REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is dated as of
January 14, 2005, by and between VITROTECH CORPORATION, a Nevada corporation
(the "Company"), and VITROBIRTH, LLC, a Delaware limited liability company (the
"Investor").
RECITALS
A. The Investor has made an investment in the Company by acquiring one or
more senior secured convertible promissory notes of the Company (the "Notes")
convertible into shares of the Company's common stock (the "Common Stock") and a
warrant to acquire shares of Common Stock (the "Warrant") (collectively, the
Notes and Warrant together, the "Securities")
B. In connection with such purchase of the Securities, and to induce the
Investor to consummate such purchase of the Securities, the Company has agreed
to enter into this Agreement and to grant to the Investor the rights set forth
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, the Investor and the Company
(collectively, the "Parties") agree as follows:
1. DEFINITIONS. For purposes of this Statement:
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute.
"Holder" means (i) the Investor, (ii) the partners, members or
stockholders of the Investor collectively provided that such partners, members
or stockholders act through the Investor or its successor and (iii) any person
or entity to whom the Investor or any person or entity identified in clause (ii)
of this definition sells, transfers or assigns 25% or more of the Registrable
Securities issued pursuant to the Purchase Agreement, any Note or any Warrant,
other than in a sale pursuant to Rule 144 under the Securities Act or a
registration effected pursuant to this Agreement.
"Register," "registered," and "registration" refer to a registration for
the sale of securities, through an underwriter or otherwise sold to the public,
effected by preparing and filing with the Securities and Exchange Commission
(the "Commission") a registration statement or similar document in compliance
with the Securities Act, and the declaration or ordering by the Commission of
effectiveness of such registration statement or document.
"Registration Expenses" means all expenses in connection with the
Company's performance of or compliance with its obligations under this
Agreement, including, without limitation, all (i) registration, qualification
and filing fees; (ii) fees, costs and expenses of compliance with federal or
state securities or blue sky laws (including reasonable fees, expenses
and disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities under the laws of such
jurisdictions as the managing underwriter or underwriters in a registration, or
the Holders' brokers if there is no such underwriter(s), may designate, subject
to the limitation as set forth in subsection (h) of Section 5 hereof); (iii)
printing expenses; (iv) messenger, telephone and delivery expenses; (v) fees,
expenses and disbursements of counsel for the Company and of all independent
certified public accountants retained by the Company (including the expenses of
any special audit and "cold comfort" letters required by or incident to such
performance); (vi) Securities Act liability insurance if the Company so desires;
(vii) fees, expenses and disbursements of any other individuals or entities
retained by the Company in connection with the registration of the Registrable
Securities; (viii) fees, costs and expenses incurred in connection with the
listing of the Registrable Securities on each national securities exchange or
automated quotation system on which the Company has made application for the
listing of its Common Stock; and (ix) internal expenses of the Company
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties and expenses of any annual
audit). Registration Expenses shall not include selling commissions, discounts
or other compensation paid to underwriters or other agents or brokers to effect
the sale of Registrable Securities or counsel fees incurred by Holders in
connection with any registration that are not specified in the immediately
preceding sentence.
"Registrable Securities" means any shares of Common Stock of the Company
owned by any Holder or that may be acquired by any Holder upon the conversion of
any convertible security or the exercise of any warrant, option or other right
owned by any Holder, but only to the extent such shares constitute "restricted
securities" under Rule 144 under the Securities Act.
"Requestor" means the Holder or Holders requesting the registration in
question. Actions taken by the Requestor shall be taken by those Holders making
such request who hold a majority of the Registrable Securities held by such
Holders.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute.
2. DEMAND REGISTRATIONS.
(a) REQUEST FOR REGISTRATION. If at any time after the date hereof
(but in no event prior to such time as one or more Holders exercises its
conversion rights under Section 6 of the Note) one or more Holders who in the
aggregate hold at least 25% of the Registrable Securities submits a written
request (a "Demand Notice") to the Company that the Company register Registrable
Securities under and in accordance with the Securities Act (a "Demand
Registration"), then the Company shall:
(i) within three (3) business days after receipt of such
Demand Notice, give written notice of the proposed registration to all other
Holders;
(ii) prepare and file a registration statement (on Form X-0,
X-0, or other available form) within forty-five (45) days after receipt of the
Demand Notice, in accordance with Section 5 below, as would permit or facilitate
the sale and distribution of all or such portion of such Registrable Securities
by the Holder as are specified in such request (but in no event less than lower
of (a) 50% percent of Holder's Registrable Securities or (b) $500,000 per
effective registration), together with all or such portion of the Registrable
Securities of any Holders joining in such request as are specified in written
requests received by the Company within 20 days after the date the Company mails
the written notice referred to in clause (i) above; as selling stockholders and
not underwriters unless otherwise requested by Holder; and
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(iii) use diligent efforts to effect such registration (and
shall be required to cause only 2 such registrations to become effective) as
soon as practicable, but in no event more than one hundred twenty (120) days
following receipt of the Demand Notice.
If at any time or from time to time after the effective date of any
registration statement filed pursuant to this Section 2, the Company notifies
the Holders in writing of the existence of a Potential Material Event (as
defined below), the Holders shall not offer or sell any Registrable Securities
or engage in any other transaction involving or relating to Registrable
Securities, from the time of the giving of notice with respect to a Potential
Material Event until the Holders receive written notice from the Company that
such Potential Material Event either has been disclosed to the public or no
longer constitutes a Potential Material Event; provided, however, that the
Company may not so suspend the right to such holders of Registrable Securities
for more than thirty (30) days in the aggregate during any twelve month period,
during the period the registration statement is required to be in effect, and if
such period is exceeded, such event shall be a Registration Default and subject
to liquidated damages as set forth in Section 2(d) hereof. If a Potential
Material Event shall occur or exist on the date a registration statement is
required to be filed, then the Company's obligation to file such registration
statement shall be delayed without penalty for not more than thirty (30) days,
and such delay or delays shall not constitute a Registration Default. Such
thirty (30) day period shall not be in addition to the thirty (30) day period
allowed during the period the registration statement is required to be in
effect. The Company must, if lawful, give the Holders notice in writing at least
two (2) trading days prior to the first day of the blackout period. The Company
will pay all registration expenses in connection with any withdrawn request for
registration.
"Potential Material Event" means the possession by the Company of material
information not ripe for disclosure in a registration statement, as determined
in good faith by the Board of Directors of the Company, and where disclosure of
such information in a registration statement would be detrimental to the
business and affairs of the Company, which determination shall be accompanied by
certificate from the President or Chief Executive Officer of such determination
by the Board of Directors and a good faith determination by the President, Chief
Executive Officer or the Board of Directors of the Company that the applicable
Registration Statement would be materially misleading absent the inclusion of
such information.
Notwithstanding the foregoing, the Company shall not be required to effect
any registration requested within less than 120 days after the filing of another
registration filed by the Company in which all of the Registrable Securities
requested to be included in such registration by participating Holders were so
included.
(b) UNDERWRITING. In connection with any registration under this
Section 2, if the Requestors intend to distribute the Registrable Securities
covered by their request by
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means of an underwriting, they shall so advise the Company as a part of their
request made pursuant to Section 2(a). In such event, the right of any Holder to
include its Registrable Securities in such registration shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. The Holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement with one or more
underwriters selected by the Requestors having terms and conditions customary
for such agreements (which underwriter or underwriters shall be reasonably
acceptable to the Company) . Notwithstanding any other provision of this Section
2, if the managing underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the managing underwriter
may limit the number of Registrable Securities to be included in such
registration. The Company shall so advise all Holders distributing Registrable
Securities through such underwriting, and the Securities that may be included in
the registration and underwriting shall be allocated in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities required to be
included (determined without regard to any requirement of a request to be
included in such registration) in such registration held by all Holders at the
time of filing the registration statement. To facilitate the allocation of
shares in accordance with the above provisions, the Company may round the number
of shares allocated to any Holder to the nearest 100 shares.
(c) SHELF REGISTRATION. If at the time the Company registers
Registrable Securities under the Securities Act pursuant to this Section 2, the
sale or other disposition of such Registrable Securities by the Holders may be
made pursuant to a registration statement on Form S-3 (or any successor form
that permits the incorporation by reference of future filings by the Company
under the Exchange Act), and such registration statement, unless otherwise
directed by the Requestor, shall be filed as a "shelf" registration statement
pursuant to Rule 415 under the Securities Act (or any successor rule) . Any such
shelf registration shall cover the disposition of all Registrable Securities in
one or more offerings, block transactions, broker transactions, at-market
transactions and in such other manner or manners as may be specified by the
Requestor. Except as provided in Section 5(b) hereof, the Company shall use its
reasonable best efforts to keep such "shelf" registration continuously effective
as long as the delivery of a prospectus is required under the Securities Act in
connection with the disposition of the Registrable Securities registered thereby
and in furtherance of such obligation, shall supplement or amend such
registration statement if, as and when required by the rules, regulations and
instructions applicable to the form used by the Company for such registration or
by the Securities Act or by any other rules and regulations thereunder
applicable to shelf registrations.
(d) REGISTRATION DEFAULT. In the event that (i) the registration
statement to be filed by the Company pursuant to this Section 2 is not filed
with the SEC within forty-five (45) days from receipt of the Demand Notice, (ii)
such Registration Statement is not declared effective by the SEC within the
earlier of one hundred twenty (120) days from receipt of the Demand Notice or
five (5) days of clearance by the Commission to request effectiveness or (iii)
such Registration Statement is not maintained as effective by the Company for
the period set forth in Section 2(c) above (each a "Registration Default") then
the Company will pay Holder (pro rated on a daily basis) in cash or, at the
option of the Holder, in Common Stock based upon the closing price on the
trading day prior to the date of payment, as liquidated damages for such
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failure and not as a penalty, two percent (2%) of the aggregate market value of
common stock registered for each thirty (30) days thereafter until such
Registration Statement has been filed or declared effective, as the case may be.
Such payment of the liquidated damages shall be made to the Holders in cash,
within five (5) calendar days of demand, provided, however, that the payment of
such liquidated damages shall not relieve the Company from its obligations to
register the Registrable Securities pursuant to this Section. Notwithstanding
anything to the contrary contained herein, a failure to maintain the
effectiveness of a filed registration statement or the ability of a Holder to
use an otherwise effective registration statement to effect resales of
Registrable Securities during the period after forty-five (45) days and within
ninety (90) days from the end of the Company's fiscal year resulting solely from
the need to update the Company's audited financial statements contained or
incorporated by reference in such registration statement shall not constitute a
Registration Default and shall not trigger the accrual of liquidated damages
hereunder. If the Company does not remit the payment to the Holders as set forth
above, the Company will pay the Holders reasonable costs of collection,
including attorneys' fees, in addition to the liquidated damages. The
registration of the Registrable Securities pursuant to this provision shall not
affect or limit the Holders' other rights or remedies as set forth in this
Agreement.
3. COMPANY REGISTRATION.
(a) NOTICE OF REGISTRATION. If at any time or from time to time, the
Company shall determine to register any of its capital stock, whether or not for
its own account, other than a registration relating to employee benefit plans or
a registration effected on Form S-4, the Company shall:
(i) provide to each Holder written notice thereof at least ten
days prior to the filing of the registration statement by the Company in
connection with such registration; and
(ii) include in such registration, and in any underwriting
involved therein, all those Registrable Securities specified in a written
request by each Holder received by the Company within five days after the
Company mails the written notice referred to above, subject to the provisions of
Section 3(b) below.
(b) UNDERWRITING. The right of any Holder to registration pursuant
to this Section 3 shall be conditioned upon the participation by such Holder in
the underwriting arrangements specified by the Company in connection with such
registration and the inclusion of the Registrable Securities of such Holder in
such underwriting to the extent provided herein. All Holders proposing to
distribute their Registrable Securities through such underwriting shall
(together with the Company) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by the Company
and take all other actions, and deliver such opinions and certifications, as may
be reasonably requested by such managing underwriter. Notwithstanding any other
provision of this Section 3, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten,
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the managing underwriter may limit the number of Registrable Securities to be
included in such registration. The Company shall so advise all Holders
distributing Registrable Securities through such underwriting, and there shall
be excluded from such registration and underwriting, to the extent necessary to
satisfy such limitation, first shares held by the Holders and, thereafter, to
the extent necessary, shares which the Company wishes to register for its own
account. As among the Holders as a group, the number of Registrable Securities
that may be included in the registration and underwriting shall be allocated in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities required to be included (determined without regard to any requirement
of a request to be included in such registration) in such registration held by
all Holders at the time of filing the registration statement. To facilitate the
allocation of shares in accordance with the above provisions, the Company may
round the number of shares allocated to any Holder to the nearest 100 shares.
(c) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 3 whether or not any Holder has elected to include Registrable
Securities in such registration.
4. EXPENSE OF REGISTRATION. All Registration Expenses incurred in
connection with the registration and other obligations of the Company pursuant
to Sections 2, 3 and 5 shall be borne by the Company, and all underwriting
discounts and selling commissions incurred in connection with any such
registrations shall be borne by the Holders of the securities so registered pro
rata on the basis of the number of shares so registered. The Company shall not,
however, be required to pay for expenses of any registration proceeding begun
pursuant to Sections 2, 3 or 5, the request of which has been subsequently
withdrawn by the Holders unless the withdrawal is based upon material adverse
information concerning the Company of which the Holders were not aware at the
time of such request.
5. REGISTRATION PROCEDURES. If and whenever the Company is required by the
provisions of this Agreement to effect the registration of Registrable
Securities, the Company shall:
(a) promptly prepare and file with the Commission a registration
statement with respect to such Registrable Securities on any form that may be
utilized by the Company and that shall permit the disposition of the Registrable
Securities in accordance with the intended method or methods of disposition
thereof, and use its reasonable diligent efforts to cause such registration
statement to become effective as promptly as practicable and remain effective
thereafter as provided herein, provided that prior to filing a registration
statement or prospectus or any amendments or supplements thereto, including
documents incorporated by reference after the initial filing of any registration
statement, the Company will furnish to each of the Investor whose Registrable
Securities are covered by such registration statement, their counsel and the
underwriters copies of all such documents proposed to be filed sufficiently in
advance of filing to provide them with a reasonable opportunity to review such
documents and comment thereon, but in no event less than five (5) business days
before expecting a response;
(b) prepare and file with the Commission such amendments (including
post-effective amendments) and supplements to such registration statement and
the prospectus used in
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connection therewith as may be necessary to keep such registration statement
effective and current and to comply with the provisions of the Securities Act
with respect to the sale or other disposition of all Registrable Securities
covered by such registration statement, including such amendments (including
post-effective amendments) and supplements as may be necessary to reflect the
intended method of disposition by the prospective seller or sellers of such
Registrable Securities, provided that except in the case of a shelf registration
under Section 2(c) such registration statement need not be kept effective and
current for longer than 120 days subsequent to the effective date of such
registration statement;
(c) subject to receiving reasonable assurances of confidentiality,
for a reasonable period after the filing of such registration statement, and
throughout each period during which the Company is required to keep a
registration effective, make available for inspection by the selling holders of
Registrable Securities being offered, and any underwriters, and their respective
counsel, such financial and other information and books and records of the
Company, and cause the officers, directors, employees, counsel and independent
certified public accountants of the Company to respond to such inquiries as
shall be reasonably necessary, in the judgment of such counsel, to conduct a
reasonable investigation within the meaning of Section 11 of the Securities Act;
(d) promptly, but in no event within less than two (2) business
days, notify the selling Holders of Registrable Securities and any underwriters
and confirm such advice in writing, (i) when such registration statement or the
prospectus included therein or any prospectus amendment or supplement or
post-effective amendment has been filed, and, with respect to such registration
statement or any post-effective amendment, when the same has become effective,
(ii) of any comments by the Commission, by the National Association of
Securities Dealers Inc. ("NASD"), and by the blue sky or securities commissioner
or regulator of any state with respect thereto or any request by any such entity
for amendments or supplements to such registration statement or prospectus or
for additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of such registration statement or the
initiation or threatening of any proceedings for that purpose, (iv) if at any
time the representations and warranties of the Company cease to be true and
correct in all material respects, (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, or (vi) at any time when a
prospectus is required to be delivered under the Securities Act, that such
registration statement, prospectus, prospectus amendment or supplement or
post-effective amendment, or any document incorporated by reference in any of
the foregoing, contains 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, in light of the circumstances under which they are made, not
misleading;
(e) furnish to each selling holder of Registrable Securities being
offered, and any underwriters, prospectuses or amendments or supplements
thereto, in such quantities as they may reasonably request and as soon as
practicable, that update previous prospectuses or amendments or supplements
thereto;
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(f) (i) register or qualify the Registrable Securities to be
included in a registration statement hereunder under such other securities laws
or blue sky laws of such jurisdictions within the United States of America as
any selling holder of such Registrable Securities or any underwriter of the
securities being sold shall reasonably request, (ii) keep such registrations or
qualifications in effect for so long as the registration statement remains in
effect and (iii) take any and all such actions as may be reasonably necessary or
advisable to enable such holder or underwriter to consummate the disposition in
such jurisdictions of such Registrable Securities owned by such holder;
PROVIDED, HOWEVER, that the Company shall not be required for any such purpose
to (x) qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not otherwise be required to qualify but for the
requirements of this Section 5(f), (y) subject itself to taxation in any such
jurisdiction or (z) consent to general service of process in any such
jurisdiction;
(g) cause all such Registrable Securities to be listed or accepted
for quotation on each securities exchange or automated quotation system on which
the Company's Common Stock then trades; and
(h) otherwise use reasonable diligent efforts to comply with all
applicable provisions of the Securities Act, and rules and regulations of the
Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering a period of at least twelve months
which shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder.
6. INDEMNIFICATION. In the event any of the Registrable Securities are
included in a registration statement under this Agreement:
(a) to the extent permitted by law, the Company will indemnify each
Holder who participates in such registration, each of its officers and directors
and partners, and each person controlling such Holder within the meaning of
Section 15 of the Securities Act, and each underwriter, if any, and each person
who controls any underwriter within the meaning of Section 15 of the Securities
Act, against all expenses, claims, losses, damages or liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement or prospectus, or any amendment or supplement thereto, 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, in
light of the circumstances in which they were made, not misleading, or any
violation by the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company in connection with any such
registration, qualification or compliance (each, a "Violation"), and the Company
will reimburse each such Holder, each of its officers and 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, preparing or defending any
such claim, loss, damage, liability or action, provided that the Company will
not be liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any Violation which occurs in
reliance upon and in conformity with written information furnished to the
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Company by an instrument duly executed by such Holder or underwriter and stated
to be specially for use therein, and provided further, that the indemnity
agreement described 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 shall
not be unreasonably withheld.
(b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and its legal counsel and independent accountants, 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 each other such Holder, each of its
officers and directors and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, 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, such Holders, such directors,
officers, persons, underwriters or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or 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 an instrument
duly executed by such Holder and stated to be specifically for use therein.
(c) 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 provided
that failure to give such prompt notice shall not relieve the Indemnifying Party
of its obligations hereunder unless it is materially prejudiced thereby, and
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld) . Such Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be that of such Indemnified Party unless
(i) the Indemnifying Party has agreed to pay such fees and expenses or (ii) the
Indemnifying Party shall have failed to assume the defense of such action or
proceeding and employ counsel reasonably satisfactory to such Indemnified Party
in any such action or proceeding or (iii) the named parties to any such action
or proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party and such Indemnified Party shall have been
advised by counsel that there may be one or more legal defenses available to
such Indemnified Party which are different from or additional to those available
to the Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing of an election to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall
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not have the right to assume the defense of such action or proceeding on behalf
of such Indemnified Party, it being understood, however, that the Indemnifying
Party then shall have the right to employ separate counsel at its own expense
and to participate in the defense thereof, and shall not, in connection with any
one such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all Indemnified
Parties, which firm shall be designated in writing by a majority of the
Indemnified Parties who are eligible to select such counsel) . 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. No Indemnified Party may
consent to entry of any judgment or enter into any settlement without the prior
written consent of the Indemnifying Party.
(d) If the indemnification provided for in this Section 6 is held by
a court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage or expense referred to herein,
then the Indemnifying Party, in lieu of indemnifying the Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party with
respect to such loss, liability, claim, damage or expenses in the proportion
that is appropriate to reflect the relative fault of the Indemnifying Party and
the Indemnified Party in connection with the statements or omissions that
resulted in such loss, liability, claim, damage, or expense, as well as any
other relevant equitable considerations. The relative fault of the Indemnifying
Party and the Indemnified Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
7. RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Registrable Securities to the public without registration, after
such time as a public market exists for the Common Stock, the Company shall use
reasonably diligent efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, beginning 90 days
after the Company registers a class of securities under Section 12 of the
Exchange Act or completes a registered offering under the Securities Act;
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements); and
(c) Furnish to any Holder promptly upon request a written statement
as to its compliance with the reporting requirements of Rule 144 (at any time
after 90 days after the Company completes a registered offering under the
Securities Act), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), and a copy of the
most recent annual or quarterly report of the Company.
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8. TERMINATION OF REGISTRATION RIGHTS. No Holder shall be entitled to
exercise any right provided for in this Agreement after the earlier of (a) five
years after the date hereof and (b) the date all Registrable Securities held by
such Holder may be sold in a single three-month period under Rule 144 under the
Securities Act.
9. INFORMATION TO BE PROVIDED BY THE HOLDERS. Each Holder whose
Registrable Securities are included in any registration pursuant to this
Agreement shall furnish the Company such information regarding such Holder and
the distribution proposed by such Holder as may be reasonably requested in
writing by the Company and as shall be required in connection with such
registration or the registration or qualification of such securities under any
applicable state securities law.
10. "STAND-OFF" AGREEMENT. Each Holder, if requested by the managing
underwriter of a registered public offering of securities by the Company, shall
agree not to sell or otherwise transfer or dispose of any Registrable Securities
or other securities of the Company then held by such Holder for a specified
period of time that is customary under the circumstances (not to exceed 180
days) following the effective date of the registration statement for such
offering, provided that (a) no such agreement shall be required unless the other
principal stockholders of the Company enter into a similar agreement covering
the same period of time and (b) such agreement shall contain terms customary for
such agreements. The Company may impose stop transfer instructions to enforce
any required agreement of the Holders under this Section 10.
11. MISCELLANEOUS.
(a) NOTICES. All notices, requests and other communications
hereunder shall be in writing and shall be deemed to have been duly given at the
time of receipt if delivered by hand or by facsimile transmission or three days
after being mailed, registered or certified mail, return receipt requested, with
postage prepaid, to the address or facsimile number (as the case may be) listed
below the signature of each Party on such Party's signature page hereto if any
Party shall have designated a different address or facsimile number by notice to
the other Parties given as provided above, then to the last address or facsimile
number so designated.
(b) SEVERABILITY. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed and interpreted in such manner as to be effective and valid
under applicable law.
(c) WAIVER OR MODIFICATION. Any amendment or modification of this
Agreement shall be effective only if evidenced by a written instrument executed
by the Company and by Investor that hold a majority of the total Registrable
Securities.
11
(d) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without regard to the
principles of conflicts of laws thereof.
(e) ATTORNEYS' FEES. In the event of any dispute involving the terms
hereof, the prevailing parties shall be entitled to collect legal fees and
expenses from the other party to the dispute.
(f) FURTHER ASSURANCES. Each Party agrees to act in accordance
herewith and not to take any action that is designed to avoid the intention
hereof.
(g) SUCCESSORS AND ASSIGNS. This Agreement and the rights and
obligations of the Parties hereunder shall inure to the benefit of, and be
binding upon, their respective successors, assigns and legal representatives.
(h) DEFINED TERMS. Certain defined terms used herein and not
otherwise defined herein shall have them meanings ascribed to such terms in the
Note and Warrant Purchase Agreement, dated as of January 14, 2005, by and
between the Company and the Investor (the "Purchase Agreement").
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURES APPEAR ON FOLLOWING PAGES]
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[COMPANY SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned Party has executed this Agreement as
of the day and year first above written.
VITROTECH CORPORATION,
a Nevada corporation
By: /s/ Xxxxx Xxxxxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Chief Executive Officer
ADDRESS FOR NOTICE:
Vitrotech Corporation
0 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxxxx
Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx, Esq.
20333 S.H. 000, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
13
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned Investor has executed this Agreement
as of the day and year first above written.
VITROBIRTH, LLC
a Delaware limited liability company
By: /s/ Xxxx Xxxxxx
-------------------------------------
Name: Xxxx Xxxxxx
Title: Manager
ADDRESS FOR NOTICE:
Vitrobirth, LLC
00000 Xxxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Facsimile: (___) [_____________]
with a copy to:
Xxxxxxxxx Xxxxxxx LLP
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
14
