REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”)
is
made and entered into as of August ___, 2007, by and between bioMETRX, Inc.,
a
Delaware corporation (the “Company”), and Xxxx Xxxxx.
WHEREAS,
the Purchaser has made loans to the Company from time to time; and
WHEREAS,
the Purchaser has agreed to lend the Company an additional $87,500 thereby
bringing the total amount due by the Company to the Purchaser to $400,000;
and
WHEREAS,
the Company concurrently herewith has issued the Purchaser a new Convertible
Note (“Note”) in the aggregate principal amount of $400,000 which supercedes and
replaces all outstanding Promissory Notes issued to Purchaser; and
WHEREAS,
as condition for the Purchaser providing the Company with the additional $87,500
the Company has agreed to register under certain circumstance the shares
underlying the Convertible Note and any all shares underlying Warrants currently
owned by the Purchaser or are being issued concurrently herewith.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and the Purchaser agree as
follows:
1. Piggy
Back Rights.
At the
time the Company shall determine to prepare and file with the Securities and
Exchange Commission (the “Commission”) a registration statement relating to an
offering for its own account or the account of others under the Securities
Act
of 1933, as amended, and the rules and regulations promulgated thereunder (the
“Securities Act”), of any of its equity securities, other than (a) on Form S-4
or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection
with
any acquisition of any entity or business, (b) a registration relating solely
to
a Commission Rule 145 transaction, (c) equity securities issuable in connection
with stock option or other employee benefit plans, but in no event later than
April 15, 2008, then the Company shall send to the Holder written notice of
such
registration statement and the Company shall include in such registration
statement all of the shares of capital stock issuable upon conversion in full
of
the Note, and all shares issuable upon the exercise of warrants currently held
by the Purchaser, as well as any shares escrowed in connection with the
underlying transaction (the “Registerable Securities”) the Holder requests to be
registered, subject, in the event of an underwritten offering, to customary
cutbacks requested by the managing underwriter of all selling stockholders
thereunder, on a pro-rata basis with any other selling stockholders. This
registration rights agreement is subject to the company’s limitations under SEC
Rule 415.
2. Right
to Terminate Registration.
Subject
to the obligation in paragraph (1) herein, the Company shall have the right
to
terminate or withdraw any registration initiated by it under Section 1 prior
to
the effectiveness of such registration whether or not the Purchaser has elected
to include Registrable Securities in such registration. The Purchaser agrees
that, upon receipt of notice from the Company that the Company has determined
to
withdraw any registration statement pursuant to this subsection, such Purchaser
will discontinue its disposition of securities pursuant to such registration
statement and, if so directed by the Company, will deliver to the Company (at
the Company’s expense) all copies, other than permanent file copies, then in
such Purchaser’s possession of the prospectus covering securities which was in
effect at the time of such notice.
3. Expenses
of Registration.
All
expenses, other than Selling Expenses (as defined below), incurred by the
Company in complying with this Agreement, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and expenses
and the expense of any special audits incident to or required by any such
registration (“Registration Expenses”) incurred in connection with all
registrations pursuant to this Agreement shall be borne by the Company;
provided, however, that in the event the Purchaser alone, but not the Company,
initiates the request that a registration be withdrawn prior to its
effectiveness, all Registration Expenses incurred in connection with that
registration shall be borne by the Purchaser. All underwriting discounts,
selling commissions and stock transfer taxes applicable to the securities
registered by the Purchaser and, except as set forth above, all fees and
disbursements of counsel for the Purchaser (“Selling Expenses”) relating to
securities registered on behalf of the Purchaser shall be borne by the
Purchaser.
4. Registration
Procedures.
In the
case of each registration, qualification or compliance to be effected by the
Company pursuant to this Agreement, the Company will keep the Purchaser advised
in writing as to the initiation of each registration, qualification and
compliance and as to the completion thereof. The Company will:
(a) use
its
reasonable best efforts to effect the registration and the sale of the
Registrable Securities in accordance with the intended method of disposition
thereof and pursuant thereto the Company will as expeditiously as
possible;
(b) prepare
and file with the Commission a registration statement with respect to such
Registrable Securities and use its reasonable best efforts to cause such
registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company will furnish to the counsel selected by the Purchaser copies of
all
such documents proposed to be filed);
(c) prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be
necessary to keep such registration statement effective for a period of not
less
than 120 days and comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of disposition by
the
Purchaser set forth in such registration statement;
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(d) during
the period in which the Company is required under the provisions hereof to
keep
a registration statement effective, furnish to the Purchaser such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as Purchaser may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by Purchaser;
(e) use
its
reasonable best efforts to register or qualify such Registrable Securities
under
such other securities or blue sky laws of such jurisdictions as Purchaser
reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable Purchaser to consummate the
disposition in such jurisdictions of the Registrable Securities owned by
Purchaser (provided that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph, (ii) subject itself to taxation
in any such jurisdiction where it would not otherwise be subject to taxation
but
for this subparagraph or (iii) consent to general service of process in any
such
jurisdiction where it would not otherwise be subject to service of process
but
for this subparagraph);
(f) notify
the Purchaser any time the Company becomes aware a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and the Company shall
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
will
not contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading;
(g) use
its
reasonable best efforts to cause all such Registrable Securities to be listed
on
each securities exchange on which similar securities issued by the Company
are
then listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, use its reasonable
best efforts to secure designation of all such Registrable Securities covered
by
such registration statement as a NASDAQ “national market system security” within
the meaning of Rule 11Aa2-1 of the Commission or, failing that, use its best
efforts to secure NASDAQ authorization for such Registrable
Securities;
(h) provide
a
transfer agent and registrar for all such Registrable Securities not later
than
the effective date of such registration statement;
(i) enter
into such customary agreements (including underwriting agreements in customary
form, provided that such underwriting agreement shall be reasonably satisfactory
to the Company) and take all such other actions as the holders of a majority
of
the Registrable Securities being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities (including, without limitation, (i) effecting a stock split or a
combination of shares, and (ii) not effecting any public sale or distribution
of
its equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven days prior to and during
the
180-day period beginning on the effective date of any underwritten registration
(except as part of such underwritten registration or pursuant to registrations
on Form S-8 or any successor form), unless the underwriters managing the
registered public offering otherwise agree;
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(j) upon
receipt and execution of such confidentiality agreements as the Company may
reasonably request from parties who are not otherwise subject to confidentiality
obligations because of the nature of their profession (e.g., underwriters,
attorneys and accountants), make available for inspection by the Purchaser,
any
underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by Purchaser
or
such underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company’s officers, directors,
employees and independent accountants to supply all information reasonably
requested by Purchaser or any such underwriter, attorney, accountant or agent
in
connection with such registration statement;
(k) otherwise
use its reasonable best efforts to comply with all applicable rules and
regulations of the Commission; and
(l) in
the
event of the issuance of any stop order suspending the effectiveness of a
registration statement, or of any order suspending or preventing the use of
any
related prospectus or suspending the qualification of any common stock included
in such registration statement for sale in any jurisdiction, the Company will
use its reasonable best efforts promptly to obtain the withdrawal of such
order.
5. Indemnification.
(a) The
Company agrees to indemnify, to the extent permitted by law, each holder of
Registrable Securities, its officers and directors and each person who controls
such holder (within the meaning of the Securities Act) against all losses,
claims, damages, liabilities and expenses caused by any violation or alleged
violation by the Company of the Securities Act, the Securities Exchange Act
of
1934, as amended (the “Exchange Act”), any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law, any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary prospectus
or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are caused by
or
contained in any affidavits or written information supplied or withheld from
the
Company relating to such holder’s ownership of Registrable Securities or as
otherwise required under the Securities Act furnished by such holder expressly
for use in such registration statement or by such holder’s failure to deliver a
copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has timely furnished such holder with
the
number of copies of the same reasonably requested by such holder.
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(b) In
connection with any registration statement in which Purchaser is participating,
Purchaser will furnish to the Company in writing such information and affidavits
relating to such Purchaser’s ownership of Registrable Securities or as otherwise
required under the Securities Act as the Company reasonably requests for use
in
connection with any such registration statement or prospectus and, to the extent
permitted by law, will indemnify the Company, its directors and officers and
each person who controls the Company (within the meaning of the Securities
Act)
against any losses, claims, damages, liabilities and expenses resulting from
any
untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission
is
contained in any information or affidavit so furnished in writing by such holder
which was expressly provided for use in such registration statement and was
included in such registration statement in reliance on and in conformity with
such written information or affidavit.
(c) Any
person entitled to indemnification hereunder will (i) give prompt written notice
to the indemnifying party of any claim with respect to which it seeks
indemnification and (ii) unless in such indemnified party’s reasonable judgment
a conflict of interest between such indemnified and indemnifying parties may
exist with respect to such claim, permit such indemnifying party to assume
the
defense of such claim with counsel reasonably satisfactory to the indemnified
party. If such defense is assumed or not defended because of a conflict of
interest pursuant to clause (ii) of the preceding sentence, the indemnifying
party will not be subject to any liability for any settlement made by the
indemnified party without its consent (but such consent will not be unreasonably
withheld). An indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay the fees and expenses
of more than one counsel for all parties indemnified by such indemnifying party
with respect to such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim.
(d) The
indemnification provided for under this Agreement will remain in full force
and
effect regardless of any investigation made by or on behalf of the indemnified
party or any officer, director or controlling person of such indemnified party
and will survive the transfer of securities.
(e) The
Company also agrees to make such provisions, as are requested by any indemnified
party, for contribution to such party in the event the Company’s indemnification
is unavailable for any reason. The Company shall contribute to the amount paid
or payable by such indemnified party as a result of such loss, liability, claim,
damage, or expense in such proportion as is appropriate to reflect the relative
fault of the indemnified party on the one hand and of the Company on the other
in connection with the violations, statements or omissions that resulted in
such
loss, liability, claim, damage or expense as well as any other relevant
equitable considerations. The relative fault of the indemnified party and of
the
Company shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state
a
material fact relates to information supplied by the indemnified party or by
the
Company and the parties’ relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
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6. Termination
of Registration Rights.
The
Company’s obligations pursuant to Section 1 shall expire upon the earlier to
occur of the following: (a) when all Registrable Securities held by the
Purchaser have been sold or transferred in any manner to any person or entity,
including, but not limited to, sales pursuant to a registration statement,
Rule
144 sales or otherwise, (b) at such time as all Registrable Shares of the
Purchaser can be sold in any three-month period under the Commission’s Rule 144,
or (c) five (5) years after an Initial Public Offering.
7. Stand-Off
Agreement.
So long
as the Company’s obligations pursuant to Section 1 have not expired, the
Purchaser, if requested by the Company and an underwriter of Common Stock or
other securities of the Company, shall agree not to sell or otherwise transfer
or dispose of any Registrable Securities or other securities of the Company
(except for those securities being registered) held by such Purchaser for a
specified period of time (not to exceed 180 days) following the effective date
of a registration statement filed in connection with the Initial Public
Offering; provided, (a) all employees, officers, directors, and greater than
one
percent (1%) preferred stock or Common Stock holders enter into agreements
in
exactly the same form, and (b) that such agreement shall be in a form reasonably
satisfactory to the Company and such underwriter. The Company may impose
stop-transfer instructions with respect to the Registrable Securities or other
securities subject to the foregoing restriction until the end of the stand-off
period.
8. Miscellaneous.
(a) Governing
Law.
This
Agreement shall be governed in all respects by the internal laws of the State
of
New York.
(b) Successors
and Assigns.
The
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, permitted assigns, heirs, executors and administrators of the
parties hereto.
(c) Entire
Agreement; Amendment.
This
Agreement, its attachments and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof. Except as expressly provided
herein, neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the
Company and the Purchaser.
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(d) Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
enforceable against the parties actually executing such counterparts, and all
of
which together shall constitute one instrument.
(e) Severability.
In the
event that any provision of this Agreement becomes or is declared by a court
of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision; provided that
no
such severability shall be effective if it materially changes the economic
benefit of this Agreement to any party.
(f) Notices.
Except
in cases where oral or other notice is permitted by this Agreement, all notices,
requests, demands and other communications hereunder shall be in writing and
shall be deemed to have been given (i) when hand delivered, including delivery
by messenger or courier service (or if delivery is refused, at the time of
refusal), to the address set forth below, (ii) when received or refused as
evidenced by the postal receipt if sent by United States mail as Certified
Mail,
Return Receipt Requested, with proper postage prepaid, addressed as set forth
below or (iii) when received as evidenced by the transmission report of the
telefax machine of the transmitting party acknowledging a good transmission
if
sent by telefax to the number set forth below:
a.
If
to
Purchaser:
XXXX
XXXXX
c/o
XXXXXX
XXXX XXXXX RAYSMAN & XXXXXXX, LLP
Attn:
Xxxx Xxxxxxx
000
XXXXX
XXXXXX
XXX
XXXX,
XXX XXXX 00000
b.
If
to the
Company:
bioMETRX,
INC.
000
Xxxxx
Xxxxxxxx
Xxxxx
000
Xxxxxxx,
XX 00000
Any
of
the parties may change its mailing address or telecopy number, by giving notice
to the other party pursuant to this Subsection.
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(g) Titles
and Subtitles.
The
titles and subtitles used in this Agreement are used for convenience only and
are not considered in construing or interpreting this Agreement.
IN
WITNESS WHEREOF, the parties below have executed this Agreement all as of the
date first written above.
PURCHASER:
________________________________
By:
Name:
Title:
COMPANY:
bioMETRX,
INC.
By:
Name:
Xxxx Xxxxxx
Title:
Chief Executive Officer
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