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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of August
26, 1997 by and among SELFCARE, INC., a corporation organized under the laws of
the State of Delaware, with headquarters located at 000 Xxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxxxx, 00000 (the "COMPANY"), and the undersigned (together
with affiliates, the "INITIAL INVESTORS").
WHEREAS:
A. In connection with the Securities Purchase Agreement of even date
herewith by and between 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 Units
consisting of (i) shares of its Series B Convertible Preferred Stock (the
"PREFERRED STOCK") that is 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 ("WARRANTS") that are
exercisable for shares of Common Stock. The shares of Common Stock issuable upon
conversion of the Preferred Stock or otherwise pursuant to the terms of the
Certificate of Designation shall be referred to herein as the "CONVERSION
SHARES" and the shares of Common Stock issuable upon exercise of the Warrants or
otherwise pursuant to the terms of the Warrants shall be referred to herein as
the "WARRANT SHARES"); and
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.
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:
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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 10 hereof.
(ii) "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").
(iii) "REGISTRABLE SECURITIES" means (a) the
Conversion Shares (including any Conversion Shares issuable with respect to
Conversion Default Payments under the Certificate of Designation or in
redemption of any Preferred Stock) issued or issuable with respect to the
Preferred Stock; or (b) the Warrant Shares issued or issuable with respect to
the Warrants; and (c) any shares of capital stock issued or issuable, from time
to time (with any adjustments), as a distribution on or in exchange for or
otherwise with respect to any of the foregoing.
(iv) "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 use all
commercial reasonable efforts to (i) prepare as soon as practicable after the
date hereof (and in no event later than the fiftieth day following the Closing
Date (the "FILING DEADLINE")), and (ii) 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 (as
determined pursuant to Section 11(j) hereof)) covering the resale of at least
1,200,000 Registrable Securities, which Registration Statement, to the extent
allowable under the Securities Act and the Rules promulgated thereunder
(including Rule 416), shall state that such Registration Statement also covers
such indeterminate number of additional shares of Common Stock as may become
issuable upon conversion of the Preferred Stock and exercise of the Warrants (x)
to prevent dilution resulting from stock splits, stock dividends or similar
transactions or (y) by reason of reductions in the conversion price of the
Preferred Stock or the exercise price of the
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Warrants in accordance with the terms thereof, including, but not limited to,
the terms which cause the Variable Conversion Price of the Preferred Stock to
decrease as the bid price of the Common Stock decreases. The Registrable
Securities included in the Registration Statement shall be allocated to the
Investors as set forth in Section 12(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 approval shall be granted or denied within two (2) business days of the
request therefor and shall not be unreasonably withheld) the Initial Investors
and their counsel prior to its filing or other submission.
b. UNDERWRITTEN OFFERING. If any offering pursuant to a
Registration Statement pursuant to Section 2(a) hereof involves an underwritten
offering, (i) the Investors who hold a majority in interest of the Registrable
Securities subject to such underwritten offering (the "PARTICIPATING
INVESTORS"), with the consent of the Initial Investors, shall have the right to
select one legal counsel to represent the Investors and (ii) the Participating
Investors and the Company shall jointly select an investment banker or bankers
and manager or managers to administer the offering, which investment banker or
bankers or manager or managers shall be reasonably satisfactory to the
Participating Investors and the Company. In the event that any Investors elect
not to participate in such underwritten offering, the Registration Statement
covering all of the Registrable Securities shall contain appropriate plans of
distribution reasonably satisfactory to the Investors participating in such
underwritten offering and the Investors electing not to participate in such
underwritten offering (including, without limitation, the ability of
nonparticipating Investors to sell from time to time and at any time during the
effectiveness of such Registration Statement).
c. PAYMENTS BY THE COMPANY. The Company shall 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 November 25,
1997 (the "REGISTRATION DEADLINE"). If (i) the Registration Statement(s)
covering the Registrable Securities required to be filed by the Company pursuant
to Section 2(a) hereof is not filed with the SEC by the Filing Deadline or is
not declared effective by the SEC on or before the Registration Deadline (other
than, in each case, because of a Delay Period permitted hereby) or if, after the
Registration Statement has been declared effective by the SEC, sales of all the
Registrable Securities (including any Registrable Securities required to be
registered pursuant to Section 4(b) hereof) cannot be made pursuant to the
Registration Statement (by reason of a stop order or the Company's failure to
update the Registration Statement) other than during a Delay Period permitted
hereby (the occurrences set forth in this clause (i) are referred to as
"Registration Failure") or (ii) the Common Stock is not listed or included for
quotation on the Nasdaq National Market ("NASDAQ"), the New York Stock Exchange
(the "NYSE") or the American Stock Exchange (the "AMEX") at any time after the
Registration Deadline, 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(c) 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 an amount equal to the product
of (i) the aggregate Stated Value of the Preferred Stock held by such Investor
(including, without limitation, Preferred Stock that has been converted into
Conversion
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Shares then held by such Investor) (the "AGGREGATE SHARE PRICE") multiplied by
(ii) the Registration Percentage (as defined below) multiplied by (iii) the sum
of: (x) the number of months (pro rated for partial months) after the Filing
Deadline and prior to the date a Registration Statement is filed with the SEC in
accordance with Section 2(a) (unless such Registration Statement is declared
effective by the Registration Deadline in which case, this subpart (x) shall
equal zero), plus (y) the number of months (prorated for partial months) after
the Registration Deadline and prior to the date the Registration Statement filed
pursuant to Section 2(a) is declared effective by the SEC, plus (z) the number
of additional months (prorated for partial months) that sales of any Registrable
Securities cannot be made pursuant to the Registration Statement after the
Registration Statement has been declared effective (other than Delay Periods) or
the Common Stock is not listed or included for quotation on Nasdaq, the NYSE or
AMEX; provided, however that there shall be excluded from each such period any
days included in any Delay Period and 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. (For
example, if the Registration Statement is not effective by the Registration
Deadline and the Registration Percentage applicable to such failure is three
hundredths (.03), the Company would pay $30,000 per month for each $1,000,000 of
Aggregate Share Price until the Registration Statement becomes effective.) Such
amounts shall be paid in cash within five (5) business days of the end of the
period creating such obligation. If such payment is not made to Investors during
such five (5) business day period, the Investors may elect to convert such
payment amount into Common Stock at the "CONVERSION PRICE" (as defined in the
Certificate of Designation). Any shares of Common Stock issued upon conversion
of such amounts shall be Registrable Securities. If the Investor desires to
convert the amounts due hereunder into Registrable Securities it shall so notify
the Company in writing within two (2) business days after the date on which such
amounts are first payable in cash and such amounts shall be so convertible
(pursuant to the mechanics set forth under Article IV of the Certificate of
Designation), beginning on the last day upon which the cash amount would
otherwise be due in accordance with the following sentence. 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. As used herein, the "Registration Percentage" means (I)
two hundredths (.02) with respect to any Registration Failure resulting from
circumstances which the Corporation would be entitled to initiate or continue a
Disclosure Delay Period but for the limitations set forth in the last sentence
of Section 3(d) and (II) for all other purposes, three hundredths (.03).
d. PIGGY-BACK REGISTRATIONS. If at any time prior to the
expiration of the Registration Period (as hereinafter defined) the Company shall
file with the SEC a Registration Statement under the Securities Act relating to
either (i) an underwritten public offering or (ii) any offering if a
Registration Statement covering all Registrable Securities is not then
effective, in the case of both (i) and (ii) for its own account or the account
of others 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
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in connection with stock option or other employee benefit plans) and the Company
is not prohibited from including such Registrable Securities on such
Registration Statement and the Registration Statement has not become effective,
the Company shall send to each Investor who is entitled to registration rights
under this Section 2(d) written notice of such determination and, if within ten
(10) 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,
except that if, in connection with any underwritten public offering for the
account of the Company 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. Any exclusion of Registrable Securities shall be made
pro rata among the Investors seeking to include Registrable Securities, in
proportion to the number of Registrable Securities sought to be included by such
Investors; provided, however, that the Company shall not exclude any Registrable
Securities unless the Company has first excluded all outstanding securities, the
holders of which are not entitled to inclusion of such securities in such
Registration Statement or are not entitled to pro rata inclusion with the
Registrable Securities; and provided, further, however, that, after giving
effect to the immediately preceding proviso, any exclusion of Registrable
Securities shall be made pro rata with holders of other securities having the
right to include such securities in the Registration Statement other than
holders of securities entitled to inclusion of their securities in such
Registration Statement by reason of demand registration rights except to the
extent any existing agreements otherwise provide. No right to registration of
Registrable Securities under this Section 2(d) 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(d) 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.
e. 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 sale by the Initial Investors and any other Investor of the Registrable
Securities and the Company shall, if necessary to keep effective a Registration
Statement covering any of the Registrable Securities, use all commercially
reasonable efforts to file all reports required to be filed by the Company with
the SEC in a timely manner so as to maintain the effectiveness of such
Registration Statement.
f. RULE 416. The Company and the Investors 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 (i) to prevent dilution resulting from stock splits, stock dividends or
similar transactions and (ii) if permitted by law, by reason of reductions in
the Conversion Price of
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the Preferred Stock in accordance with the terms thereof, including, but not
limited to, the terms which cause the Variable Conversion Price to decrease as
the bid price of the Common Stock decreases (collectively, the "RULE 416
SECURITIES"). In this regard, the Company agrees to use all commercially
reasonable efforts to ensure that the maximum number of Registrable Securities
which may be registered pursuant to Rule 416 under the Securities Act are
covered by the Registration Statement and, absent guidance from the SEC or other
definitive authority to the contrary, the Company shall use all commercially
reasonable efforts to affirmatively support and to not take any action adverse
to the position that the Registration Statements filed hereunder covers all of
the Rule 416 Securities. If the Company determines that the Registration
Statement filed hereunder does 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.
3. DELAY PERIODS; SUSPENSION OF SALES.
a. If, at any time prior to the expiration of the Registration
Period (as defined below), if in the good faith reasonable judgment of the
Company's Board of Directors, the disposition of Registrable Securities would
require the premature disclosure of material nonpublic 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 thereof 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) ten (10)
business days after the Company provides a notice to the Investors under Section
4(f) hereof that the failure to disclose such nonpublic 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.
b. If, at any time prior to the expiration of the Registration
Period and after the Effectiveness Date of the Registration Statement required
to be filed pursuant to Section 2(a) hereof is declared effective by the SEC
(the "Effectiveness Date"), the Company undertakes an underwritten public
offering of any class of its securities, then the Company shall not be required
to maintain the effectiveness of or amend or supplement the Registration
Statement for a period (an "OFFERING DELAY PERIOD") commencing no later than the
closing of such public offering and expiring no later than the thirtieth (30th)
day following such commencement.
c. If, at any time prior to the expiration of the Registration
Period, an order is entered by a court of competent jurisdiction prohibiting the
Company from taking action to have the Registration Statement covering the
Registrable Securities declared effective by the SEC or requiring the Company to
take action to render such Registration Statement ineffective for purposes of
sales of the Registrable Securities as contemplated herein (a "COURT ORDER"),
then the Company shall not be required to request or maintain, as the case may
be, such effectiveness for a period (a "COURT ORDER DELAY PERIOD" and,
collectively with the Disclosure Delay Period and the Offering Delay Period, a
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"DELAY PERIOD") expiring no later than the earlier of (i) the third business day
following the date such Court Order is no longer in effect and (ii) the one
hundred eightieth (180th) day following the Closing Date.
If the Company is prevented from taking action to have the
Registration Statement covering the Registrable Securities declared effective as
a result of a Court Order in effect at any time after the one hundred eightieth
(180th) day following the Closing Date, the Investors shall have the option to
require the Company to purchase for cash any or all of their outstanding shares
of Series B Preferred Stock held by such Investor for an amount per share equal
to (i) one hundred ten percent (110%) of the Face Amount (as defined in the
Certificate of Designation) thereof plus (ii) the accrued premium thereon
through the date of such purchase.
d. The Company will give prompt written notice, in the manner
prescribed by Section 12 hereof, to the Initial Investors of each Delay Period.
Advance notice of the Delay Period shall be given to the extent practicable. If
practicable, such notice shall estimate the duration of such Delay Period. Each
Initial Investor, by its acceptance of any share of Common Stock, agrees that,
upon receipt of such notice, it will forthwith discontinue disposition of the
Common Stock pursuant to the Registration Statement, and will not deliver any
prospectus forming a part thereof in connection with any sale of Common Stock
until the expiration of such Delay Period. In addition, the provisions of
Section 2(c) shall not apply to the Delay Periods. Notwithstanding anything in
this Section 3 to the contrary, (i) there shall not be more than an aggregate of
forty-five (45) calendar days in any twelve (12) month period during which the
Company is in a Disclosure Delay Period or more than one (1) Offering Delay
Period in any twelve (12) month period, (ii) no individual Disclosure Delay
Period shall last more than ten (10) business days and (iii) the Company may not
initiate more than one (1) Disclosure Delay Period with respect to any event
causing the occurrence of a Disclosure Delay Period. For the avoidance of doubt,
the occurrence, discontinuance and reoccurrence of any circumstance shall
constitute two (2) different events for purposes of clause (iii) above.
4. OBLIGATIONS OF THE COMPANY.
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:
a. The Company shall use all commercially reasonable efforts
to prepare promptly and file with the SEC the Registration Statement required by
Section 2(a), and to cause such Registration Statement relating to Registrable
Securities to become effective as soon as practicable after such filing, but in
no event later than the Registration Deadline, and keep the Registration
Statement effective pursuant to Rule 415 at all times (other than during Delay
Periods permitted by Section 3 hereof) 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 pursuant to Rule 144 under the Securities Act without any
limitation on the
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number of Registrable Securities that can then be immediately resold (the
"REGISTRATION PERIOD"), which Registration Statement (including any amendments
or supplements thereto and prospectuses contained therein and all documents
incorporated by reference therein) shall not 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, except for those
provided by the Investors. The Company agrees and acknowledges that the
Registration Period shall be reinstituted after its expiration if at any time
all of the Registrable Securities may not be sold to the public without
registration pursuant to Rule 144 under the Securities Act (without any volume
limitations).
b. The Company shall 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 (other than during Delay
Periods permitted by Section 3 hereof). In the event (i) the Company delivers a
Rule 416 Notice to the Investors or the Investors who hold a majority in
interest of the Registrable Securities shall reasonably determine or the SEC
shall state formally or informally that Rule 416 under the Securities Act does
not permit a registration statement to cover securities which may become
issuable upon conversion or exercise of convertible or exercisable securities by
reason of reductions in the conversion or exercise price of such securities and
(ii) 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 thirty-five percent (135%) of the Registrable
Securities issued or issuable upon conversion and exercise (without giving
effect to any limitations on conversion or exercise contained in Article IV.C of
the Certificate of Designation or Section 7(g) of the Warrants) of the Preferred
Stock and the Warrants, the Company shall use all commercially reasonable
efforts to amend the Registration Statement, or file a new Registration
Statement (on the short form available therefor, if applicable), or both, so as
to cover two hundred percent (200%) of the Registrable Securities so issued or
issuable (without giving effect to any limitations on conversion or exercise
contained in Article IV.C of the Certificate of Designation or Section 7(g) of
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 use all commercially reasonable efforts to cause such amendment
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 sixty (60) days after a
Registration Trigger Date (excluding Delay Periods), 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 (a "REDEMPTION
NOTICE"), to require the Company to purchase for cash, at an amount per share
equal to the Redemption Amount (as defined in Article VIII.B of the Certificate
of Designation), a portion of the Investor's Preferred Stock such that the total
number of Registrable Securities included on the Registration Statement for
resale by such Investor exceeds 100% of the Registrable Securities issued or
issuable upon conversion and exercise (without giving effect to any limitations
on conversion or exercise contained in Article IV.C of the Certificate of
Designation or
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Section 7(g) of the Warrants) of such Investor's Preferred Stock and Warrants.
If the Corporation fails to redeem any of such shares within five (5) business
days after its receipt of a Redemption Notice and the Registration Statement is
not effective, then such Investor shall be entitled to the remedies provided in
Article VIII.C of the Certificate of Designation.
c. The Company shall furnish to each Investor whose
Registrable Securities are included in the Registration Statement and its legal
counsel (i) 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, and, in the case of the Registration Statement
referred to in Section 2(a), 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 any Registration Statement or amendment
thereto), and each item of correspondence from the SEC or the staff of the SEC,
in each case relating to such Registration Statement (other than any portion, if
any, thereof which contains information for which the Company has sought
confidential treatment), (ii) on 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 (iii) 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 all commercially reasonable 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 bylaws, 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. In the event the Investors who hold a majority in interest
of the Registrable Securities being offered in an offering select underwriters
for the offering, the Company shall enter into an underwriting agreement, in
usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the underwriters of such
offering and the Investors.
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f. As promptly as practicable after becoming aware of such
event, the Company shall notify each Investor of the happening of any event, of
which the Company has knowledge, 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 use all
commercially reasonable efforts promptly to 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.
g. The Company shall use all commercially reasonable efforts
to prevent the issuance of any stop order or other suspension of effectiveness
of a Registration Statement, 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 to notify
each Investor who holds Registrable Securities being sold (or, in the event of
an underwritten offering, the managing underwriters) 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).
h. The Company shall permit a single firm of counsel
designated by a majority of the Initial Investors to review the Registration
Statement and all amendments and supplements thereto a reasonable period of time
prior to their filing with the SEC, and not file any such Registration Statement
or amendment or supplement thereto in a form to which such counsel reasonably
objects in accordance with Section 2(a) hereof.
i. If necessary to obtain the benefits of Section 11(a) of the
Securities Act, 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.
j. At the request of any Investor, the Company shall furnish,
on the date of effectiveness of the Registration Statement, in the case of an
underwriting (i) an opinion, dated as of such date, from counsel representing
the Company addressed to the Investors and in form, scope and substances as is
customarily given in an underwritten public offering and (ii) a letter, dated
such date, from the Company's independent certified public accountants in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and the Investors, if permitted by applicable accounting
practices.
k. The Company shall make available for inspection by (i) any
Investor, (ii) any underwriter participating in any disposition pursuant to the
Registration Statement, (iii) one firm of attorneys and one firm of accountants
or other agents retained by the Investors, and (iv) one firm of
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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 each 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. The Company shall not be required
to disclose any confidential information in such Records to any Inspector until
and unless such Inspector shall have entered into confidentiality agreements (in
form and substance satisfactory to the Company) with the Company with respect
thereto, substantially in the form of this Section 4(k). Each Investor agrees
that it shall, upon learning that disclosure of such Records is sought in or by
a court or governmental body of competent jurisdiction or through other means,
give prompt notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, the Records deemed confidential. Nothing herein shall be deemed to
limit the Investors' ability to sell Registrable Securities in a manner which is
otherwise consistent with applicable laws and regulations, provided that it does
not disclose any confidential information in connection therewith.
l. 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.
m. The Company shall use all commercially reasonable efforts
at its option to promptly either (i) cause all the Registrable Securities
covered by the Registration Statement to be listed on the AMEX or another
national securities exchange and on each additional national securities exchange
on which securities of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable Securities is then permitted
under the rules of such
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exchange, or (ii) secure the designation and quotation, of all the Registrable
Securities covered by the Registration Statement on the Nasdaq and, without
limiting the generality of the foregoing, to arrange for or maintain at least
two market makers to register with the National Association of Securities
Dealers, Inc. ("NASD") as such with respect to such Registrable Securities.
n. 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.
o. 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) representing Registrable
Securities to be offered pursuant to the Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
managing underwriter or underwriters, if any, or the Investors may reasonably
request and registered in such names as the managing underwriter or
underwriters, if any, or the Investors may request, and, within three (3)
business days after a Registration Statement which includes Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall
cause legal counsel selected by the Company to deliver, to the transfer agent
for the Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement) an opinion of such
counsel in the form attached hereto as EXHIBIT 1.
p. 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 the Registration Statement as may be necessary in order to change the plan
of distribution set forth in such Registration Statement.
q. 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.)
r. The Company shall take all such other actions as any
Investor or the underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities.
s. 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 in any Registration Statement filed
under Section 2(a) hereof or any amendment or supplement thereto under Section
4(b) hereof without the consent of the holders of a majority of the Registrable
Securities, subject to the following exceptions: (i) the Company shall be
permitted to allow a holder or holders of shares of Common Stock to include
shares of Common Stock on such Registration Statement if a court of competent
jurisdiction has entered a final non-appealable order requiring that
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such securities owned by such holder or holders be included on the Registration
Statement; and (ii) the Company or other holders of the Company's Securities
shall be permitted to include up to 40,000 shares of Common Stock on the
Registration Statement.
t. Until the first day which is not included in a Delay Period
and which occurs after the one hundred and eightieth (180th) day following the
date the Registration Statement required to be filed pursuant to Section 2(a)
hereof is declared effective by the SEC (as extended by the number of days
included in any Delay Periods occurring during such time period), the Company
shall not permit the SEC to declare effective any registration statement
covering any of the Company's Common Stock which is either (x) issued in a
private transaction or issued or issuable upon conversion, exercise or exchange
of any security issued in a private transaction or (y) issued or issuable
pursuant to a Commitment Offering; provided, however, that this obligation of
the Company shall not apply to a registration statement covering Common Stock
(i) to be issued in a firm commitment underwritten public offering undertaken by
the Company, (ii) issued or to be issued pursuant to any Company stock option,
restricted stock or similar plan for the benefit of the Company's or any of its
subsidiaries employees, directors or consultants; (iii) issued or to be issued
as consideration in a merger, consolidation or acquisition of assets or stock,
or in connection with any strategic partnership or joint venture (the primary
purpose of which is not to raise equity capital), or as consideration for the
acquisition of a business, product or license by the Company or (iv) issuable
upon exercise of warrants issued in connection with the issuance of debt
securities if the maximum number of shares of Common Stock issuable pursuant to
such warrants does not exceed the product of .05 multiplied by the aggregate
purchase price of all securities issued in such transaction at the closing
thereof, multiplied by the greater of (x) the exercise price of such warrants or
(y) the Market Price (as defined in the Warrants) on the date of issuance of
such debt securities. As used herein, a "Commitment Offering" means an offering
of securities of the Company whereby the Company has the right (at its option)
to require an investor(s), subject to certain conditions which may be contained
in the documentation evidencing such Commitment Offering, to purchase securities
registered under the Securities Act from time to time on a date(s) designated by
the Company (e.g., an equity line of credit).
5. 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 (5)
business days prior to the first anticipated filing date of
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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
Preferred Stock or any 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 the Registration
Statement.
c. In the event Investors holding a majority in interest of
the Registrable Securities being offered determine to engage the services of an
underwriter, each Investor agrees to enter into and perform such Investor's
obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the underwriter(s) of such offering and the Company and take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of the Registrable Securities, unless such Investor has notified
the Company in writing of such Investor's election not to participate in such
underwritten distribution.
d. Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 4(f)
or 4(g), 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 4(f) or 4(g) 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.
e. No Investor may participate in any underwritten
distribution hereunder unless such Investor (i) agrees to sell such Investor's
Registrable Securities on the basis provided in any underwriting arrangements in
usual and customary form entered into by the Company and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
6. EXPENSES OF REGISTRATION.
All reasonable expenses, other than underwriting discounts and
commissions, of the Company incurred in connection with registrations, filings
or qualifications pursuant to Sections 2 and 4, 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 contemplated by Section 4(j) hereof shall be borne by the Company.
In addition, if successful in its actions to enforce its rights hereunder, (i)
an Investor shall be entitled to reimbursement from the Company for all of such
Investor's costs and expenses (including legal fees) incurred in connection with
the enforcement of its rights hereunder and (ii) the Company shall be
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entitled to reimbursement from each Investor of all of the Company's costs and
expenses (including legal fees) incurred in connection with the enforcement of
its rights hereunder with respect to such Investor.
7. 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,
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 person required to provide
indemnification hereunder (i.e., the Company for purposes of this Section 7(a)
and the Investor for the purpose of Section 7(b)) 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 7(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 7(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; (iii) shall not apply to any Claim arising out of or
based upon a sale by an Investor during a Delay Period permitted by Section 3
hereof; (iv) with respect to any preliminary prospectus, shall not inure to the
benefit of any
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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 4(c) hereof, and the
Indemnified Person was 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 10.
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 7(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 or
underwriter 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 other than a Violation defined in clause
(iii) of the definition of "Violations" 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 7(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 7(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 7(b) and Section 8) 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 10. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 7(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, and the Indemnified Party failed to utilize such
corrected prospectus.
c. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 7 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
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any indemnifying party under this Section 7, 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 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 for the Indemnified Person shall
be selected by Investors holding a majority-in-interest of the Registrable
Securities included in the Registration Statement to which the Claim relates
(with the approval of a majority of the Initial Investors if they hold
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 7,
except to the extent that the indemnifying party is actually prejudiced in its
ability to defend such action. The indemnification required by this Section 7
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.
8. 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 7 to the fullest extent permitted by law; provided, however, that
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the express terms set forth in
Section 7, (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 or the Company who was
not guilty of such fraudulent misrepresentation, and (iii) contribution
(together with any indemnification 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.
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9. 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 Registrable
Securities of the Company to the public without registration ("RULE 144"), the
Company agrees to use (until such time as all Registrable Securities may be sold
by the Investors pursuant to Rule 144(k)) all commercially reasonable efforts
to:
a. file with the SEC in a timely manner and make and keep
available all reports and other documents required of the Company under 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
b. 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 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 pursuant to Rule 144
without registration.
10. 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.
11. 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 and
Investors who hold a majority interest of the Registrable Securities or, in the
case of a waiver, with the consent of the party charged with the enforcement of
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any such provision. Any amendment or waiver effected in accordance with this
Section 11 shall be binding upon each Investor and the Company.
12. 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 a majority, if any, of the
registered owners of such Registrable Securities.
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 delivered personally or by courier or by confirmed
telecopy, and shall be effective five (5) days after being placed in the mail,
if mailed, 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:
Selfcare, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attn: Chief Executive Officer
with a copy to:
Xxxxxxx, Xxxxxxx & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telecopy: 000-000-0000
Attn: Xxxxxxx X. Xxxx, P.C.
and
Xxxxxx Xxxxxxxxxx, III, P.C.
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 12(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.
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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. The Company and each Investor
irrevocably consent to the jurisdiction of the state and federal 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. The Company and each Investor
irrevocably waive the defense of an inconvenient forum to the maintenance of
such suit or proceeding. The Company and each Investor further agree that
service of process upon the Company and any such Investor, mailed by first class
mail shall be deemed in every respect effective service of process upon the
Company and each Investor in any such suit or proceeding. Nothing herein shall
affect the Company's or any Investor's right to serve process in any other
manner permitted by law. The Company and each Investor agree 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, the Securities Purchase Agreement and the
Warrants (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, the
Securities Purchase Agreement and the Warrants 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 10 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 and other determinations to be made by the
Investors or the Initial Investors pursuant to this Agreement shall be made by
the Investors or the Initial Investors holding a majority of the Registrable
Securities (determined as if all shares of Preferred Stock and
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Warrants then outstanding had been converted into or exercised for Registrable
Securities) then held by all Investors or Initial Investors, as the case may be.
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 then outstanding or then issuable
upon exercise of the Warrants were converted into or exercised for Registrable
Securities.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
SELFCARE, INC.
By:
-------------------------------
Name:
-----------------------------
Its:
------------------------------
INITIAL INVESTORS:
PROPRIETARY CONVERTIBLE INVESTMENT GROUP, INC.
By:
-------------------------------
Name:
-----------------------------
Its:
------------------------------
CAPITAL VENTURES INTERNATIONAL
By: Heights Capital Management, its authorized agent
By:
-------------------------------
Name:
-----------------------------
Its:
------------------------------
C.C. INVESTMENTS, LDC.
By:
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Name:
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Its:
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