EXHIBIT 10.3
EXHIBIT C
TO SECURITIES
PURCHASE AGREEMENT
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
November [__], 2004, by and among LifePoint, Inc., a corporation organized under
the laws of the State of Delaware (the "Company"), and the undersigned (together
with their affiliates, the "Initial Investors").
WHEREAS:
A. In connection with the Securities Purchase Agreement, dated
as of November [__], 2004, by and among the Company and the Initial Investors
(the "Securities Purchase Agreement"), the Company has agreed, upon the terms
and subject to the conditions contained therein, to issue and sell to the
Initial Investors (i) shares of its Series E Convertible Preferred Stock (the
"Preferred Stock") that are convertible into shares of the Company's common
stock, par value $.001 per share (the "Common Stock"), upon the terms and
subject to the limitations and conditions set forth in the Certificate of
Designations, Rights and Preferences with respect to such Preferred Stock (the
"Certificate of Designation") and (ii) warrants (the "Warrants") to acquire
shares of Common Stock. The shares of Common Stock issuable upon conversion of
the Preferred Stock are referred to herein as the "Conversion Shares" and the
shares of Common Stock issuable upon exercise of or otherwise pursuant to the
Warrants are referred to herein as the "Warrant Shares."
B. To induce the Initial Investors to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), and applicable state securities laws.
C. The Company will be filing a proxy or consent statement
(the "Proxy Statement") with the United States Securities and Exchange
Commission (the "SEC"), which proxy statement the SEC will either review (the
"SEC Proxy Review"), or not choose to review (the "SEC Proxy Non-Review").
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investors hereby agree as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall have the following
meanings:
(i) "Investors" means the Initial Investors and any transferees or assignees who
agree to become bound by the provisions of this Agreement in accordance with
Section 9 hereof.
(ii) "Majority Holders" means the holders of at least 50.1% of the Registrable
Securities (as defined below), determined as if all shares of Preferred Stock
and Warrants then outstanding had been converted into or exercised for
Registrable Securities.
(iii) "register," "registered," and "registration" refer to a registration
effected by preparing and filing a Registration Statement or Statements in
compliance with the Securities Act and pursuant to Rule 415 under the Securities
Act or any successor rule providing for offering securities on a continuous
basis ("Rule 415"), and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange Commission
(the "SEC").
(iv) "Registrable Securities" means (a) the Conversion Shares, (b) the Warrant
Shares, (c) any shares of Common Stock issued as a dividend or premium on
Preferred Stock and (d) any other shares of capital stock issued or issuable,
from time to time (on account of any anti-dilution or other adjustment or
otherwise), as payment for penalties or defaults, as a distribution on or in
exchange for or otherwise with respect to any of the foregoing, whether as
default payments or otherwise.
(v) "Registration Statement" means a registration statement of the Company under
the Securities Act.
(b) Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Securities Purchase Agreement.
2. REGISTRATION.
(a) MANDATORY REGISTRATION. The Company shall prepare and file with the SEC a
Registration Statement on Form S-3 (or, if Form S-3 is not then available, on
such form of Registration Statement as is then available to effect a
registration of all of the Registrable Securities, subject to the consent of the
Initial Investors) covering the resale of all of the Registrable Securities on
or before 30 days following the Second Closing (the "Filing Date"). The
Registration Statement filed hereunder, 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 upon conversion of the
Preferred Stock and exercise of the Warrants to prevent dilution resulting from
stock splits, stock dividends or similar transactions. The Registrable
Securities included in the Registration Statement shall be allocated to the
Investors as set forth in Section 11(k) hereof. The Registration Statement (and
each amendment or supplement thereto, and each request for acceleration of
effectiveness thereof) shall be provided to (and subject to the approval of,
which shall not be unreasonably withheld) the Initial Investors and its counsel
prior to its filing or other submission.
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(b) PAYMENTS BY THE COMPANY. The Company shall use its best efforts to cause the
Registration Statement required to be filed pursuant to Section 2(a) hereof to
become effective as soon as practicable, but in no event later than ninety (90)
days following the Filing Date. At the time of effectiveness, the Company shall
ensure that such Registration Statement covers at least 125% of the Registrable
Securities issuable at such time pursuant to the Preferred Stock and the
Warrants (including, if necessary, by filing an amendment prior to the effective
date of the Registration Statement to increase the number of shares covered
thereby). If (i) (A) the Registration Statement required to be filed by the
Company pursuant to Section 2(a) hereof is not filed with the SEC prior to the
Filing Date or declared effective by the SEC on or before the ninetieth (90th)
day after the Filing Date (the "Registration Deadline") for any item that is
within the control of the Company or (B) any Registration Statement required to
be filed by the Company pursuant to Section 3(b) hereof is not declared
effective by the SEC within ninety (90) days after the applicable Registration
Trigger Date (as defined in Section 3(b) hereof), (ii) if, after any such
Registration Statement has been declared effective by the SEC, sales of any of
the Registrable Securities required to be covered by such Registration Statement
(including any Registrable Securities required to be registered pursuant to
Section 3(b) hereof) cannot be made pursuant to such Registration Statement (by
reason of a stop order or the Company's failure to update the Registration
Statement or any other reason outside the control of the Investors), except as
provided in Section 3(g), or (iii) the Common Stock is not listed or included
for quotation on the Nasdaq National Market ("NNM"), the Nasdaq SmallCap Market
("SMALLCAP"), the New York Stock Exchange (the "NYSE"), the American Stock
Exchange (the "AMEX") or the OTC Electronic Bulletin Board (the "OTC") or the
Bulletin Board Exchange (collectively, the "BULLETIN BOARD"), at any time after
the Registration Deadline hereunder, then the Company will make payments to the
Investors in such amounts and at such times as shall be determined pursuant to
this Section 2(b) as partial relief for the damages to the Investors by reason
of any such delay in or reduction of their ability to sell the Registrable
Securities (which remedy shall not be exclusive of any other remedies available
at law or in equity). The Company shall pay to each Investor in cash upon demand
an amount equal to the product of, as applicable, (i) the aggregate Purchase
Price of the Preferred Stock and Warrants purchased at the Closing held by such
Investor on the date giving rise to the Company's obligations hereunder
(including, without limitation, Preferred Stock that has been converted into
Conversion Shares and Warrants that have been exercised for Warrant Shares then
held by such Investor) (the "Aggregate Share Price"), multiplied by (ii) one
one-hundredth (.01), for each thirty (30) day period (prorated on a daily basis
for each portion thereof) (A) after the Filing Date and prior to the date the
Registration Statement is filed with the SEC pursuant to Section 2(a), and (B)
after the Registration Deadline and prior to the date the Registration Statement
filed pursuant to Section 2(a) is declared effective by the SEC, (iii) one and
one half hundredth (.015), for each thirty (30) day period (prorated on a daily
basis for each portion thereof) (A) after the thirtieth (30th) day following the
Registration Deadline and prior to the date the Registration Statement filed
pursuant to Section 2(a) is declared effective by the SEC, (B) after the
ninetieth (90th) day following a Registration Trigger Date (as defined in
Section 3(b)) and prior to the date the Registration Statement filed pursuant to
Section 3(b) hereof is declared effective by the SEC, and (C) during which sales
of any Registrable Securities cannot be made pursuant to any such Registration
Statement after the Registration Statement has been declared effective, or the
Common Stock is not listed or included for quotation on the NNM, SmallCap, NYSE,
AMEX, or the Bulletin Board; except as otherwise provided herein (including as
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provided in Section 3(g)); provided, however, that there shall be excluded from
each such period any delays which are solely attributable to changes (other than
corrections of Company mistakes with respect to information previously provided
by the Investors) required by the Investors in the Registration Statement with
respect to information relating to the Investors, including, without limitation,
changes to the plan of distribution. Notwithstanding the foregoing, in no event
shall the Company be required to pay amounts with respect to (x) both (ii)(A)
and (ii)(B), and (y) both (iii)(B) and (iii)(C) above for the same period of
time. (For example, if the Registration Statement is not effective by the
Registration Deadline, the Company would pay $10,000 for the first thirty (30)
day period thereafter and $15,000 for each subsequent thirty (30) day period
thereafter with respect to each $1,000,000 of Aggregate Share Price until the
Registration Statement becomes effective.) Such amounts shall be paid in cash.
Payments of cash pursuant hereto shall be made within five (5) days after the
end of each period that gives rise to such obligation, provided that, if any
such period extends for more than thirty (30) days, interim payments shall be
made for each such thirty (30) day period. Notwithstanding anything in this
Section 2(b) to the contrary, each Investor shall have the option to receive the
payments due under this Section in either (i) cash or (ii) Common Stock, valued
at the Market Price of the Common Stock for the ninety (90) trading days prior
to the date such Investor is entitled to receive any payment hereunder.
(c) PIGGY-BACK REGISTRATIONS. If, at any time prior to the expiration of the
Registration Period (as defined in Section 3(a) below) the Company shall file
with the SEC a Registration Statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities (other than on Form S-4 or Form S-8 or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans), the Company shall
send to each Investor written notice of such filing, and if, within 15 days
after the date of such notice, such Investor shall so request in writing, the
Company shall include in such Registration Statement all or any part of the
Registrable Securities such Investor requests to be registered. Notwithstanding
the foregoing, in the event that, in connection with any underwritten public
offering, the managing underwriter(s) thereof shall impose a limitation on the
number of shares of Common Stock which may be included in the Registration
Statement because, in such underwriter(s)' judgment, marketing or other factors
dictate such limitation is necessary to facilitate public distribution, then the
Company shall be obligated to include in such Registration Statement only such
limited portion of the Registrable Securities with respect to which such
Investor has requested inclusion hereunder as the underwriter shall permit;
PROVIDED, however, that (i) after giving effect to the immediately preceding
proviso, any such exclusion of Registrable Securities shall be made pro rata
among the Investors seeking to include Registrable Securities and the holders of
other securities having the contractual right to inclusion of their securities
in such Registration Statement by reason of demand registration rights, in
proportion to the number of Registrable Securities or other securities, as
applicable, sought to be included by each such Investor or other holder, and
(ii) no such reduction shall reduce the amount of Registrable Securities
included in the registration below twenty-five (25%) of the total amount of
securities included in such registration. No right to registration of
Registrable Securities under this Section 2(c) shall be construed to limit any
registration required under Section 2(a) hereof. If an offering in connection
with which an Investor is entitled to registration under this Section 2(c) is an
underwritten offering, then each Investor whose Registrable Securities are
included in such Registration Statement shall, unless otherwise agreed by the
Company, offer and sell such Registrable Securities in an underwritten offering
using the same underwriter or underwriters and, subject to the provisions of
this Agreement, on the same terms and conditions as other shares of Common Stock
included in such underwritten offering.
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(d) ELIGIBILITY FOR FORM S-3. The Company represents and warrants that it meets
the requirements for the use of Form S-3 for registration of the resale by the
Initial Investors of the Registrable Securities and the Company shall file all
reports required to be filed by the Company with the SEC in a timely manner so
as to maintain such eligibility for the use of Form S-3.
(e) RULE 416; NOTICE OF REGISTRATION TRIGGER DATE. The Company and each Initial
Investor each acknowledge that an indeterminate number of Registrable Securities
shall be registered pursuant to Rule 416 under the Securities Act so as to
include in such Registration Statement any and all Registrable Securities which
may become issuable to prevent dilution resulting from stock splits, stock
dividends or similar transactions, including those resulting from the issuance
of additional securities which occur from the anti-dilution adjustments
contained in the Warrants (collectively, the "RULE 416 SECURITIES"). In this
regard, the Company agrees to take all steps necessary to ensure that all Rule
416 Securities are registered pursuant to Rule 416 under the Securities Act in
the Registration Statement and, absent guidance from the SEC or other definitive
authority to the contrary, the Company shall affirmatively support and not take
any action adverse to the position that the Registration Statements filed
hereunder cover all of the Rule 416 Securities. If the Company determines that
the Registration Statement(s) filed hereunder do not cover all of the Rule 416
Securities, the Company shall immediately provide to each Investor written
notice (a "RULE 416 NOTICE") setting forth the basis for the Company's position
and the authority therefor. In the event that a Registration Trigger Date (as
defined below) occurs, the Company shall provide each Initial Investor written
notice of such Registration Trigger Date within three (3) business days
thereafter
3. OBLIGATIONS OF THE COMPANY.
In connection with the registration of the Registrable Securities, the Company
shall have the following obligations:
(a) The Company shall respond promptly to any and all comments made by the staff
of the SEC to the Registration Statement required by Section 2(a), and shall
submit to the SEC before the close of business on or before the third business
day immediately following the business day on which the Company learns (either
by telephone or in writing) that no review of such Registration Statement will
be made by the SEC or that the staff of the SEC has no further comments on such
Registration Statement, as the case may be, a request for acceleration of the
effectiveness of such Registration Statement to a time and date as soon as
practicable. The Company shall keep such Registration Statement effective
pursuant to Rule 415 at all times until such date as is the earlier of (i) the
date on which all of the Registrable Securities have been sold and (ii) the date
on which all of the Registrable Securities, in the reasonable opinion of counsel
to the Initial Investors, may be immediately sold to the public without
registration or restriction pursuant to Rule 144(k) under the Securities Act or
any successor provision (the "Registration Period"), which Registration
Statement (including any amendments or supplements thereto and prospectuses
contained therein and all documents incorporated by reference therein) (i) shall
comply in all material respects with the requirements of the Securities Act and
the rules and regulations of the SEC promulgated thereunder and (ii) shall not
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contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein not
misleading. The financial statements of the Company included in the Registration
Statement or incorporated by reference therein will comply as to form in all
material respects with the applicable accounting requirements and the published
rules and regulations of the SEC applicable with respect thereto. Such financial
statements will be prepared in accordance with U.S. generally accepted
accounting principles, consistently applied, during the periods involved (except
(i) as may be otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they
may not include footnotes or may be condensed on summary statements and fairly
present in all material respects the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to immaterial year-end
adjustments).
(b) The Company shall use its best efforts, to prepare and file with the SEC
such amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities of the Company covered by the Registration
Statement until such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof as set forth in the Registration Statement. In the event the
number of shares available under a Registration Statement filed pursuant to this
Agreement is, for any three (3) consecutive trading days (the last of such three
(3) trading days being the "REGISTRATION TRIGGER DATE"), insufficient to cover
one hundred twenty five percent (125%) of the Registrable Securities issued or
issuable upon conversion (without giving effect to any limitations on conversion
contained in Article IV.D of the Certificate of Designation) of the Preferred
Stock and exercise of the Warrants, (without giving effect to any limitations on
exercise contained in Section 7(g) of the Warrants), the Company shall provide
each Initial Investor with written notice of such Registration Trigger Date
within three business days thereafter and amend the Registration Statement, or
file a new Registration Statement (on the short form available therefor, if
applicable), or both, so as to cover one hundred percent (100%) of the
Registrable Securities issued or issuable (without giving effect to any
limitation on conversion or exercise contained in the Certificate of Designation
or the Warrants) as of the Registration Trigger Date, in each case, as soon as
practicable, but in any event within fifteen (15) days after the Registration
Trigger Date (based on the market price then in effect of the Common Stock and
other relevant factors on which the Company reasonably elects to rely). The
Company shall cause such amendment(s) and/or new Registration Statement to
become effective as soon as practicable following the filing thereof. In the
event the Company fails to obtain the effectiveness of any such Registration
Statement within ninety (90) days after a Registration Trigger Date, each
Investor shall thereafter have the option, exercisable in whole or in part at
any time and from time to time by delivery of a written notice to the Company
(the "Mandatory Redemption Notice"), to require the Company to purchase for
cash, at an amount per share equal to the Face Amount ( as defined in the
Certificate of Designation), plus all accrued and unpaid dividends, multiplied
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by 125%, a portion of the Investor's Preferred Stock and Warrants such that the
total number of Registrable Securities included on the Registration Statements
for resale by such Investor exceeds 100% of the Registrable Securities issued or
issuable upon conversion (without giving effect to any limitations on conversion
contained in Article IV.D of the Certificate of Designation) of such Investor's
Preferred Stock and exercise of such Investor's Warrants. If the Company fails
to redeem any of such shares, within five (5) business days after its receipt of
a Mandatory Redemption Notice, then such Investor shall be entitled to the
remedies provided in Article VIII.A of the Certificate of Designation.
(c) The Company shall furnish to each Investor, promptly after the same is
prepared and publicly distributed, filed with the SEC, or received by the
Company, one copy of the Registration Statement and any amendment thereto, each
preliminary prospectus and prospectus and each amendment or supplement thereto.
In the case of the Registration Statement referred to in Section 2(a), the
Company shall furnish to the core Investor's legal counsel, each letter written
by or on behalf of the Company to the SEC or the staff of the SEC (including,
without limitation, any request to accelerate the effectiveness of the
Registration Statement or amendment thereto), and each item of correspondence
from the SEC or the staff of the SEC, in each case relating to the Registration
Statement (other than any portion, if any, thereof which contains information
for which the Company has sought confidential treatment). The Company shall
furnish to each Investor whose Registrable Securities are included in the
Registration Statement and the CORE Investors' Counsel (i) by the next business
day after the date of effectiveness of the Registration Statement or any
amendment thereto, a notice stating that the Registration Statement or amendment
has been declared effective, and (ii) such number of copies of a prospectus,
including a preliminary prospectus, and all amendments and supplements thereto
and such other documents as such Investor may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Investor.
(d) The Company shall use its best efforts to (i) register and qualify the
Registrable Securities covered by the Registration Statement under such other
securities or "blue sky" laws of such jurisdictions in the United States as each
Investor who holds Registrable Securities being offered reasonably requests,
(ii) prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (a) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (b) subject itself to general taxation in any such jurisdiction,
(c) file a general consent to service of process in any such jurisdiction, (d)
provide any undertakings that cause the Company undue expense or burden, or (e)
make any change in its charter or by-laws, which in each case the Board of
Directors of the Company determines to be contrary to the best interests of the
Company and its stockholders.
(e) As promptly as practicable after becoming aware of such event, the Company
shall notify each Investor by telephone and facsimile of the happening of any
event, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and promptly prepare a supplement or
amendment to the Registration Statement to correct such untrue statement or
omission, and deliver such number of copies of such supplement or amendment to
each Investor as such Investor may reasonably request.
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(f) The Company shall use its best efforts (i) to prevent the issuance of any
stop order or other suspension of effectiveness of a Registration Statement
(other than as permitted herein or in the Securities Purchase Agreement), and,
if such an order is issued, to obtain the withdrawal of such order at the
earliest practicable moment (including in each case by amending or supplementing
such Registration Statement) and (ii) to notify each Investor who holds
Registrable Securities being sold of the issuance of such order and the
resolution thereof (and if such Registration Statement is supplemented or
amended, deliver such number of copies of such supplement or amendment to each
Investor as such Investor may reasonably request).
(g) DELAY PERIODS; SUSPENSION OF SALES.
(i) If, at any time prior to the expiration of the Registration Period
(as defined below), in the good faith reasonable judgment of the Company's Board
of Directors, the disposition of Registrable Securities pursuant to the
Registration Statement would require the premature disclosure of material
non-public information which may reasonably be expected to have an adverse
effect on the Company, then the Company shall not be required to maintain the
effectiveness of or amend or supplement the Registration Statement for a period
(a "Disclosure Delay Period") expiring upon the earlier to occur of (i) the date
on which such material information is disclosed to the public or ceases to be
material or (ii) subject to Section 3(g)(ii) below, up to twenty (20) days after
the date on which the Company provides a notice to the Investors under Section
3(e) hereof stating that the failure to disclose such non-public information
causes the prospectus included in the Registration Statement, as then in effect,
to include an untrue statement of a material fact or to omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading (each, a "Disclosure Delay Period Notice"). For the avoidance of
doubt, in no event shall a Disclosure Delay Period exceed twenty (20) days.
(ii) The Company will give prompt written notice, in the manner
prescribed by Section 3(e) hereof, to the Investors of each Disclosure Delay
Period. If practicable, such notice shall estimate the duration of such
Disclosure Delay Period. Each Investor agrees that, upon receipt of a Disclosure
Delay Period Notice prior to the Investor's disposition of all such Registrable
Securities, Investor will forthwith discontinue the disposition of such
Registrable Securities pursuant to the Registration Statement, and will not
deliver any prospectus forming a part thereof in connection with any sale of
such Registrable Securities until the expiration of such Disclosure Delay
Period. In addition, the provisions of Section 2(b) hereof shall not apply to
the Disclosure Delay Periods. Notwithstanding anything in this Section 3 to the
contrary, the Company shall not deliver more than two (2) Disclosure Delay
Period Notices in any one (1) year period and there shall not be more than an
aggregate of sixty (60) calendar days in any twelve (12) month period during
which the Company is in a Disclosure Delay Period nor more than an aggregate of
twenty (20) calendar days in any ninety (90) calendar day period during which
the Company is in a Disclosure Delay Period.
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(h) The Company shall permit a single firm of counsel designated by the core
Investors to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time prior to its filing with the
SEC, and not file any document in a form to which such counsel reasonably
objects.
(i) The Company shall make generally available to its security holders as soon
as practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the Securities Act) covering a twelve-month period beginning not
later than the first day of the Company's fiscal quarter next following the
effective date of the Registration Statement which compliance will be met
through the Company's filing, on an appropriate form, the appropriate report of
the Company as required by the Securities Exchange Act of 1934, as amended;
provided that such form meets the requirements of Rule 158.
(j) The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction, (iv) such information has been
made generally available to the public other than by disclosure in violation of
this or any other agreement, or (v) such Investor consents to the form and
content of any such disclosure. The Company agrees that it shall, upon learning
that disclosure of such information concerning an Investor is sought in or by a
court or governmental body of competent jurisdiction or through other means,
give prompt notice to such Investor prior to making such disclosure, and allow
the Investor, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.
(k) The Company shall have filed an Application for Listing of Additional Shares
with The American Stock Exchange (the "AMEX") on or before the Closing. The
Company will use its best efforts to continue the listing and trading of its
Common Stock on the "AMEX") and will comply in all material respects with the
reporting, filing and other obligations under the bylaws or rules of the AMEX.
The Company shall promptly provide to each holder of Preferred Stock and/or
Warrants copies of any notices it receives regarding the continued eligibility
of the Common Stock for trading on the AMEX or, if applicable, any securities
exchange or automated quotation system on which securities of the same class or
series issued by the Company are then listed or quoted, if any.
(l) The Company shall provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the effective date
of the Registration Statement.
(m) The Company shall cooperate with the Investors who hold Registrable
Securities being offered and the managing underwriter or underwriters, if any,
to facilitate the timely preparation and delivery of certificates (not bearing
any restrictive legends to the extent permitted by the Securities Purchase
Agreement) representing Registrable Securities to be offered pursuant to the
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Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the Investors may reasonably request and
registered in such names as the Investors may request. Without limiting the
generality of the foregoing, within three business days after any Registration
Statement that includes Registrable Securities is declared effective by the SEC,
the Company shall cause legal counsel selected by the Company to deliver to the
transfer agent for the Registrable Securities (with copies to any Investor whose
Registrable Securities are included in such Registration Statement), an opinion
of such counsel in the form attached hereto as EXHIBIT A. Notwithstanding the
foregoing, the Company may forward a letter to its transfer agent requesting the
removal of the restrictive legend in the manner set forth in this Section 3(m),
which request shall be acceptable to the Purchasers provided that the transfer
agent sends a letter to the Company on or before the date of the First Closing
and Second Closing confirming that it will remove such legend in accordance with
this paragraph.
(n) At the request of any Investor, the Company shall prepare and file with the
SEC such amendments (including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with such
Registration Statement as may be necessary in order to change the plan of
distribution set forth in such Registration Statement.
(o) The Company shall comply with all applicable laws related to a Registration
Statement and offering and sale of securities and all applicable rules and
regulations of governmental authorities in connection therewith (including,
without limitation, the Securities Act and the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated by the SEC).
(p) From and after the date of this Agreement, the Company shall not, and shall
not agree to, allow the holders of any securities of the Company to include any
of their securities which are not Registrable Securities in the Registration
Statement under Section 2(a) hereof or any amendment or supplement thereto under
Section 3(b) hereof without the consent of the Majority Holders.
(q) The Company shall make available for inspection by (i) each Investor, (ii)
one firm of attorneys and one firm of accountants or other agents retained by
the Investors, and (iii) one firm of attorneys retained by all such underwriters
(collectively, the "INSPECTORS") all pertinent financial and other records, and
pertinent corporate documents and properties of the Company (collectively, the
"RECORDS"), as shall be reasonably deemed necessary by each Inspector to enable
such Inspector to exercise its due diligence responsibility, and cause the
Company's officers, directors and employees to supply all information which any
Inspector may reasonably request for purposes of such due diligence; PROVIDED,
HOWEVER, that each Inspector shall hold in confidence and shall not make any
disclosure (except to an Investor) of any Record or other information which the
Company determines in good faith to be confidential, and of which determination
the Inspectors are so notified, unless (A) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any Registration
Statement, (B) the release of such Records is ordered pursuant to a subpoena or
other order from a court or government body of competent jurisdiction, or (C)
the information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement. Nothing
herein shall be deemed to limit any Investor's ability to sell Registrable
Securities in a manner that is otherwise consistent with applicable laws and
regulations.
10
(s) The Company shall not grant any parties, other than the holders of the
Preferred Stock, any rights to register the Company's securities. If any
stockholders of the Company have any such rights in effect on the date hereof,
the Company shall, prior to the Closing, have all such stockholders irrevocably
waive such registration rights, such waivers to be in form and substance
reasonably satisfactory to the Investors.
4. OBLIGATIONS OF THE INVESTORS. In connection with the registration of the
Registrable Securities, the Investors shall have the following obligations:
(a) It shall be a condition precedent to the obligations of the Company to
complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable Securities
held by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. At least five trading days
prior to the first anticipated filing date of the Registration Statement, the
Company shall notify each Investor of the information the Company requires from
each such Investor.
(b) Each Investor, by such Investor's acceptance of the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of the Registration Statement
hereunder, unless such Investor has notified the Company in writing of such
Investor's election to exclude all of such Investor's Registrable Securities
from such Registration Statement.
(c) Each Investor agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 3(e), such Investor
will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities until such
Investor's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(e) and, if so directed by the Company, such Investor
shall deliver to the Company (at the expense of the Company) or destroy (and
deliver to the Company a certificate of destruction) all copies in such
Investor's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. Notwithstanding anything to the
contrary, subject to compliance with applicable laws, the Company shall cause
the transfer agent for the Registrable Securities to deliver unlegended shares
of Common Stock to a transferee of an Investor in accordance with the terms of
the Certificate of Designation and Warrants in connection with any sale of
Registrable Securities with respect to which such Investor has entered into a
contract for sale prior to receipt of such notice and for which such Investor
has not yet settled.
5. EXPENSES OF REGISTRATION. All reasonable expenses incurred by the Company or
the Investors (but only for reasonable attorney's fees of one counsel for the
Investors) in connection with registrations, filings or qualifications pursuant
to Sections 2 and 3 above, including, without limitation, all registration,
listing and qualifications fees, printers and accounting fees, the fees and
disbursements of counsel for the Company, and the fees and disbursements of one
counsel selected by the Investors, shall be borne by the Company. The Investor
11
shall be responsible for paying the brokerage fees or commissions. In addition,
the Company shall pay each Investor's costs and expenses (including legal fees)
incurred in connection with the enforcement of the rights of such Investor
hereunder.
6. INDEMNIFICATION. In the event any Registrable Securities are included in a
Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify, hold harmless
and defend (i) each Investor who holds such Registrable Securities, and (ii) the
directors, officers, partners, members, employees and agents of such Investor
and each person who controls any Investor within the meaning of Section 15 of
the Securities Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), if any, (each, an "Indemnified Person"), against
any joint or several losses, claims, damages, liabilities or expenses
(collectively, together with actions, proceedings or inquiries by any regulatory
or self-regulatory organization, whether commenced or threatened, in respect
thereof, "Claims") to which any of them may become subject insofar as such
Claims arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in a Registration Statement or the omission
or alleged omission to state therein a material fact required to be stated or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities (the matters in the foregoing clauses (i) through (iii) being,
collectively, "Violations"). Subject to the restrictions set forth in Section
6(c) with respect to the number of legal counsel, the Company shall reimburse
the Investors and each other Indemnified Person, promptly as such expenses are
incurred and are due and payable, for any reasonable legal fees or other
reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i) shall
not apply to a Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person expressly for use in the Registration
Statement or any such amendment thereof or supplement thereto; (ii) shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld; and (iii) with respect to any preliminary prospectus,
shall not inure to the benefit of any Indemnified Person if the untrue statement
or omission of material fact contained in the preliminary prospectus was
corrected on a timely basis in the prospectus, as then amended or supplemented,
if such corrected prospectus was timely made available by the Company pursuant
to Section 3(c) hereof, and the Indemnified Person was promptly advised in
writing not to use the incorrect prospectus prior to the use giving rise to a
Violation and such Indemnified Person, notwithstanding such advice, used it.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person and shall survive
the transfer of the Registrable Securities by the Investors pursuant to Section
9 hereof.
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(b) In connection with any Registration Statement in which an Investor is
participating, each such Investor agrees severally and not jointly to indemnify,
hold harmless and defend, to the same extent and in the same manner set forth in
Section 6(a), the Company, each of its directors, each of its officers who signs
the Registration Statement, its employees, agents and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and any other stockholder selling securities
pursuant to the Registration Statement or any of its directors or officers or
any person who controls such stockholder within the meaning of the Securities
Act or the Exchange Act (collectively and together with an Indemnified Person,
an "Indemnified Party"), against any Claim to which any of them may become
subject, under the Securities Act, the Exchange Act or otherwise, insofar as
such Claim arises out of or is based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement; and subject to
Section 6(c) such Investor will reimburse any legal or other expenses (promptly
as such expenses are incurred and are due and payable) reasonably incurred by
them in connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 6(b) shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent shall not be
unreasonably withheld; provided, further, however, that the Investor shall be
liable under this Agreement (including this Section 6(b) and Section 7) for only
that amount as does not exceed the net proceeds actually received by such
Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9 hereof. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented.
(c) Promptly after receipt by an Indemnified Person or Indemnified Party under
this Section 6 of notice of the commencement of any action (including any
governmental action), such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to made against any indemnifying party under this
Section 6, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that such indemnifying party shall not be entitled to assume such
defense and an Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential conflicts of interest between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding or the actual or potential defendants in, or targets of, any such
action include both the Indemnified Person or the Indemnified Party and the
13
indemnifying party and any such Indemnified Person or Indemnified Party
reasonably determines that there may be legal defenses available to such
Indemnified Person or Indemnified Party which are in conflict with those
available to such indemnifying party. The indemnifying party shall pay for only
one separate legal counsel for the Indemnified Persons or the Indemnified
Parties, as applicable, and such legal counsel shall be selected by the Majority
Holders of the Registrable Securities included in the Registration Statement to
which the Claim relates (with the approval of the Initial Investors if it holds
Registrable Securities included in such Registration Statement), if the
Investors are entitled to indemnification hereunder, or by the Company, if the
Company is entitled to indemnification hereunder, as applicable. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is actually prejudiced in its
ability to defend such action. The indemnification required by this Section 6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.
7. CONTRIBUTION. To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law as is appropriate to
reflect the relative fault of the indemnifying party, on the one hand, and the
Indemnified Person or Indemnified Party, as the case may be, on the other hand,
with respect to the Violation giving rise to the applicable Claim; provided,
however, that (i) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6, (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
such fraudulent misrepresentation, and (iii) contribution (together with any
indemnification or other obligations under this Agreement) by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.
8. REPORTS UNDER THE EXCHANGE ACT. With a view to making available to the
Investors the benefits of Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the SEC that may at any time permit the
Investors to sell securities of the Company to the public without registration
("Rule 144"), the Company agrees to:
(i) file with the SEC in a timely manner and make and keep available
all reports and other documents required of the Company under the Securities Act
and the Exchange Act so long as the Company remains subject to such requirements
(it being understood that nothing herein shall limit the Company's obligations
under Section 4(c) of the Securities Purchase Agreement) and the filing and
availability of such reports and other documents is required for the applicable
provisions of Rule 144; and
14
(ii) furnish to each Investor so long as such Investor owns shares of
Preferred Stock, Warrants or Registrable Securities, promptly upon request, (i)
a written statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy
of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit the Investors to sell such securities
under Rule 144 without registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS. The rights of the Investors hereunder,
including the right to have the Company register Registrable Securities pursuant
to this Agreement, shall be automatically assignable by each Investor to any
transferee of all or any portion of the shares of Preferred Stock, the Warrants
or the Registrable Securities if: (i) the Investor agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company after such assignment, (ii) the Company is furnished
with written notice of (a) the name and address of such transferee or assignee,
and (b) the securities with respect to which such registration rights are being
transferred or assigned, (iii) following such transfer or assignment, the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities laws, (iv)
the transferee or assignee agrees in writing for the benefit of the Company to
be bound by all of the provisions contained herein, and (v) such transfer shall
have been made in accordance with the applicable requirements of the Securities
Purchase Agreement, the Certificate of Designation for the Preferred Stock and
the Warrants, as applicable. In addition, and notwithstanding anything to the
contrary contained in this Agreement, the Securities Purchase Agreement, the
Certificate of Designation or the Warrants, the Securities (as defined in the
Securities Purchase Agreement) may be pledged, and all rights of the Investors
under this Agreement or any other agreement or document related to the
transactions contemplated hereby may be assigned, without further consent of the
Company, to a bona fide pledgee in connection with an Investor's margin or
brokerage account, provided such pledge is consistent with applicable laws,
rules and regulations, including those promulgated under the Securities Act.
10. AMENDMENT OF REGISTRATION RIGHTS. Provisions of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with
written consent of the Company, each of the core Investors (to the extent such
core Investor or its affiliates still owns Preferred Stock, Warrants or
Registrable Securities) and the Majority Holders or, in the case of a waiver,
with the written consent of the party charged with the enforcement of any such
provision; PROVIDED, HOWEVER, that (a) no consideration shall be paid to an
Investor by the Company in connection with an amendment hereto unless each
Investor similarly affected by such amendment receives a pro rata amount of
consideration from the Company; and (b) unless an Investor otherwise agrees,
each amendment hereto must similarly affect each Investor. Any amendment or
waiver effected in accordance with this Section 10 shall be binding upon each
Investor and the Company.
11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of Registrable Securities
whenever such person or entity owns of record such Registrable Securities. If
the Company receives conflicting instructions, notices or elections from two or
more persons or entities with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.
15
(b) Any notices required or permitted to be given under the terms of this
Agreement shall be sent by certified or registered mail (return receipt
requested), or by a nationally recognized overnight delivery service, or
delivered personally or by courier or by confirmed telecopy, and shall be
effective five (5) days after being placed in the mail, if mailed certified or
registered mailed, or one (1) day after being delivered to the nationally
recognized overnight delivery service, if delivered in such manner, or upon
receipt or refusal of receipt, if delivered personally or by courier or
confirmed telecopy, in each case addressed to a party. The addresses for such
communications shall be:
If to the Company:
LifePoint, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxxx, Chief Executive Officer
with a copy simultaneously transmitted by like means to:
Xxxxxx & Xxxxxxx LLP
000 X. Xxxxxxxx, Xxxxx 0000
Xxx Xxxxx, XX
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxx, Esq.
and if to any Investor, at such address as such Investor shall have provided in
writing to the Company, or at such other address as each such party furnishes by
notice given in accordance with this Section 11(b).
(c) Failure of any party to exercise any right or remedy under this Agreement or
otherwise, or delay by a party in exercising such right or remedy, shall not
operate as a waiver thereof.
(d) This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware applicable to contracts made and to be performed
in the State of Delaware. Each of the Company and the Investor irrevocably
consents to the jurisdiction of the United States federal courts and the state
courts located in the State of Delaware in any suit or proceeding based on or
arising under this Agreement and irrevocably agrees that all claims in respect
of such suit or proceeding may be determined in such courts. Each of the Company
and the Investor irrevocably waives the defense of an inconvenient forum to the
maintenance of such suit or proceeding. Each of the Company and the Investor
further agrees that service of process mailed by first class mail shall be
16
deemed in every respect effective service of process in any such suit or
proceeding. Nothing herein shall affect the Company's or the Investors' right to
serve process in any other manner permitted by law. Each of the Company and the
Investor agrees that a final non-appealable judgment in any such suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.
(e) This Agreement, and the other Transaction Documents and the Letter Agreement
(including all schedules and exhibits thereto) constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Agreement, and the other
Transaction Documents and the Letter Agreement supersede all prior agreements
and understandings among the parties hereto with respect to the subject matter
hereof and thereof.
(f) Subject to the requirements of Section 9 hereof, this Agreement shall inure
to the benefit of and be binding upon the successors and assigns of each of the
parties hereto.
(g) The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.
(h) This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same
agreement. This Agreement, once executed by a party, may be delivered to the
other party hereto by facsimile transmission of a copy of this Agreement bearing
the signature of the party so delivering this Agreement.
(i) Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
(j) All consents, approvals and other determinations to be made by the Investors
pursuant to this Agreement shall be made by the Majority Holders.
(k) The initial number of Registrable Securities included on any Registration
Statement and each increase to the number of Registrable Securities included
thereon shall be allocated pro rata among the Investors based on the number of
Registrable Securities held by each Investor at the time of such establishment
or increase, as the case may be. In the event an Investor shall sell or
otherwise transfer any of such holder's Registrable Securities, each transferee
shall be allocated a pro rata portion of the number of Registrable Securities
included on a Registration Statement for such transferor. Any shares of Common
Stock included on a Registration Statement and which remain allocated to any
person or entity which does not hold any Registrable Securities shall be
allocated to the remaining Investors, pro rata based on the number of shares of
Registrable Securities then held by such Investors. For the avoidance of doubt,
the number of Registrable Securities held by any Investor shall be determined as
if all shares of Preferred Stock and Warrants then outstanding were converted
into or exercised for Registrable Securities.
17
(l) Each party to this Agreement has participated in the negotiation and
drafting of this Agreement. As such, the language used herein shall be deemed to
be the language chosen by the parties hereto to express their mutual intent, and
no rule of strict construction will be applied against any party to this
Agreement.
(m) For purposes of this Agreement, the term "business day" means any day other
than a Saturday or Sunday or a day on which banking institutions in the State of
New York are authorized or obligated by law, regulation or executive order to
close, and the term "trading day" means any day on which the AMEX, or if the
Common Stock is not then traded on the AMEX, the principal securities exchange
or trading market where the Common Stock is then listed or traded, is open for
trading.
[Remainder of page left blank.]
18
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first above written.
LIFEPOINT, INC.:
By: _________________________________
Name: Xxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
INVESTOR (FIRM NAME):
By: _________________________________
Name:____________________________
Title:_____________________________
19
EXHIBIT A
[Date]
[Transfer Agent]
RE: [NAME OF COMPANY]
Ladies and Gentlemen:
We are counsel to [Name of Company], a corporation organized under the laws of
the State of [___________] (the "COMPANY"), and we understand that [Name of
Investor] (the "Holder") has purchased from the Company (i) [shares of Series
[__] Convertible Preferred Stock / [secured] convertible promissory notes] that
are convertible into shares of the Company's common stock, par value [$___] per
share (the "COMMON STOCK"), and (ii) warrants to acquire shares of Common Stock.
Pursuant to a Registration Rights Agreement, dated as of [_____________ ___,
____], by and among the Company and the signatories thereto (the "REGISTRATION
RIGHTS AGREEMENT"), the Company agreed with the Holder, among other things, to
register the Registrable Securities (as that term is defined in the Registration
Rights Agreement) under the Securities Act of 1933, as amended (the "SECURITIES
ACT"), upon the terms provided in the Registration Rights Agreement. In
connection with the Company's obligations under the Registration Rights
Agreement, on [_____________ ___, ____], the Company filed a Registration
Statement on Form S-___ (File No. 333- _____________) (the "REGISTRATION
STATEMENT") with the Securities and Exchange Commission (the "SEC") relating to
the Registrable Securities, which names the Holder as a selling stockholder
thereunder. The Registration Statement was declared effective by the SEC on
_____________, ____.
In connection with the foregoing, we advise you that a member of the SEC's staff
has advised us by telephone that the SEC has entered into an order declaring the
Registration Statement effective under the Securities Act at [time of
effectiveness] on [date of effectiveness], and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC.
Based on the foregoing, we are of the opinion that the Registrable Securities
are available for resale under the Securities Act pursuant to the Registration
Statement.
Very truly yours,
[NAME OF COUNSEL]
cc: [Name of Investor]
