FAIR MARKET VALUE" shall have the meaning ascribed to such term in the
Warrants.
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"HOLDER" and "HOLDERS" shall mean the Purchaser or the Purchasers,
respectively, and any transferee of Registrable Securities, Preferred Shares
and/or Warrants which have not been sold to the public to whom the registration
rights conferred by this Agreement have been transferred in compliance with this
Agreement.
"INTERFERING EVENTS" shall have the meaning set forth in Section 2(b).
"MONTHLY DELAY PAYMENT" shall have the meaning specified in Section
2(b)(i)(B).
"PREMIUM REDEMPTION PRICE" shall mean the following:
(a) as to the Preferred Shares, the greater of (x) 120% of the
Liquidation Value (as defined in the Certificate) of all such Preferred Shares
being sold to the Company, or (y) 120% of the dollar amount which is the product
of (i) the number of Common Shares issuable upon conversion of the Preferred
Shares to be redeemed (without regard to any limitation on beneficial ownership
contained therein or in the Purchase Agreement) multiplied by (ii) the highest
Common Stock closing price on the Principal Market (or other Approved Market)
between and including the date of the event triggering the right of redemption
and the trading day immediately prior to the actual redemption of such Preferred
Shares, in each case payable in cash;
(b) as to the Common Shares and Warrant Shares, the greater of
(x) 120% of the dollar amount which is the product of (i) the number of shares
to be redeemed, multiplied by (ii) the highest Common Stock closing price on the
Principal Market (or other Approved Market) between and including date of the
event triggering the right of redemption and the trading day immediately prior
to the actual redemption of such shares, or (y) 120% of the Liquidation Value of
the Preferred Shares which were converted into the Common Shares being redeemed
or 120% of the aggregate exercise price for the Warrants which were exercised
for the Warrant Shares being redeemed, as the case may be, in each case payable
in cash; and
(c) as to the Warrants, 120% of the dollar amount which is the
product of (i) the number of Warrant Shares issuable to the Holder upon exercise
thereof (assuming full exercise without regard to any beneficial ownership
limitations set forth therein or in the Purchase Agreement) multiplied by (ii)
the difference between (A) the highest Common Stock closing price on the
Principal Market (or other Approved Market) between and including date of the
event triggering the right of redemption and the trading day immediately prior
to the actual redemption of such shares, less (B) the exercise price under such
Warrants, in each case payable in cash.
"REGISTRABLE SECURITIES" shall mean: (i) the Common Shares and the
Warrant Shares (without regard to any limitations on beneficial ownership
contained in the Certificate or Warrants) or other securities issued or issuable
to each Holder or its permitted transferee or designee (a) upon conversion of
the Preferred Shares and/or upon exercise of the Warrants, or (b) upon any
distribution with respect to, any exchange for or any replacement of such
Preferred Shares or Warrants or (c) upon any conversion, exercise or exchange of
any securities issued in connection with any such distribution, exchange or
replacement; (ii) securities issued or issuable upon any stock split, stock
dividend, recapitalization or similar event with respect to the
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foregoing; and (iii) any other security issued as a dividend or other
distribution with respect to, in exchange for or in replacement of the
securities referred to in the preceding clauses.
The terms "REGISTER", "REGISTERED" and "REGISTRATION" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"REGISTRATION EXPENSES" shall mean all expenses to be incurred by the
Company in connection with each Holder's registration rights under this
Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, "blue sky"
fees and expenses, reasonable fees and disbursements of counsel to Holders
(using a single counsel selected by a majority in interest of the Holders) for a
"due diligence" examination of the Company and review of the Registration
Statement and related documents, and the expense of any special audits incident
to or required by any such registration (but excluding the compensation of
regular employees of the Company, which shall be paid in any event by the
Company).
"REGISTRATION STATEMENT" shall have the meaning set forth in Section
2(a) herein.
"REGISTRATION PERIOD" shall have the meaning specified in Section 5
herein.
"REGULATION D" shall mean Regulation D as promulgated pursuant to the
Securities Act, and as subsequently amended.
"SECURITIES" means the Registrable Securities, the Preferred Shares and
the Warrants.
"SECURITIES ACT" or "ACT" shall mean the Securities Act of 1933, as
amended.
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities, and all fees and
disbursements of counsel for Holders not included within "Registration
Expenses".
"TRADING DAY" shall mean (x) if the Common Stock is listed on the New
York Stock Exchange or the American Stock Exchange, a day on which there is
trading on such stock exchange, or (y) if the Common Stock is not listed on
either of such stock exchanges but sale prices of the Common Stock are reported
on an automated quotation system, a day on which trading is reported on the
principal automated quotation system on which sales of the Common Stock are
reported, or (z) if the foregoing provisions are inapplicable, a day on which
quotations are reported by National Quotation Bureau Incorporated.
2. Registration Requirements. The Company shall use its best
efforts to effect the registration of the Registrable Securities (including
without limitation the execution of an undertaking to file post-effective
amendments, appropriate qualification under applicable "blue sky" or other state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act) as would permit or facilitate the sale or distribution
of all the Registrable Securities in the manner (including manner of sale)
reasonably requested by the
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Holder and in all U.S. jurisdictions. Such best efforts by the Company shall
include the following:
(a) The Company shall, as expeditiously as reasonably possible
after the Closing Date:
(i) But in any event within 30 days thereafter, prepare
and file a registration statement with the Commission on Form
S-3, as applicable, under the Securities Act (or in the event
that the Company is ineligible to use either such form, such
other form as the Company is eligible to use under the Securities
Act) covering the Registrable Securities and naming each Holder
as a selling stockholder thereunder (and not as an "underwriter")
(such registration statement, including any amendments or
supplements thereto and prospectuses contained therein, is
referred to herein as the "REGISTRATION STATEMENT"), which
Registration Statement, to the extent allowable under the
Securities Act and the rules promulgated thereunder (including
Rule 416), shall state that such Registration Statement also
covers such indeterminate number of additional shares of Common
Stock as may become issuable to prevent dilution resulting from
stock splits, stock dividends or similar events. The number of
shares of Common Stock initially included in such Registration
Statement shall be no less than 200% of the aggregate number of
shares of Common Stock issuable upon full conversion of the
Preferred Stock (without regard to any beneficial ownership
limitations set forth therein), plus 200% of the number of shares
of Common Stock issuable upon exercise of the Warrants in full
(without regard to any beneficial ownership limitations set forth
therein). Thereafter, the Company shall use its best efforts to
cause such Registration Statement to be declared effective as
soon as reasonably practicable, and in any event prior to the
earlier of (i) 120 calendar days following the Closing Date or
(ii) 5 Trading Days after SEC clearance to request acceleration
(the "EFFECTIVENESS DEADLINE"). The Company shall provide each
Holder and its legal counsel reasonable opportunity to review any
such Registration Statement or amendment or supplement thereto
prior to filing. Without limiting the foregoing, the Company will
promptly respond to all SEC comments, inquiries and requests, and
shall as soon as reasonably practicable request acceleration of
effectiveness of the Registration Statement at the earliest
possible date. If the Company is not initially eligible to use
Form S-3, it will, at the request of a majority-in-interest of
the holders of Registrable Securities, amend its Form S-1 to a
Form S-3 at such time that it becomes eligible to do so.
(ii) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus
used in connection with such Registration Statement, or prepare
and file such additional registration statements, as may be
necessary to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
Registration Statement in accordance with the intended methods of
disposition by the seller thereof as set forth in the
Registration Statement (and the disposition of all Registrable
Securities as necessary to comply with this Agreement) and notify
the Holders of
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the filing and effectiveness of such Registration Statement and
any amendments or supplements thereto. The Company shall promptly
forward to the Holders' counsel a copy of any correspondence or
other written communications with the SEC or other regulatory
authority, relating to the Registration Statement or the
Registrable Securities.
(iii) After the registration, furnish to each Holder such
number of copies of a current prospectus conforming with the
requirements of the Securities Act and any other documents
incident thereto, copies of the Registration Statement, any
amendment or supplement to such prospectus or Registration
Statement and any documents incorporated by reference therein and
such other documents as such Holder may from time to time
reasonably request in order to facilitate the disposition of
Registrable Securities owned by such Holder.
(iv) Use its best efforts to register and qualify the
securities covered by such Registration Statement under such
other securities or "blue sky" laws of all U.S. jurisdictions
(except in any such jurisdiction where the registration and
qualification of the securities covered by such Registration
Statement is exempt under the laws and regulations of such
jurisdiction); provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in
any such states or jurisdictions.
(v) Notify each Holder immediately of the happening of
any event (but not the substance or details of any such event
unless specifically requested by a Holder) as a result of which
the prospectus (including any supplements thereto or thereof and
any information incorporated or deemed to be incorporated by
reference therein) included in such Registration Statement, as
then in effect, includes an untrue statement of material fact or
omits 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, pursuant to Section
2(f), use its best efforts to promptly update and/or correct such
prospectus.
(vi) Notify each Holder immediately of the issuance by
the Commission or any state securities commission or agency of
any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose.
The Company shall use its best efforts to prevent the issuance of
any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible time.
(vii) Permit a single firm of counsel, designated as
Holders' counsel by the Holders of a majority of the Registrable
Securities included in the Registration Statement, to review the
Registration Statement and all amendments and supplements thereto
within a reasonable period of time prior to each filing, and
shall not file any document in a form to which such counsel
reasonably objects.
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(viii) Use its best efforts to cause the Registrable
Securities registered by the Registration Statement to be listed
or quoted on each securities exchange and/or market on which the
Common Stock is then listed and/or quoted and prepare and file
any required filings with the National Association of Securities
Dealers, Inc. or any exchange or market where the Common Stock is
then listed and/or traded.
(ix) If applicable, take all steps necessary to enable
Holders to avail themselves of the prospectus delivery mechanism
set forth in Rule 153 (or successor thereto) under the Securities
Act.
(b) Set forth below in this Section 2(b) are (I) events that
may arise that the Purchasers consider will interfere with the full enjoyment of
their rights under the Purchase Agreement and this Agreement (the "INTERFERING
EVENTS"), and (II) certain remedies applicable in each of these events.
Paragraphs (i) through (v) of this Section 2(b) describe the Interfering
Events, provide a remedy to the Purchasers if an Interfering Event occurs and
provide that the Purchasers may require that the Company redeem outstanding
Securities at a specified price if certain Interfering Events are not timely
cured.
Paragraph (vi) provides, inter alia, that if payments required as the
remedy in the case of certain of the Interfering Events are not paid when due,
the Company may be required by the Purchasers to redeem outstanding Securities
at a specified price.
The preceding paragraphs in this Section 2(b) are meant to serve only as
an introduction to this Section 2(b), are for convenience only, and are not to
be considered in applying, construing or interpreting this Section 2(b).
(i) Delay in Effectiveness of Registration Statement.
(A) In the event that the Registration Statement
has not been declared effective by the Effectiveness Deadline,
then the Company shall pay to each Holder a Monthly Delay Payment
(as defined below) on the first business day following the
Effectiveness Deadline. In addition, the Company shall pay to
each Holder a Monthly Delay Payment for each 30 day period (or
portion thereof) thereafter during which the Registration
Statement has not been declared effective. Such Monthly Delay
Payments shall not in the aggregate exceed the maximum percentage
permitted by law. In the event that the Registration Statement
has not been declared effective within 180 days following the
Closing Date, then each Holder, may at its option, cause the
Company to redeem the Securities held by such Holder, at the
Premium Redemption Price.
(B) As used in this Agreement, a "MONTHLY DELAY
PAYMENT" shall be a cash payment equal to (x) 2% of the aggregate
Purchase Price paid by a Holder, payable on the date on which the
specified condition in this Section 2(b) has not been fulfilled
or the specified deficiency has not been remedied, and (y) 1.5%
of the sum of the aggregate Purchase Price paid for the Preferred
Shares
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then held by such Holder and the aggregate Fair Market Price of
the Registrable Securities then held by such Holder (with
Warrants considered on an as-exercised basis), payable for each
30-day period thereafter (or portion thereof) that the specified
condition in this Section 2(b) has not been fulfilled or the
specified deficiency has not been remedied. Payment of the
Monthly Delay Payments, and any Premium Redemption Price payment
due pursuant to the other provisions of this Section 2(b), shall
be due and payable from the Company to such Holder within 5
business days of demand therefor. Without limiting the foregoing,
if payment in immediately available funds of the Premium
Redemption Price is not made within such 5 business day period,
the Holder may revoke and withdraw in whole or in part its
election to cause the Company to make such mandatory purchase at
any time prior to its receipt of such cash, without prejudice to
its ability to elect to receive that particular or other Premium
Redemption Price payments in the future.
(ii) No Listing; Premium Price Redemption for Delisting
of Class of Shares.
(A) In the event that the Company fails, refuses
or is unable to cause the Registrable Securities covered by the
Registration Statement to be listed and/or quoted, as the case
may be, with the Approved Market and each other securities
exchange and market on which the Common Stock is then traded at
all times during the Registration Period, or the Common Stock is
otherwise suspended from trading thereon, then the Company shall
make to each Holder a Monthly Delay Payment on the first business
day following any such delisting or failure to be quoted or
suspension. In addition, the Company shall pay to each Holder a
Monthly Delay Payment for each 30 day period (or portion thereof)
during the Registration Period from and after such failure,
refusal or inability or suspension until the Registrable
Securities and Common Stock are so listed and/or quoted and
traded on such Approved Markets.
(B) In the event that shares of Common Stock of
the Company are delisted from or not quoted on, or trading in the
Common Stock is otherwise suspended on, an Approved Market at any
time following the Closing Date and remains so delisted, not
quoted or suspended for 5 consecutive Trading Days without
listing and quoting on another Approved Market, then at the
option of each Holder and to the extent such Holder so elects,
the Company shall on 2 business days notice either (1) make to
such Holder a Monthly Delay Payment for each 30 day period (or
portion thereof) that the shares are delisted, not quoted or
suspended or (2) redeem the Securities held by such Holder, in
whole or in part, at a redemption price equal to the Premium
Redemption Price; provided, however, that such Holder may revoke
such request at any time prior to receipt of such Monthly Delay
Payments or Premium Redemption Price, as the case may be.
(iii) Blackout Periods. In the event any Holder is unable
to sell Registrable Securities under the Registration Statement
for more than (A) five (5) consecutive Trading Days or (B) an
aggregate of 20 Trading Days in any 12
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month period ("SUSPENSION GRACE PERIOD"), including without
limitation by reason of the Company's failure to deliver
unlegended shares as required by (and within the time frames
required by), and in accordance with the provisions of the
Certificate, the Warrants, this Agreement or the Purchase
Agreement, any suspension or stop order with respect to the
Registration Statement or the fact that an event has occurred as
a result of which the prospectus (including any supplements
thereto) included in such Registration Statement then in effect
includes an untrue statement of material fact or omits 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, or the number of shares of Common
Stock covered by the Registration Statement is insufficient at
such time to make such sales (any of the foregoing, a
"BLACKOUT"), then the Company shall make to each Holder a Monthly
Delay Payment on the first business day following any such
Blackout after the Suspension Grace Period. In addition, the
Company shall pay to each Holder a Monthly Delay Payment for each
30 day period (or portion thereof) that there exists a Blackout
from and after the expiration of the Suspension Grace Period. In
addition to such Monthly Delay Payments, in the event there
exists a Blackout for more than 5 days after any Suspension Grace
Period, each Holder shall have the right but not the obligation
to elect to have the Company redeem its Securities at a price
equal to the Premium Redemption Price (and no additional Monthly
Delay Payments shall accrue after such redemption).
(iv) Redemption for Conversion/Exercise Deficiency. In
the event that the Company does not have a sufficient number of
shares of Common Stock authorized, unissued and available at all
times to effect full conversion of all Preferred Shares and full
exercise of all Warrants (without regard to any limitations on
beneficial ownership), or the Company is otherwise unable or
unwilling for any reason to issue unlegended Common Stock as
required by (and within the time frames required by), and in
accordance with the provisions of, the Certificate, Warrants,
this Agreement or the Purchase Agreement (each, a
"CONVERSION/EXERCISE DEFICIENCY"), then:
(A) The Company shall provide to each Holder a
Monthly Delay Payment on the first business day following any
such Conversion/Exercise Deficiency; in addition, the Company
shall pay to each Holder a Monthly Delay Payment for each 30-day
period (or portion thereof) thereafter until such
Conversion/Exercise Deficiency has been remedied in full; and
(B) At any time five days after the commencement
of the running of the first 30-day period described above in
clause (A) of this paragraph (iv), at the request of any Holder,
the Company promptly shall purchase from such Holder, for the
Premium Redemption Price and on the terms set forth in Section
2(b)(i)(B) above, any or all outstanding Securities.
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(C) The Holder shall have the right to withdraw
any request for redemption hereunder at any time prior to its
receipt of the Mandatory Repurchase Price.
(v) Additional Interfering Events. In the event that:
(a) the Company fails, after ten (10) days
written notice has been received by the Company, to
comply with any material provision in the
Transaction Documents other than those which
already constitute an Interfering Event pursuant to
another clause under this Section 2(b), or such
longer period of time as may be necessary to cure
such breach if such breach is of a nature that it
cannot reasonably be cured within such ten (10) day
period and the Company is diligently proceeding to
cure such breach, provided that in no event shall
such cure period exceed thirty (30) days;
(b) there is a material breach by the Company of
any representations or warranties contained in the
Transaction Documents, provided that such breach
shall be deemed material if, and only if, (1) the
misrepresentation related to the Purchasers'
ability to enforce, or their rights or obligations
under, the Transaction Documents or the
transactions contemplated thereby, including
without limitation the issuance of the Securities,
or (2) the misrepresentation related to facts which
upon disclosure to the public had the effect or is
reasonably likely to have the effect of directly or
indirectly reducing the market value of the Common
Stock on the Principal Market or other market or
exchange on which the Common Stock is then traded;
or
(c) the Company pursuant to or within the
meaning of any Bankruptcy Law: (1) commences a
voluntary case; (2) consents to the entry of an
order for relief against it in an involuntary case;
(3) consents to the appointment of a Custodian of
it or for all or substantially all of its property;
(4) makes a general assignment for the benefit of
its creditors; or (5) makes a general assignment
for the benefit of its creditors; or (6) admits in
writing that it is generally unable to pay its
debts as the same become due; or (7) a court of
competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (I) is for relief
against the Company in an involuntary case; (II)
appoints a Custodian of the Company or for all or
substantially all of its property; or (III) orders
the liquidation of the Company or any subsidiary,
and such order or decree remains unstayed and in
effect for ninety (90) days. The Term "BANKRUPTCY
LAW" means Title 11, U.S. Code, or any similar
Federal or State law for the relief of debtors. The
term "CUSTODIAN" means any receiver, trustee,
assignee, liquidator or similar official under any
Bankruptcy Law;
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then, each Holder, shall at its option, have the right to cause
the Company to redeem its Securities in whole or in part at the
Premium Redemption Price at any time for a period of 60 days
after such Holder has actual knowledge of an event in clause (b)
or clause (c) above or 60 days after the end of the applicable
cure period is clause (a) above.
(vi) Premium Redemption Price for Defaults.
(A) The Company acknowledges that any failure,
refusal or inability by the Company to perform the obligations
described in the foregoing paragraphs (i) through (v) will cause
the Holders to suffer damages in an amount that will be difficult
to ascertain, including without limitation damages resulting from
the loss of liquidity in the Registrable Securities and the
additional investment risk in holding the Registrable Securities.
Accordingly, the parties agree, after consulting with counsel,
that it is appropriate to include in this Agreement the foregoing
provisions for Monthly Delay Payments and mandatory redemptions
in order to compensate the Holders for such damages. The parties
acknowledge and agree that the Monthly Delay Payments and
mandatory redemptions set forth above represent the parties' good
faith effort to quantify such damages and, as such, agree that
the form and amount of such payments and mandatory redemptions
are reasonable and will not constitute a penalty.
(B) In the event that the Company fails to make
any Monthly Delay Payment within 10 calendar days of demand
therefor, each Holder shall have the right to sell to the Company
any or all of its Securities at the Premium Redemption Price on
the terms set forth in Section 2(b)(i)(B) above.
(vii) Cumulative Remedies. Each Monthly Delay Payment
triggered by an Interfering Event provided for in the foregoing
paragraphs (i) through (v) shall be in addition to each other
Monthly Delay Payment triggered by another Interfering Event;
provided, however, that (1) in no event shall the Company be
obligated to make to any Holder Monthly Delay Payments in an
aggregate amount greater than 3% of the aggregate Purchase Price
for any 30 day period (or portion thereof) and (2) for purposes
of Monthly Delay Payments only, a single event shall require
Monthly Delay Payments only under one subsection of this Section
2(b). The Monthly Delay Payments and mandatory redemptions
provided for above are in addition to and not in lieu or
limitation of any other rights the Holders may have at law, in
equity or under the terms of the Transaction Documents including
without limitation the right to specific performance. Each Holder
shall be entitled to specific performance of any and all
obligations of the Company in connection with the registration
rights of the Holders hereunder.
(c) In the event that the offering under the Registration
Statement is deemed to be an underwritten offering, to the extent the deemed
"underwriter(s)" are the sole cause of a delay in the registration process which
leads to an Interfering Event, the time period for
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determining such Interfering Event shall be extended by one day for each day
that such Interfering Event is caused solely by such Purchaser(s).
(d) The Company shall take all reasonable actions reasonably
requested by the Holders in order to expedite or facilitate the disposition of
the Registrable Securities. In the event that the offering in which the
Registrable Securities are to be sold is deemed to be an underwritten offering
or a Purchaser selling Registrable Securities is deemed to be an underwriter,
the Company shall enter into such customary agreements with such Purchaser(s) as
would customarily be entered into with an underwriter (excluding provisions for
the purchase and sale of the Common Stock and any discounts or other
consideration) and:
(i) make such representations and warranties to such
Purchaser(s) in form, substance and scope as are customarily made
by issuers to underwriters in secondary offerings;
(ii) cause to be delivered, if requested, to such
Purchaser(s) opinions of independent counsel to the Company, on
and dated as of the effective day of the Registration Statement,
and within 90 days following the end of each fiscal year
thereafter, which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to such Purchaser(s)
and their counsel and covering, without limitation, such matters
as the due authorization and issuance of the securities being
registered and compliance with securities laws by the Company in
connection with the authorization, issuance and registration
thereof and other matters that are customarily given to
underwriters in underwritten offerings, addressed to such
Purchaser(s);
(iii) cause to be delivered, immediately prior to the
effectiveness of the Registration Statement, and at the beginning
of each fiscal year following a year during which the Company's
independent certified public accountants shall have reviewed any
of the Company's books or records, a "comfort" letter from the
Company's independent certified public accountants addressed to
such Purchaser(s), stating that such accountants are independent
public accountants within the meaning of the Securities Act and
the applicable published rules and regulations thereunder, and
otherwise in customary form and covering such financial and
accounting matters as are customarily covered by letters of the
independent certified public accountants delivered in connection
with secondary offerings; such accountants shall have undertaken
in each such letter to update the same quarterly during each such
fiscal year for which such books or records are being reviewed so
that each such letter shall remain current, correct and complete
as of the end of such accountant's review of the Company's
quarterly financial statements; and each such letter and update
thereof, if any, shall be reasonably satisfactory to such
Purchaser(s);
(iv) shall include in such agreements customary
indemnification and contribution provisions to and from the
underwriters and procedures for secondary underwritten offerings;
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(v) deliver such documents and certificates as may be
reasonably requested by the Holders of the Registrable Securities
being sold, to evidence compliance with clause (i) above and with
any customary conditions contained in underwriting agreements, if
any; and
(vi) deliver to the Holders on the effective day of the
Registration Statement, and at the beginning of each fiscal
quarter thereafter, a certificate in form and substance as shall
be reasonably satisfactory to the Holders, executed by an
executive officer of the Company and to the effect that all the
representations and warranties of the Company contained in the
Purchase Agreement are still true and correct except as disclosed
in such certificate; the Company shall, as to each such
certificate delivered at the beginning of each fiscal quarter,
update or cause to be updated each such certificate during such
quarter so that it shall remain current, complete and correct
throughout such quarter; and such updates received by the Holders
during such quarter, if any, shall have been reasonably
satisfactory to the Holders.
(e) The Company shall make available for inspection by the
Holders, representative(s) of all the Holders together, any underwriter
participating in any disposition pursuant to a Registration Statement, and any
attorney or accountant retained by any Holder or underwriter, all financial and
other records customary for purposes of the Holders' due diligence examination
of the Company and review of any Registration Statement, all SEC Documents (as
defined in the Purchase Agreement) filed subsequent to the Closing, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by any such representative, underwriter, attorney or accountant in connection
with such Registration Statement, provided that such parties agree to keep such
information confidential.
(f) The Company shall file a Registration Statement with
respect to any newly authorized and/or reserved shares which constitute
Registrable Securities within ten (10) business days of any stockholders meeting
or Board of Directors meeting, as the case may be, authorizing or reserving same
and shall use its best efforts to cause such Registration Statement to become
effective within seventy-five (75) days of such stockholders meeting. If the
Holders become entitled, pursuant to an event described in clause (iii) of the
definition of Registrable Securities, to receive any securities in respect of
Registrable Securities that were already included in a Registration Statement,
subsequent to the date such Registration Statement is declared effective, and
the Company is unable under the securities laws to add such securities to the
then effective Registration Statement, the Company shall promptly file, in
accordance with the procedures set forth herein, an additional Registration
Statement with respect to such newly Registrable Securities. The Company shall
use its best efforts to (i) cause any such additional Registration Statement,
when filed, to become effective under the Securities Act, and (ii) keep such
additional Registration Statement effective during the period described in
Section 5 below. All of the registration rights and remedies under this
Agreement shall apply to the registration of such newly reserved shares
constituting Registerable Securities and such new Registrable Securities,
including without limitation the provisions providing for Monthly Delay Payments
contained herein.
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3. Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance with registration
pursuant to this Agreement shall be borne by the Company, and all Selling
Expenses of a Holder shall be borne by such Holder.
4. Registration on Form S-3; Other Forms. The Company shall use its
best efforts to qualify for registration on Form S-3 or any comparable or
successor form or forms, or in the event that the Company is ineligible to use
such form, such form as the Company is eligible to use under the Securities Act.
5. Registration Period. In the case of the registration effected by
the Company pursuant to this Agreement, the Company will use its best efforts to
keep such registration effective at all times during the period ("REGISTRATION
PERIOD") commencing on the earlier of the effective date of the Registration
Statement or the Effectiveness Deadline and continuing thereafter until the
later to occur of (a) the date on which sales are permitted of all Registrable
Securities without registration under Rule 144(k) (provided that the Company's
transfer agent has accepted an instruction from the Company to such effect and
assuming there is no cashless exercise of the Warrants) or (b) the earlier of
the date on which (i) there are no longer any Preferred Shares and Warrants
outstanding or issuable and (ii) the sixth (6th) anniversary of the Closing
Date.
6. Indemnification.
(a) The Company Indemnity. The Company will indemnify each
Holder, each of its officers, directors and partners, and each person
controlling each Holder, within the meaning of Section 15 of the Securities Act
and the rules and regulations thereunder with respect to which registration,
qualification or compliance has been effected pursuant to this Agreement, and
each underwriter, if any, and each person who controls, within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder, any
underwriter, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the Securities Act or
any state securities law or in either case, any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and will reimburse each Holder, each of its officers, directors and partners,
and each person controlling such Holder, each such underwriter and each person
who controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating and defending any such
claim, loss, damage, liability or action, provided that the Company will not be
liable in any such case to a Holder to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission based upon written information furnished to the Company by such
Holder or the underwriter (if any) therefor and stated to be specifically for
use therein. The indemnity agreement contained in this Section 6(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Company
(which consent will not be unreasonably withheld).
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(b) Holder Indemnity. Each Holder will, severally and not
jointly, if Registrable Securities held by it are included in the securities as
to which such registration, qualification or compliance is being effected,
indemnify the Company, each of its directors, officers, partners, and each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of Section 15 of the Securities Act and the rules and regulations
thereunder, each other Holder (if any), and each of their officers, directors
and partners, and each person controlling such other Holder(s), against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statement therein not misleading, and will reimburse the Company and such other
Holder(s) and their directors, officers and partners, underwriters or control
persons for any legal or any other expenses reasonably incurred in connection
with investigating and defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to the Company by such Holder and stated to be specifically for use therein, and
provided that the maximum amount for which such Holder shall be liable under
this indemnity shall not exceed the net proceeds received by such Holder from
the sale of the Registrable Securities. The indemnity agreement contained in
this Section 6(b) shall not apply to amounts paid in settlement of any such
claims, losses, damages or liabilities if such settlement is effected without
the consent of such Holder (which consent shall not be unreasonably withheld).
(c) Procedure. Each party entitled to indemnification under
this Section 6 (the "INDEMNIFIED PARTY") shall give notice to the party required
to provide indemnification (the "INDEMNIFYING PARTY") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim in any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at such party's expense, 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 under this Section
except to the extent that the Indemnifying Party is materially and adversely
affected by such failure to provide notice. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which 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 to such claim or litigation. Each Indemnified Party shall furnish
such information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
7. Contribution. If the indemnification provided for in Section 6
herein is unavailable to the Indemnified Parties in respect of any losses,
claims, damages or liabilities
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referred to herein (other than by reason of the exceptions provided therein),
then each such Indemnifying Party, in lieu of indemnifying each of such
Indemnified Parties, shall contribute to the amount paid or payable by each such
Indemnified Party as a result of such losses, claims, damages or liabilities as
between the Company on the one hand and any Holder on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and of
such Holder in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand and
of any Holder on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Holder.
In no event shall the obligation of any Indemnifying Party to contribute
under this Section 7 exceed the amount that such Indemnifying Party would have
been obligated to pay by way of indemnification if the indemnification provided
for under Section 6(a) or 6(b) hereof had been available under the
circumstances.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Holders or the underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraphs shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this section, no Holder or underwriter shall
be required to contribute any amount in excess of the amount by which (i) in the
case of any Holder, the net proceeds received by such Holder from the sale of
Registrable Securities or (ii) in the case of an underwriter, the total price at
which the Registrable Securities purchased by it and distributed to the public
were offered to the public exceeds, in any such case, the amount of any damages
that such Holder or underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
8. Survival. The indemnity and contribution agreements contained in
Sections 6 and 7 and the representations and warranties of the Company referred
to in Section 2(d)(i) shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement or the Purchase Agreement or
any underwriting agreement, (ii) any investigation made by or on behalf of any
Indemnified Party or by or on behalf of the Company, and (iii) the consummation
of the sale or successive resales of the Registrable Securities.
9. Information by Holders. Each Holder shall reasonably promptly
furnish to the Company such information regarding such Holder and the
distribution and/or sale proposed by such Holder as the Company may reasonably
request in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this
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Agreement. The intended method or methods of disposition and/or sale (Plan of
Distribution) of such securities as so provided by such Purchaser shall be
included without alteration in the Registration Statement covering the
Registrable Securities and shall not be changed without written consent of such
Holder, except that such Holder may not require an intended method of
disposition which, in the reasonable opinion of counsel to the Company, violates
applicable securities law.
10. NASDAQ Limit on Stock Issuances. Section 3.14 of the Purchase
Agreement shall govern limits imposed by NASDAQ rules on the issuance of Common
Stock.
11. Replacement Certificates. The certificate(s) representing the
Registrable Securities held by the Purchaser (or then Holder) may be exchanged
by the Purchaser (or such Holder) at any time and from time to time for
certificates with different denominations representing an equal aggregate number
of Registrable Securities, as reasonably requested by the Purchaser (or such
Holder) upon surrendering the same. No service charge will be made for such
registration or transfer or exchange.
12. Transfer or Assignment. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the Purchasers by
the Company under this Agreement to cause the Company to register Registrable
Securities may be transferred or assigned (in whole or in part) to a transferee
or assignee of Registrable Securities, Preferred Shares or Warrants, and all
other rights granted to the Purchasers by the Company hereunder may be
transferred or assigned to any transferee or assignee of any Registrable
Securities, Preferred Shares or Warrants; provided in each case that the Company
must be given written notice by the such Purchaser at the time of or within a
reasonable time after said transfer or assignment, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned; and provided
further that the transferee or assignee of such rights agrees in writing to be
bound by the provisions of this Agreement.
13. Miscellaneous.
(a) Remedies. The Company and the Purchasers acknowledge and
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof, this being in addition to any other remedy to which
any of them may be entitled by law or equity.
(b) Jurisdiction. THE COMPANY AND EACH OF THE PURCHASERS (I)
HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT, THE NEW YORK STATE COURTS AND OTHER COURTS OF THE UNITED STATES
SITTING IN NEW YORK COUNTY, NEW YORK FOR THE PURPOSES OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND (II) HEREBY WAIVES,
AND AGREES NOT TO ASSERT IN ANY SUCH SUIT ACTION OR PROCEEDING, ANY CLAIM THAT
IT IS NOT
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PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER. THE COMPANY AND EACH OF THE PURCHASERS
CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
MAILING A COPY THEREOF TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT
UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND
SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING IN THIS PARAGRAPH
SHALL AFFECT OR LIMIT ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW.
(c) Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing by facsimile, mail or
personal delivery and shall be effective upon actual receipt of such notice. The
addresses for such communications shall be:
to the Company:
Chromavision Medical Systems, Inc.
00000 Xxxxx Xxxxxxx
Xxx Xxxx Xxxxxxxxxx, Xxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: (000) 000-0000
Attention: Financial Officer
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx, LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxx X. Xxxxxxx, Esq.
to the Purchasers:
To each Purchaser at the address and/or fax number
set forth on Schedule I of the Purchase Agreement
with copies to:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
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Any party hereto may from time to time change its address for notices by
giving at least 10 days' written notice of such changed address to the other
parties hereto.
(d) Indemnity. Each party shall indemnify each other party
against any loss, cost or damages (including reasonable attorney's fees)
incurred as a result of such parties' breach of any representation, warranty,
covenant or agreement in this Agreement.
(e) Waivers. No waiver by any party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter. The representations and warranties and
the agreements and covenants of the Company and each Purchaser contained herein
shall survive the Closing.
(f) Execution. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, it
being understood that all parties need not sign the same counterpart.
(g) Publicity. The Company agrees that it will not disclose,
and will not include in any public announcement, the name of any Purchaser
without its express written approval, unless and until such disclosure is
required by law or applicable regulation, and then only to the extent of such
requirement. The Company agrees to deliver a copy of any public announcement
regarding the matters covered by this Agreement or any agreement or document
executed herewith to each Purchaser and any public announcement including the
name of a Purchaser to such Purchaser, prior to the publication of such
announcements.
(h) Entire Agreement. This Agreement, together with the
Purchase Agreement, the Warrants and the agreements and documents contemplated
hereby and thereby, contains the entire understanding and agreement of the
parties, and may not be modified or terminated except by a written agreement
signed by both parties.
(i) Governing Law. THIS AGREEMENT AND THE VALIDITY AND
PERFORMANCE OF THE TERMS HEREOF SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS EXECUTED AND TO BE PERFORMED ENTIRELY IN SUCH STATE.
(j) Severability. The parties acknowledge and agree that the
Purchasers are not agents, affiliates or partners of each other, that all
representations, warranties, covenants and agreements of the Purchasers
hereunder are several and not joint, that no Purchaser shall have any
responsibility or liability for the representations, warrants, agreements, acts
or omissions of any other Purchaser, and that any rights granted to "Purchasers"
hereunder shall be enforceable by each Purchaser hereunder.
(k) Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL
BY JURY.
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(l) Titles. The titles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
* * * Signature page follows * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
COMPANY:
CHROMAVISION MEDICAL SYSTEMS, INC.
By: /s/ XXXXX X. X'XXXXX
-------------------------------------
Name: Xxxxx X. X'Xxxxx
Title: Executive Vice President,
Operations and Chief Financial
Officer
PURCHASERS:
HALIFAX FUND, L.P.
By: /s/ XXXXXXX XXXXXXX
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Counsel, The Palladin
Group, X.X.
XXXXXXXX CAPITAL MANAGEMENT, INC.
By: /s/ XXXXX XXXXX
-------------------------------------
Xxxxx Xxxxx, as President
CASTLE CREEK HEALTH CARE PARTNERS, LLC
By: CASTLE CREEK PARTNERS, LLC, its
Investment Manager
By: /s/ XXXXXXX XXXXXX
---------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
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CCL FUND, LLC
By: CASTLE CREEK LIFESCIENCE
PARTNERS, LLC, its Manager
By: /s/ XXXXXX XXXX
---------------------------------
Name: Xxxxxx Xxxx
Title: Member
VELOCITY INVESTMENT PARTNERS LTD.
By: Velocity Asset Management LLC
Its: Investment Manager
By: /s/ XXXX X. XXXXXXXXX
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
CARTMORE ENTERPRISES, INC.
By: /s/ XXXXXXX X. XXXXXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxxxxx
Attorney-in-Fact
SAFEGUARD DELAWARE, INC.
By: /s/ N. XXXXXXX XXXXXXX
-------------------------------------
Name: N. Xxxxxxx Xxxxxxx
Title: V.P.
SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT
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