Exhibit 4.2
EXECUTION COPY
SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
This Second Amended and Restated Investors' Rights Agreement (this
"AGREEMENT") is made as of October 26, 2004 by and among Electro-Optical
Sciences, Inc., a Delaware corporation (the "COMPANY") and the investors (the
"EXISTING INVESTORS") which are parties to the Company's Amended and Restated
Investors' Rights Agreement dated as of June 20, 2003 as such agreement was
amended by that certain Amendment to the Amended and Restated Investors' Rights
Agreement dated as of March 21, 2004 (the "PRIOR RIGHTS AGREEMENT"), the New
Investors (as defined below) and the Former HP I Equity Holders (as defined
below). Capitalized terms used herein, but not otherwise defined shall have the
meanings ascribed to such terms in Section 4 hereof.
RECITALS
WHEREAS, the Existing Investors hold shares of the Company's Series B
Preferred Stock, par value $0.01 per share (the "SERIES B PREFERRED STOCK"), the
Company's Series C Preferred Stock, par value $0.01 per share (the "SERIES C
PREFERRED STOCK"), the Company's Common Stock, par value $0.001 per share (the
"COMMON STOCK"), and/or warrants to purchase Common Stock and/or Series C
Preferred Stock (the "WARRANTS" and the shares of Common Stock issuable upon
exercise thereof the "WARRANT COMMON SHARES" and the shares of Series C
Preferred Stock issuable upon exercise thereof the "WARRANT SERIES C SHARES");
WHEREAS, the Existing Investors possess certain rights pursuant to the
Prior Rights Agreement;
WHEREAS, as of the date hereof the Company is selling shares of Series C
Preferred Stock and Warrants (the "OCTOBER 2004 SERIES C FINANCING") to certain
purchasers as identified on Exhibit A attached hereto under the heading "New
Investors" (the "NEW INVESTORS") and it is a condition precedent to the
consummation of the October 2004 Series C Financing that the New Investors
become parties to this Agreement;
WHEREAS, Health Partners I, LLC ("HP I"), a current holder of Series C
Preferred Stock and Warrants, may be dissolved after consummation of the October
2004 Series C Financing and upon such dissolution the shares of Series C
Preferred Stock and the Warrants held by HP I will be transferred to the former
equity holders of HP I as identified on Exhibit A attached hereto under the
heading "Former HP I Equity Holders" (the "FORMER HP I EQUITY HOLDERS"); and
WHEREAS, the Company and the Existing Investors desire to have the Former
HP I Equity Holders become parties to this Agreement effective upon the
dissolution of HP I;
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the Company, the undersigned Existing Investors (constituting
holders of a majority of the Registrable Securities (as defined in the Prior
Rights Agreement)), the undersigned New Investors and the undersigned Former HP
I Equity Holders hereby agree that the Prior Rights
Agreement shall be amended and restated in its entirety by this Agreement, and
the parties hereto further agree as follows:
SECTION 1
RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; REGISTRATION RIGHTS
1.1 RESTRICTIONS ON TRANSFER.
(a) Each Holder agrees not to make any disposition of all or any
portion of the Registrable Securities unless and until the transferee has agreed
in writing for the benefit of the Company to be bound by this Section 1.1,
provided and to the extent such Section 1.1 is then applicable, and:
(i) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or
(ii) Such Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and, if
reasonably requested by the Company, such Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the
Securities Act. The Company will not require opinions of counsel for
transactions made pursuant to Rule 144 except when counsel to the Company
reasonably believes it appropriate.
(iii) Notwithstanding the provisions of paragraphs (i) and
(ii) above, no such registration statement or opinion of counsel shall be
necessary for a transfer by a Holder which is (A) a partnership to its partners
or retired partners in accordance with partnership interests, (B) a corporation
to its stockholders in accordance with their interest in the corporation, (C) a
limited liability company to its members or former members in accordance with
their interest in the limited liability company, or (D) to the Holder's family
member or trust for the benefit of an individual Holder, provided the transferee
will be subject to the terms of this Section 1.1 to the same extent as if such
transferee were an original Holder hereunder.
(b) Each certificate representing Registrable Securities shall
(unless otherwise permitted by the provisions of this Agreement) be stamped or
otherwise imprinted with a legend substantially similar to the following (in
addition to any legend required under applicable state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (AS AMENDED, THE "ACT") AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER OF
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THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP
PERIOD OF UP TO 180 DAYS FOLLOWING THE EFFECTIVE DATE OF A
REGISTRATION STATEMENT OF THE COMPANY FILED UNDER THE ACT, AS SET
FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF
THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL
OFFICE OF THE COMPANY. SUCH LOCK-UP PERIOD IS BINDING ON TRANSFEREES
OF THESE SHARES.
(c) The Company shall be obligated to reissue unlegended
certificates at the request of any holder thereof if the holder shall have (i)
obtained an opinion of counsel at such Holder's expense (which counsel may be
counsel to the Company) reasonably acceptable to the Company to the effect that
the securities proposed to be disposed of may lawfully be so disposed of without
registration, qualification or legend, and (ii) delivered such securities to the
Company or its transfer agent.
(d) Any legend endorsed on an instrument pursuant to applicable
state securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.
1.2 REQUESTED REGISTRATION.
(a) Request for Registration. If the Company shall receive from
Initiating Holders at any time or times not earlier than the earlier of (i) the
fifth anniversary of the date of this Agreement or (ii) one (1) year after the
effective date of the first registration statement filed by the Company covering
an underwritten offering of any of its securities to the general public, a
written request that the Company effect any registration with respect to all or
a part of the Registrable Securities, the aggregate proceeds of which (after
deduction for underwriter's discounts and expenses, related to the issuance)
exceed $2,000,000 the Company will:
(i) promptly give written notice of the proposed registration
to all other Holders; and
(ii) as soon as practicable, use its commercially reasonable
efforts to effect such registration (including, without limitation, filing
post-effective amendments, appropriate qualifications under applicable blue sky
or other state securities laws, and appropriate compliance with the Securities
Act) as would permit or facilitate the sale and distribution of all or such
portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request received
by the Company within twenty (20) days after such written notice from the
Company is mailed or delivered.
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The Company shall not be obligated to effect, or to take any action to
effect, any such registration pursuant to this Section 1.2:
(A) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, qualification, or compliance, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;
(B) After the Company has initiated two such
registrations pursuant to Section 1.2(a), above (counting for these purposes
only registrations which have been declared or ordered effective and pursuant to
which securities have been sold, and registrations which have been withdrawn by
the Holders as to which the Holders have not elected to bear the Registration
Expenses pursuant to Section 1.4 hereof, and would, absent such election, have
been required to bear such expenses);
(C) During the period starting with the date that is
ninety (90) days prior to the Company's good faith estimate of the date of
filing of, and ending on a date that is ninety (90) days after the effective
date of, a Company-initiated registration; provided that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective; or
(D) If the Initiating Holders propose to dispose of
shares of Registrable Securities which may immediately be registered on Form S-3
pursuant to a request made under Section 1.5 hereof.
(b) Deferral of Filing. Subject to the foregoing clauses (A) through
(D), the Company shall file a registration statement covering the Registrable
Securities so requested to be registered as soon as practicable after receipt of
the request or requests of the Initiating Holders; provided, however, that if
(i) in the good faith judgment of the Board of Directors of the Company, such
registration would be detrimental to the Company and the Board of Directors of
the Company concludes, as a result, that it is in the best interests of the
Company to defer the filing of such registration statement at such time, and
(ii) the Company shall furnish to such Initiating Holders a certificate signed
by the President of the Company stating that in the good faith judgment of the
Board of Directors of the Company, it would be detrimental to the Company for
such registration statement to be filed in the near future and that it is,
therefore, in the best interests of the Company to defer the filing of such
registration statement, then the Company shall have the right to defer such
filing for a period of not more than ninety (90) days after receipt of the
request of the Initiating Holders, and, provided further, that the Company shall
not defer its obligation in this manner more than twice in any twelve-month
period.
The registration statement filed pursuant to the request of the Initiating
Holders may, subject to the provisions of Section 1.13 hereof, include other
securities of the Company, with respect to which registration rights have been
granted, and may include securities of the Company being sold for the account of
the Company.
(c) Underwriting. If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the
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Company as a part of their request made pursuant to Section 1.2(a) and the
Company shall include such information in the written notice referred to in
Section 1.2(a)(i). In such event, the right of any Holder to registration
pursuant to Section 1.2 shall be conditioned upon such Holder's participation in
such underwriting, and the inclusion of such Holder's Registrable Securities in
the underwriting (unless otherwise mutually agreed by a majority in interest of
the Initiating Holders and such Holder with respect to such participation and
inclusion) to the extent provided herein. A Holder may elect to include in such
underwriting all or a part of the Registrable Securities he, she or it holds.
All Holders and other persons proposing to distribute their securities through
such underwriting, including the Company, shall enter into an underwriting
agreement in customary form with the representative of the underwriter or
underwriters selected for such underwriting by a majority in interest of the
Initiating Holders, which underwriters are reasonably acceptable to the Company.
Notwithstanding any other provision of this Section 1.2, if the representative
of the underwriters advises the Initiating Holders in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
number of shares to be included in the underwriting or registration shall be
allocated as set forth in Section 1.13 hereof. If a person who has requested
inclusion in such registration as provided above does not agree to the terms of
any such underwriting, such person shall be excluded therefrom by written notice
from the Company, the underwriter or the Initiating Holders. The securities so
excluded shall also be withdrawn from registration. Any Registrable Securities
or other securities excluded or withdrawn from such underwriting shall also be
withdrawn from such registration. If shares are so withdrawn from the
registration and if the number of shares to be included in such registration was
previously reduced as a result of marketing factors pursuant to this Section
1.2(c), then the Company shall offer to all holders who have retained rights to
include securities in the registration the right to include additional
securities in the registration in an aggregate amount equal to the number of
shares so withdrawn, with such shares to be allocated among such Holders
requesting additional inclusion in accordance with Section 1.13.
1.3 COMPANY REGISTRATION.
(a) If the Company should determine to register any of its
securities either for its own account, the account of a security holder or
holders exercising their respective demand registration rights, in either case,
other than in a registration relating solely to employee benefit plans, relating
to the offer and sale of debt securities, relating to a corporate reorganization
or other transaction on Form S-4, made on any registration form that does not
permit secondary sales, or made pursuant to Section 1.2 or 1.5 hereof the
Company will:
(i) promptly give to each Holder written notice thereof; and
(ii) use its commercially reasonable efforts to include in
such registration (and in any related qualification under blue sky laws or other
compliance), except as set forth in Section 1.3(b) below, and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made by any Holder and received by the Company
within fifteen (15) days after the written notice from the Company described in
clause (i) above is mailed or delivered by the Company. Such written request may
specify all or a part of a Holder's Registrable Securities.
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(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 1.3(a)(i). In such event, the right of any Holder to
registration pursuant to this Section 1.3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. The
Company and all Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders of
securities of the Company with registration rights to participate therein
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company.
Notwithstanding any other provision of this Section 1.3, if the
representative of the underwriters advises the Company in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
representative may (subject to the limitations set forth below) exclude all
Registrable Securities from, or limit the number of Registrable Securities to be
included in, the registration and underwriting. The Company shall so advise all
holders of securities requesting registration, and the number of shares of
securities that are entitled to be included in the registration and underwriting
shall be allocated first to the Company for securities being sold for its own
account and thereafter as is set forth in Section 1.13. If any person does not
agree to the terms of any such underwriting, he or she shall be excluded
therefrom by written notice from the Company or the underwriter. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration. To facilitate the allocation of
shares in accordance with the above provisions, the Company or the
underwriter(s) may round the number of shares allocated to any Holder to the
nearest 100 shares.
If shares are so withdrawn from the registration and if the number of
shares of Registrable Securities to be included in such registration was
previously reduced as a result of marketing factors, the Company shall then
offer to all persons who have retained the right to include securities in the
registration the right to include additional securities in the registration in
an aggregate amount equal to the number of shares so withdrawn, with such shares
to be allocated among the persons requesting additional inclusion in accordance
with Section 1.13 hereof.
(c) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 1.3 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration.
1.4 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Sections 1.2, 1.3 and 1.5 hereof, and customary fees of one counsel for the
selling Holders in the case of registrations pursuant to Section 1.2, shall be
borne by the Company; provided, however, that if the Holders bear the
Registration Expenses for any registration proceeding begun pursuant to Section
1.2 and subsequently withdrawn by the Holders registering shares therein, such
registration proceeding shall not be counted as a requested registration
pursuant to Section 1.2 hereof. Furthermore, in the event that a withdrawal by
the Holders is based upon material adverse information relating to
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the Company that is different from the information known or available (upon
request made to the Company or otherwise) to the Holders requesting registration
at the time of their request for registration under Section 1.2, such
registration shall not be treated as a "COUNTED REGISTRATION" for purposes of
Section 1.2 hereof, even though the Holders do not bear the Registration
Expenses for such registration. All Selling Expenses relating to securities so
registered shall be borne by the holders of such securities pro rata on the
basis of the number of shares of securities so registered on their behalf, as
shall any other expenses in connection with the registration required to be
borne by the Holders of such securities.
1.5 REGISTRATION ON FORM S-3.
(a) After its initial public offering, the Company shall use its
commercially reasonable efforts to qualify for registration on Form S-3 or any
comparable or successor form or forms. After the Company has qualified for the
use of Form S-3, in addition to the rights contained in the foregoing provisions
of this Section 1, the Holders of Registrable Securities shall have the right to
request registrations on Form S-3 (such requests shall be in writing and shall
state the number of shares of Registrable Securities to be disposed of and the
intended methods of disposition of such shares by such Holder or Holders),
provided, however, that the Company shall not be obligated to effect any such
registration (i) in the circumstances described in clauses (A) and (C) of
Section 1.2(a), (ii) if the Company shall furnish the certification described in
Section 1.2(b) (but subject to the limitations set forth therein), (iii) if, in
a given twelve-month period, the Company has effected two (2) such registrations
in such period or (iv) if it is to be effected more than five (5) years after
the Company's initial public offering.
(b) If a request complying with the requirements of Section 1.5(a)
hereof is delivered to the Company, the provisions of Sections 1.2(a)(i) and
(ii) and Section 1.2(b) hereof shall apply to such registration. If the
registration is for an underwritten offering, the provisions of Sections 1.2(c)
and 1.2(d) hereof shall apply to such registration.
1.6 REGISTRATION PROCEDURES. In the case of each registration effected by
the Company pursuant to Section 1, the Company will keep each Holder advised in
writing as to the initiation of each registration and as to the completion
thereof. At its expense, the Company will:
(a) prepare and file with the Commission a registration statement
and 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 at least a period of 90 days or until all
of such Registrable Securities have been disposed of (if earlier) and to comply
with the provisions of the Securities Act with respect to the sale or other
disposition of such Registrable Securities;
(b) furnish to the Holders participating in such registration and to
the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as such Holders or underwriters may reasonably request
in order to facilitate the public offering of such securities;
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(c) furnish, at least five business days before filing a
registration statement that registers such Registrable Securities, a prospectus
relating thereto, or any amendments or supplements relating to such a
registration statement or prospectus, to one counsel selected by the holders of
a majority of such Registrable Securities (the "SELLING INVESTORS' COUNSEL"),
with copies of all such other documents as are proposed to be filed (it being
understood that such five business day period need not apply to successive
drafts of the same document proposed to be filed so long as such successive
drafts are supplied to the Selling Investors' Counsel in advance of the proposed
filing by a period of time that is customary and reasonable under the
circumstances);
(d) notify the Selling Investors' Counsel in writing promptly of (i)
the receipt by the Company of any notification by the Commission of comments
with respect to such registration statement or prospectus (or any amendment or
supplement thereto), any request by the Commission for the amendment or
supplementation thereof, or for additional information with respect thereto,
(ii) the receipt by the Company of any notification by the Commission of any
stop order issued suspending the effectiveness of such registration statement or
prospectus (or any amendment or supplement thereto), or the initiation or
threatened initiation of any proceeding for that purpose, and (iii) the receipt
by the Company of any notification with respect to the suspension of the
qualification of such Registrable Securities for sale in any jurisdiction, or
the initiation or threatened initiation of any proceeding for such purposes;
(e) use its commercially reasonable efforts to register or qualify
such Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any Investors holding such Registrable Securities reasonably
requests and do any and all other acts and things which may reasonably be
necessary or advisable to enable such Investors holding such Registrable
Securities to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such Investors; provided, however, that the
Company will not be obligated to register or qualify in any particular
jurisdiction in which the Company would be required to execute a general consent
to service of process in effecting such registration, qualification or
compliance, unless the Company is already subject to service of process in such
jurisdiction, and except as may be required by the Securities Act;
(f) notify each Investor holding such Registrable Securities covered
by such registration statement, at any time when 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, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein, or necessary to
make the statements therein not misleading in the light of the circumstances
then existing;
(g) in the case of an underwritten offering, use its commercially
reasonable efforts to obtain from its independent certified public accountants
"comfort" letters in customary form and covering such matters of the type
customarily covered by comfort letters;
(h) in the case of an underwritten offering, use its commercially
reasonable efforts to obtain from its counsel an opinion or opinions in
customary form;
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(i) provide a transfer agent and registrar (which may be the same
entity and which may be the Company) for such Registrable Securities;
(j) issue to any underwriter to which any seller of Registrable
Securities may sell shares in such offering certificates evidencing such
Registrable Securities; and,
(k) list such Registrable Securities on any national securities
exchange on which any shares of the Common Stock are listed or, if the Common
Stock is not listed on a national securities exchange, use its commercially
reasonable efforts to qualify such Registrable Securities for inclusion on the
automated quotation system of the National Association of Securities Dealers,
Inc. or such national securities exchange as the holders of a majority of such
Registrable Securities shall request.
1.7 INDEMNIFICATION.
(a) The Company will indemnify each Holder, each of its officers,
directors and partners, legal counsel, and accountants and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
with respect to which registration, qualification, or compliance has been
effected pursuant to this Section 1, and each underwriter, if any, and each
person who controls within the meaning of Section 15 of the Securities Act any
underwriter, against all expenses, claims, losses, damages, and liabilities (or
actions, proceedings, or settlements in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular, or other document (including any
related registration statement, notification, or the like) incident to any such
registration, qualification, or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification, or compliance, and will
reimburse each such Holder, each of its officers, directors, partners, legal
counsel, and accountants and each person controlling such Holder, each such
underwriter, and each person who controls any such underwriter, for any legal
and any other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability, or action,
provided that the obligations of the Company hereunder shall not apply to the
extent that any such claim, loss, damage, liability, or expense arises out of or
is based on any untrue statement or omission based upon written information
furnished to the Company by such Holder or underwriter and stated to be
specifically for use therein. It is agreed that the indemnity agreement
contained in this Section 1.7(a) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability, or action if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld).
(b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration, qualification, or
compliance is being effected, indemnify the Company, each of its directors,
officers, partners, legal counsel, and accountants and each underwriter, if any,
of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act, each other such Holder and other stockholder,
and
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each of their officers, directors, and partners, and each person controlling
such Holder or other stockholder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular, or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Holders, other stockholders,
directors, officers, partners, legal counsel, and accountants, persons,
underwriters, or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability, or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular, or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein; provided, however, that the obligations of such
Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof) if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld); and provided that in no event shall any indemnity
under this Section 1.7 exceed the gross proceeds from the offering received by
such Holder.
(c) Each party entitled to indemnification under this Section 1.7
(the "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
be unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 1, to the extent such
failure is not prejudicial. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 1.7 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, 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
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall
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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 Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.
1.8 INFORMATION BY HOLDER. Each Holder of Registrable Securities shall
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification, or compliance referred to in this Section 1. The Company will not
be obligated to register the Registrable Securities of any Holder who fails
promptly to provide the Company with such information as the Company may
reasonably request.
1.9 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the date
of this Agreement, the Company shall not, without the prior written consent of a
majority in interest of the Holders, enter into any agreement with any holder or
prospective holder of any securities of the Company giving such holder or
prospective holder any registration rights the terms of which are more favorable
than the registration rights granted to the Holders hereunder.
1.10 RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission that may permit the sale of the
Restricted Securities to the public without registration, the Company agrees to
use its commercially reasonable efforts to:
(a) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act at any time after it has become subject to such reporting
requirements;
(b) So long as a Holder owns any Restricted Securities, furnish to
the Holder forthwith upon written request a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 (at any time from
and after ninety (90) days following the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents so filed as a Holder may reasonably request in availing itself of any
rule or regulation of the Commission allowing a Holder to sell any such
securities without registration.
1.11 TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause
the Company to register securities granted to a Holder by the Company under this
Section 1 may be transferred or assigned by a Holder only to a transferee or
assignee of not less than 39,000 shares of Registrable Securities (as presently
constituted and subject to subsequent adjustments for
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stock splits, stock dividends, reverse stock splits, and the like), provided
that the Company is given written notice at the time of or within a reasonable
time after said transfer or assignment, stating the name and address of the
transferee or assignee and identifying the securities with respect to which such
registration rights are being transferred or assigned, and, provided further,
that the transferee or assignee of such rights assumes in writing the
obligations of such Holder under this Section 1. Notwithstanding the foregoing,
the Rights may be assigned without compliance with the 39,000 share minimum
described above to (x) any constituent partner, member (including, without
limitation, the HP I Former Equity Holders) or stockholder of a Holder that is a
partnership, limited liability company or corporation, (y) a family member of a
Holder or trust for the benefit of a Holder, the spouse of a Holder or issue of
a Holder or (z) any corporation, partnership, limited liability company or other
entity of which at least a seventy-five percent (75%) interest is owned or
controlled, directly or indirectly, by a Holder or one or more of the persons
described in (x) or (y). Any permitted transferee under this Section 1.11 shall
thereupon be deemed to be a "Holder" and an "Investor" hereunder and shall agree
in writing to be bound by the terms and conditions of this Agreement, including,
without limitation, the share minimum set forth in this Section 1.11.
1.12 "MARKET STAND-OFF" AGREEMENT. If requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, each Investor
shall not sell or otherwise transfer or dispose of any Common Stock (or other
securities) of the Company held by such Investor (other than those included in
the registration) during the one hundred eighty (180) day period following the
effective date of a registration statement of the Company filed under the
Securities Act, provided that: (a) such agreement shall only apply to the first
such registration statement of the Company, including securities to be sold on
its behalf to the public in an underwritten offering; and (b) all officers and
directors of the Company and holders of at least one percent (1%) of the
Company's voting securities are bound by and have entered into similar
agreements. The obligations described in this Section 1.12 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a transaction on Form S-4 or similar forms that may be
promulgated in the future. The Company may impose stop-transfer instructions and
may stamp each such certificate with the second legend set forth in Section
1.1(b) hereof with respect to the shares of Common Stock (or other securities)
subject to the foregoing restriction until the end of such one hundred eighty
(180) day period. Each Stockholder agrees to execute a market standoff agreement
with said underwriters in customary form consistent with the provisions of this
Section 1.12.
1.13 ALLOCATION OF REGISTRATION OPPORTUNITIES. In any circumstance in
which all of the Registrable Securities and other shares of Common Stock of the
Company (including shares of Common Stock issued or issuable upon conversion of
shares of any currently unissued series of Preferred Stock of the Company) with
registration rights (the "OTHER SHARES") requested to be included in a
registration on behalf of the Holders or other selling stockholders cannot be so
included as a result of limitations of the aggregate number of shares of
Registrable Securities and other shares that may be so included, the number of
shares of Registrable Securities and other shares that may be so included shall
be allocated among the Holders and other selling stockholders requesting
inclusion of shares pro rata on the basis of the number of shares of Registrable
Securities and other shares that would be held by such Holders and other selling
stockholders, assuming conversion; provided, however, that such allocation shall
not operate to
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reduce the aggregate number of Registrable Securities and other shares to be
included in such registration, if any Holder or other selling stockholder does
not request inclusion of the maximum number of shares of Registrable Securities
and other shares allocated to him or her pursuant to the above-described
procedure, in which case the remaining portion of his allocation shall be
reallocated among those requesting Holders and other selling stockholders whose
allocations did not satisfy their requests pro rata on the basis of the number
of shares of Registrable Securities and other shares which would be held by such
Holders and other selling stockholders, assuming conversion, and this procedure
shall be repeated until all of the shares of Registrable Securities and other
shares which may be included in the registration on behalf of the Holders and
other selling stockholders have been so allocated. The Company shall not limit
the number of Registrable Securities to be included in a registration pursuant
to this Agreement in order to include shares held by stockholders with no
registration rights or to include shares of stock issued to founders of the
Company or to employees, officers, directors, or consultants pursuant to the
Company's 1996 Incentive Stock Option Plan, or in the case of registrations
under Sections 1.2 or 1.5 hereof, in order to include in such registration
securities registered for the Company's own account.
1.14 DELAY OF REGISTRATION. No Holder shall have any right to take any
action to restrain, enjoin, or otherwise delay any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Section 1.
1.15 TERMINATION OF REGISTRATION RIGHTS. The right of any Holder to
request registration or inclusion in any registration pursuant to Section 1.2,
1.3 or 1.5 shall terminate on the closing of the first registered public
offering of Common Stock of the Company, if all shares of Registrable Securities
held or entitled to be held upon conversion by such Holder may immediately be
sold under Rule 144 during any ninety (90)-day period, or the earlier of (i)
such date after the closing of the first registered public offering of Common
Stock of the Company as all shares of Registrable Securities held or entitled to
be held upon conversion by such Holder may immediately be sold under Rule 144
during any ninety (90)-day period, and (ii) three (3) years after the closing of
the first registered public offering.
SECTION 2
INFORMATION COVENANTS OF THE COMPANY
The Company hereby covenants and agrees, as follows:
2.1 BASIC FINANCIAL INFORMATION AND INSPECTION RIGHTS.
(a) Basic Financial Information. In addition to information required
to be distributed to some or all Holders pursuant to determinations of the
management of the Company or its Board of Directors, the Company will furnish
the following reports to each Holder:
(i) within one hundred twenty (120) days after the end of each
fiscal year of the Company, a consolidated balance sheet of the Company and its
subsidiaries, if any, as at the end of such fiscal year, and consolidated
statements of income and cash flows of the Company and its subsidiaries, if any,
for such year, prepared in accordance with generally
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accepted accounting principles consistently applied, certified by independent
public accountants of recognized national standing selected by the Company.
(ii) within forty-five (45) days after the end of the first,
second, and third quarterly accounting periods in each fiscal year of the
Company, a consolidated balance sheet of the Company and its subsidiaries, if
any, as of the end of each such quarterly period, and consolidated statements of
income and cash flows of the Company and its subsidiaries, if any, for such
period.
(iii) at least thirty (30) days prior to the beginning of each
fiscal year or as otherwise determined by the Board of Directors of the Company,
a budget for such fiscal year.
(iv) within forth-five (45) days after the end of each month,
or as otherwise determined by the Board of Directors of the Company, an
unaudited balance sheet and statements of income and cash flows.
(b) Inspection Rights. The Company will afford to each Holder and to
such Holder's accountants and counsel, reasonable access during normal business
hours to all of the Company's respective properties, books and records. Each
Holder shall have such other access to management and information as is
necessary for it to comply with applicable laws and regulations and reporting
obligations. The Company shall not be required to disclose details of contracts
with or work performed for specific customers and other business partners where
to do so would violate confidentiality obligations to those parties. Holders may
exercise their rights under this Section 2.1(b) only for purposes reasonably
related to their interests under this Agreement and related agreements. The
rights granted pursuant to this Section 2.1(b) may not be assigned or otherwise
conveyed by the Holders or by any subsequent transferee of any such rights
without the prior written consent of the Company except as authorized in this
Section 2.1(b).
(c) Qualified Small Business Stock. The Company agrees that for so
long as any of the Shares are held by an Investor (or a transferee in whose
hands such Shares are eligible to qualify as "qualified small business stock"
within the meaning of Section 1202(c) of the Code), it will use best efforts to
comply with any applicable filing and reporting requirements of Section 1202 of
the Code and any regulations promulgated thereunder; provided, however, that
"reasonable efforts" as used in this Section 2.1(b)(ii) shall not be construed
to require the Company to operate its business in a manner which would adversely
affect its business, limit its future prospects or alter the timing or resource
allocation related to its planned operations or financing activities.
2.2 TERMINATION OF COVENANTS. The covenants set forth in this Section 2
shall terminate and be of no further force and effect after the closing of the
Company's first firm commitment underwritten public offering registered under
the Securities Act.
SECTION 3
RIGHT OF FIRST REFUSAL
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3.1 RIGHT OF FIRST REFUSAL TO SIGNIFICANT HOLDERS. The Company hereby
grants to each Significant Holder, the right of first refusal to purchase a pro
rata share of New Securities (as defined in this Section 3.1) which the Company
may, from time to time, propose to sell and issue. A Significant Holder's pro
rata share, for purposes of the right of first refusal, is the ratio of the
number of shares of Common Stock owned by such Significant Holder immediately
prior to the issuance of New Securities, assuming full conversion of the Shares
and exercise of any option or warrant held by said Significant Holder, to the
total number of shares of Common Stock outstanding immediately prior to the
issuance of New Securities, assuming full conversion of the Shares and exercise
of all outstanding convertible securities, rights, options and warrants to
acquire Common Stock of the Company. Each Significant Holder shall have a right
of over-allotment such that if any Significant Holder fails to exercise its
right hereunder to purchase its pro rata share of New Securities, the other
Significant Holders may purchase the non-purchasing Significant Holder's portion
on a pro rata basis within ten (10) days from the date such non-purchasing
Significant Holder fails to exercise its right hereunder to purchase its pro
rata share of New Securities. This right of first refusal shall be subject to
the following provisions:
(a) "NEW SECURITIES" shall mean any capital stock (including Common
Stock and/or Preferred Stock) of the Company whether now authorized or not, and
rights, options or warrants to purchase such capital stock, and securities of
any type whatsoever that are, or may become, convertible into capital stock;
provided that the term "New Securities" does not include:
(i) shares of Common Stock issued or issuable to key employees
and other persons (including, without limitation, directors, officers,
consultants and scientific collaborators) employed or engaged by the Company
pursuant to stock grants, option plans, purchase plans or other employee stock
incentive programs or arrangements approved by the Board of Directors of the
Company, or upon exercise of options or warrants granted to such parties
pursuant to any such plan, program or arrangement;
(ii) shares of Common Stock issued or issuable upon the
exercise or conversion of options or convertible securities of the Company
(including, without limitation, any Preferred Stock);
(iii) shares of Common Stock issued or issuable as a dividend
or distribution on the Company's securities or pursuant to any event for which
adjustment is made pursuant to paragraph 4(e), 4(f) or 4(g) of the Third Amended
and Restated Certificate of Incorporation of the Company;
(iv) shares of Common Stock issued or issuable pursuant to the
acquisition of another corporation by the Company by merger, purchase of
substantially all of the assets or other reorganization or to a joint venture
agreement, provided that such issuances are approved by the Board of Directors
of the Company, including the directors which the holders of Series C Preferred
Stock are entitled to elect pursuant to paragraph 5(d) of Article IV of the
Third Amended and Restated Certificate of Incorporation of the Company; and
(v) shares of Common Stock or Preferred Stock of the Company
which are otherwise excluded by the affirmative vote or consent of the holders
of a majority of the shares of Series C Preferred Stock then outstanding.
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(b) In the event the Company proposes to undertake an issuance of
New Securities, it shall give each Significant Holder written notice of its
intention, describing the type of New Securities, and the price and the general
terms upon which the Company proposes to issue the same. Each Significant Holder
shall have ten (10) days after any such notice is mailed or delivered to agree
to purchase such Significant Holder's pro rata share of such New Securities
(which pro rata share, in the case of HP I, may include up to all of the New
Securities) for the price and upon the terms specified in the notice by giving
written notice to the Company and stating therein the quantity of New Securities
to be purchased.
(c) In the event the Holders fail to exercise fully the right of
first refusal within said ten (10) day period and after the expiration of the
additional ten (10) day period for the exercise of the over-allotment provisions
of this Section 3.1, the Company shall have ninety (90) days thereafter to sell
or enter into an agreement (pursuant to which the sale of New Securities covered
thereby shall be closed, if at all, within ninety (90) days from the date of
said agreement) to sell the New Securities respecting which the Significant
Holders' right of first refusal option set forth in this Section 3.1 was not
exercised, at a price and upon terms no more favorable to the purchasers thereof
than specified in the Company's notice to Significant Holders pursuant to
Section 3.1(b). In the event the Company has not sold within such ninety (90)
day period or entered into an agreement to sell the New Securities in accordance
with the foregoing within sixty (60) days from the date of said agreement, the
Company shall not thereafter issue or sell any New Securities, without first
again offering such securities to the Significant Holders in the manner provided
in Section 2.3(b) above.
(d) The right of first refusal granted under this Agreement shall
expire upon, and shall not be applicable to, the first sale of Common Stock of
the Company to the public effected pursuant to a registration statement filed
with, and declared effective by, the Securities and Exchange Commission under
the Securities Act, and shall in any event expire on the third anniversary of
the date of the Agreement.
(e) The right of first refusal set forth in this Section 3.1 may not
be assigned or transferred, except that (i) such right is assignable by each
Significant Holder to any wholly owned subsidiary or parent of, or to any
corporation or entity that is, within the meaning of the Securities Act,
controlling, controlled by or under common control with, any such Significant
Holder, and (ii) such right is assignable between and among any of the
Significant Holders.
SECTION 4
MISCELLANEOUS
4.1 CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings set forth below:
(a) "APPLICABLE PERCENTAGE" shall mean thirty percent (30%) of the
Registrable Securities unless HP I is dissolved on or prior to November 30,
2004, in which case from and after the date of such dissolution it shall mean
twenty percent (20%) of the Registrable Securities.
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(b) COMMISSION" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
(c) "COMMON STOCK" shall have the meaning set forth in the recitals
hereto.
(d) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, or any similar successor federal statute and the rules and
regulations thereunder, all as the same shall be in effect from time to time.
(e) "EXISTING INVESTORS" shall have the meaning set forth in the
preamble hereto.
(f) FORMER HP I EQUITY HOLDERS" shall have the meaning set forth in
the recitals hereto.
(g) "HOLDER" shall mean any Investor who holds Registrable
Securities and any holder of Registrable Securities to whom the registration
rights conferred by this Agreement have been transferred in compliance with
Section 1.1 and Section 1.11 hereof.
(h) "HP I" shall have the meaning set forth in the recitals hereto.
(i) "INDEMNIFIED PARTY" shall have the meaning set forth in Section
1.7(c) hereto.
(j) "INDEMNIFYING PARTY" shall have the meaning set forth in Section
1.7(c) hereto.
(k) "INVESTORS" shall mean the Existing Investors, the New Investors
and the Former HP I Equity Holders.
(l) "INITIATING HOLDERS" shall mean, as of any date, any Holder or
Holders who in the aggregate hold not less than the Applicable Percentage as of
such date.
(m) "NEW INVESTORS" shall have the meaning set forth in the recitals
hereto.
(n) "NEW SECURITIES" shall have the meaning set forth in Section
3.1(a) hereto.
(o) "OCTOBER 2004 SERIES C TRANSACTION" shall have the meaning set
forth in the recitals hereto.
(p) "PREFERRED STOCK" shall mean any Preferred Stock, $0.10 par
value, of the Company, issued and outstanding as of the date of this Agreement
or issued and outstanding after the date of this Agreement.
(q) "PRIOR RIGHTS AGREEMENT" shall have the meaning set forth in the
preamble hereto.
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(r) "REGISTRABLE SECURITIES" shall mean (i) shares of Common Stock
issued or issuable to a Holder pursuant to the conversion of the Shares and
shares of Common Stock issued or issuable to a Holder upon exercise of the
Warrants, and (ii) any Common Stock issued as a dividend or other distribution
with respect to or in exchange for or in replacement of the shares referenced in
(i) above; provided, however, that Registrable Securities shall not include any
shares of Common Stock which have previously been registered or which have been
sold to the public either pursuant to a registration statement or Rule 144, or
which have been sold in a private transaction in which the transferor's rights
under this Agreement are not assigned.
(s) The terms "REGISTER," "REGISTERED" and "REGISTRATION" shall
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such registration statement.
(t) "REGISTRATION EXPENSES" shall mean all expenses incurred in
effecting any registration pursuant to 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 expenses of any regular or special audits incident to or
required by any such registration, but shall not include Selling Expenses, fees
and disbursements of counsel for the Holders and the compensation of regular
employees of the Company, which shall be paid in any event by the Company.
(u) "RESTRICTED SECURITIES" shall mean any Registrable Securities
required to bear the first legend set forth in Section 1.1(b) hereof.
(v) "RULE 144" shall mean Rule 144 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
(w) "RULE 145" shall mean Rule 145 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
(x) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
(y) "SELLING EXPENSES" shall mean all underwriting discounts,
selling commissions and stock transfer taxes applicable to the sale of
Registrable Securities by a Holder and fees and disbursements of counsel for
such Holder (other than the fees and disbursements of counsel included in
Registration Expenses).
(z) "SERIES B PREFERRED STOCK" shall have the meaning set forth in
the recitals hereto.
(aa) "SERIES C PREFERRED STOCK" shall have the meaning set forth in
the recitals hereto.
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(bb) "SHARES" shall mean the Company's Series B Preferred Stock and
Series C Preferred Stock.
(cc) "SIGNIFICANT HOLDERS" shall mean each Holder who owns Shares
acquired at an aggregate original purchase price of at least $100,000 unless HP
I is dissolved on or prior to November 30, 2004, in which case from and after
the date of such dissolution, it shall mean each Holder who owns Shares acquired
at an aggregate original purchase price of at least $100,000 and each Former HP
I Equity Holder.
(dd) "WARRANT COMMON SHARES" shall have the meaning set forth in the
recitals hereto.
(ee) "WARRANT SERIES C SHARES" shall have the meaning set forth in
the recitals hereto.
(ff) "WARRANTS" shall have the meaning set forth in the recitals
hereto.
4.2 AMENDMENT. 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 referencing this Agreement and signed by the Company and
the Holders holding a majority of the Registrable Securities (excluding any of
such shares that have been sold to the public or pursuant to Rule 144). Any such
amendment, waiver, discharge or termination effected in accordance with this
paragraph shall be binding upon each Holder and each future holder of all such
securities of Holder. Each Holder acknowledges that by the operation of this
paragraph, the holders of a majority of the Common Stock issued or issuable upon
conversion of the Shares and exercise of the Warrants (excluding any of such
shares that have been sold to the public or pursuant to Rule 144) will have the
right and power to diminish or eliminate all rights of such Investor under this
Agreement.
4.3 NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified
mail, postage prepaid, sent by facsimile or otherwise delivered by hand or by
messenger addressed:
(a) if to an Investor, at such Investor's facsimile number or
address as shown in the Company's records, as may be updated in accordance with
the provisions hereof;
(b) if to any other holder of any Shares or the underlying Common
Stock, at such address or facsimile number as shown in the Company's records,
or, until any such holder so furnishes an address or facsimile number, to the
Company, then at the address of the last holder of such Shares or underlying
Common Stock for which the Company has contact information in its records; or
(c) if to the Company, one copy should be sent to Electro-Optical
Sciences, Inc., Xxx Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 or to facsimile number
(000)000-0000 and addressed to the attention of the Chief Executive Officer, or
at such other address or facsimile number as the Company shall have furnished to
the Investors, with a copy to counsel to the Company, to Xxxxxx LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000 or to facsimile number (000)000-0000 and addressed to
the attention of Xxxxxxx X. Price, Esq.
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Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or 72
hours after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States mail, addressed and mailed as aforesaid or, if
sent by facsimile, upon confirmation of facsimile transfer.
4.4 GOVERNING LAW. This Agreement shall be governed in all respects by the
internal laws of the State of New York as applied to agreements entered into
among New York residents to be performed entirely within New York, without
regard to principles of conflicts of law.
4.5 SUCCESSORS AND ASSIGNS. This Agreement, and any and all rights, duties
and obligations hereunder, shall not be assigned, transferred, delegated or
sublicensed by any Investor without the prior written consent of the Company.
Any attempt by an Investor without such permission to assign, transfer, delegate
or sublicense any rights, duties or obligations that arise under this Agreement
shall be void. Subject to the foregoing and except as otherwise provided herein,
the provisions of this Agreement shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties.
4.6 ENTIRE AGREEMENT. This Agreement and the exhibit hereto constitute the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and supercedes in its entirety the Prior Rights Agreement,
which shall have no further force and effect. No party hereto shall be liable or
bound to any other party in any manner with regard to the subjects hereof or
thereof by any warranties, representations or covenants except as specifically
set forth herein.
4.7 DELAYS OR OMISSIONS. Except as expressly provided herein, no delay or
omission to exercise any right, power or remedy accruing to any party to this
Agreement upon any breach or default of any other party under this Agreement
shall impair any such right, power or remedy of such non-defaulting party, nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring, nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to any party to this Agreement, shall be cumulative and not
alternative.
4.8 SEVERABILITY. Unless otherwise expressly provided herein, the rights
of the Investors hereunder are several rights, not rights jointly held with any
of the other Investors. 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, and the parties agree to negotiate, in good faith, a
legal and enforceable substitute provision which most nearly effects the
parties' intent in entering into this Agreement.
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4.9 TITLES AND SUBTITLES. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs and exhibits shall, unless otherwise provided, refer to sections and
paragraphs hereof and exhibits attached hereto.
4.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties that
execute such counterparts, and all of which together shall constitute one
instrument.
4.11 TELECOPY EXECUTION AND DELIVERY. A facsimile, telecopy or other
reproduction of this Agreement may be executed by one or more parties hereto,
and an executed copy of this Agreement may be delivered by one or more parties
hereto by facsimile or similar electronic transmission device pursuant to which
the signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties hereto agree to execute an original
of this Agreement as well as any facsimile, telecopy or other reproduction
hereof.
4.12 JURISDICTION; VENUE. With respect to any disputes arising out of or
related to this Agreement, the parties consent to the exclusive jurisdiction of,
and venue in, the state courts in New York County in the State of New York (or
in the event of exclusive federal jurisdiction, the courts of the Southern
District of New York).
4.13 JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT
OF OR RELATED TO THIS AGREEMENT.
4.14 FURTHER ASSURANCES. Each party hereto agrees to execute and deliver,
by the proper exercise of its corporate, limited liability company, partnership
or other powers, all such other and additional instruments and documents and do
all such other acts and things as may be necessary to more fully effectuate this
Agreement.
4.15 CONFIDENTIALITY. Anything in this Agreement to the contrary
notwithstanding, no Investor by reason of this Agreement shall have access to
any trade secrets or classified information of the Company. The Company shall
not be required to comply with any information rights of Section 2 in respect of
any Investor whom the Company reasonably determines to be a competitor or an
officer, employee, director or holder of more than ten percent (10%) of a
competitor. Each Investor acknowledges that the information received by them
pursuant to this Agreement may be confidential and for its use only, and it will
not use such confidential information in violation of the Exchange Act or
reproduce, disclose or disseminate such information to any other person (other
than its employees or agents having a need to know the contents of such
information, and its attorneys), except in connection with the exercise of
rights under this Agreement, unless the Company has made such information
available to the public generally or such Investor is required to disclose such
information by a governmental authority.
-21-
4.16 TERMINATION UPON CHANGE OF CONTROL. This Agreement (excluding any
then-existing obligations) shall terminate upon (a) the acquisition of the
Company by another entity by means of any transaction or series of related
transactions (including, without limitation, any stock acquisition,
reorganization, merger or consolidation) other than a transaction or series of
transactions in which the holders of the voting securities of the Company
outstanding immediately prior to such transaction continue to retain (either by
such voting securities remaining outstanding or by such voting securities being
converted into voting securities of the surviving entity), as a result of shares
in the Company held by such holders prior to such transactions, at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately after such
transaction or series of transactions; or (b) a sale, lease or other conveyance
of all or substantially all of the assets of the Company.
4.17 NOTICE OF DISSOLUTION OF HP I. Within five (5) business days of the
effective date of the dissolution of HP I, the former managing member(s) of HP I
shall deliver a written notice to each Significant Investor setting forth the
effective date of the dissolution of HP I.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-22-
IN WITNESS WHEREOF, the parties hereto have executed this Second Amended
and Restated Investors' Rights Agreement effective as of the day and year first
above written.
COMPANY:
ELECTRO-OPTICAL SCIENCES, INC.
a Delaware corporation
By: /s/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
[Signature Page to Second Amended and Restated Investors' Rights Agreement]
23
/s/ XXXXXXX XXXXXX
---------------------------------
Xxxxxxx Xxxxxx
/s/ XXXXXXXX XXXXXX
---------------------------------
Xxxxxxxx Xxxxxx
/s/ XXXX XXXXXXX
---------------------------------
Xxxx Xxxxxxx
CAREMI PARTNERS
By: /s/ XXXXXXX XXXXXXXX
------------------------------
Name: XXXXXXX XXXXXXXX
-----------------------
Title: PRESIDENT
----------------------
/s/ XXXXXXXX BRILLIANT
---------------------------------
Xxxxxxxx Brilliant
/S/ XXXXXXX BRILLIANT
---------------------------------
Xxxxxxx Brilliant
[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
24
XXXXX AND XXXXXXXX XXXXXXXXX, AS
TENANTS BY THE ENTIRETY
/s/ XXXXX XXXXXXXXX
----------------------------------
Xxxxx Xxxxxxxxx
/s/ XXXXXXXX XXXXXXXXX
----------------------------------
Xxxxxxxx Xxxxxxxxx
/s/ XXXX XXXXXX
--------------------------------------
Xxxx Xxxxxx
/S/ XXXXXX XXXXXX
--------------------------------------
Xxxxxx Xxxxxx
/s/ XXXX XXXXXX
--------------------------------------
Xxxx Xxxxxx
/s/ XXXX XXXXXX
--------------------------------------
Xxxx Xxxxxx
/s/ XXXXX XXXXXX
--------------------------------------
Xxxxx Xxxxxx
[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
25
/s/ XXXXXX XXXXXXX
------------------------------------------
Xxxxxx Xxxxxxx
/s/ XXX X. XXXXXX
------------------------------------------
Xxx X. Xxxxxx
/s/ XXXXXXX X. XXXXXX AND XXXXXX X. XXXXXX
------------------------------------------
Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx
XXXXXXX GROUP, LLC
By: /s/ XXXXX X. XXXXXX
--------------------------------------
Name: XXXXX X. XXXXXX
--------------------------------
Title: TREASURER
--------------------------------
/s/ XXXXX XXXXX
------------------------------------------
Xxxxx Xxxxx
/s/ XXXXXXX FUX
------------------------------------------
Xxxxxxx Fux
/s/ XXX XXXXXX
------------------------------------------
Xxx Xxxxxx
[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
26
XXXXX X. XXXXXXXX FAMILY TRUST,
XXXXX AND XXXXXX XXXXXXXX TRUSTEES
By: /s/ XXXXXX XXXXXXXX
----------------------------------
Xxxxxx Xxxxxxxx,
Trustee
By: /s/ XXXXX X. XXXXXXXX
----------------------------------
Xxxxx X. Xxxxxxxx,
Trustee
/s/ XXXXX XXXXXX
--------------------------------------
Xxxxx Xxxxxx
/s/ XXXXXXX PERL
--------------------------------------
Xxxxxxx Perl
[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
27
EXHIBIT A
INVESTORS
1. EXISTING INVESTOR:
a. SERIES B PREFERRED
Shares of Series B
Series B Preferred Shareholders Preferred Stock
---------------------------------- ------------------
Arcadian Venture Partners, LP 156,000
Attn: Xxxxxx Xxxxxxxx
Double D Venture Fund, LLC 61,538
Attn: Xxxxxx Xxxxxxxxx
Peponi, LLC 39,000
Attn: Xxxxxx X. Xxxxxxxxxxxx
Xxxxx Xxxxxxxx 18,461
Estate of Xxxxxxx X Xxxxx 15,384
c/o Xxxx Xxxxx, Executor
RL Capital Partners 11,538
Attn: Xxxxxx X. Xxxxx
Xxxx X. Xxxxxxx 9,820
Xxxx X Xxxxxxx & 9,231
Xxxx X Xxxxxxx JTWROS
Pensco Pension Services Cust 9,230
FBO Xxxxxx X. Xxxxxxx XXX Rollover
Xxxx Xxxxxxxx & 9,230
Xxxx X'Xxxxxxxxxxx JTWROS
General Home Furnishings, Inc. 9,230
Attn: Xxxx Xxxxxxx
Xxxxxxx Xxxxx Xxxxxx Cust 9,230
FBO Xxxxxxx X. Xxxxx SEP XXX
Xxxx X. Xxxxxxx 8,461
Xxxxxx X Xxxxxx & 8,232
Xxxxx X Xxxxxx JTWROS
Xxxxxx Xxxxxxxxxx & 7,692
Xxxxxxx Xxxxxxxxxx JTWROS
Xxxxxxx Xxxxx TTEE 7,692
Xxxxxxx Xxxxx Revocable Trust
DTD 05/16/2000
Xxxxx X. XxXxx 7,692
Xxxxxxxx X Xxxxxxx 7,692
-i-
Xxxxxxxx X. Xxxxx & 7,692
T. Xxxxx Xxxx JTWROS
Xxxxxxx X. Xxxxxx 7,692
The High Street Venture Fund LLC 7,692
King Xxxxxx & West Xxxxxx
Xxxx X. XxXxxxx Xx. 7,384
Xxxxxx X. Xxxxxxxxxx 6,461
Xxxxxxxx X. Xxxxx & 6,153
Xxxxxx Xxxxx JTWROS
Xxxxx X. Xxxxxx & 5,423
Xxxxxx X. Xxxxxx JTWROS
Xxxxxx X. Xxxxxxxx 5,386
Xxxxxx X Xxxx & Xxxxx X Xxxx TTEES 5,384
The Aoki Family Trust DTD 5/29/1991
Xxxxxxx X. Xxxxxx & 5,384
Xxxxx X. Xxxxxx JTWROS
Xxxxxx X. Xxxxxxxx Xx. & 5,384
Marije TerEllen JTWROS
Xxxxx X Xxxxxxx 5,000
Xxxxx X. Xxxxx & 4,846
Xxxxxx X. Xxxxx JTWROS
Xxxx Xxxx & 4,615
Xxxxxxxx Xxxx JTWROS
Xxxxx X. Xxxxxxx & 4,615
Xxxx X. Xxxxxxx JTWROS
Xxxxxxx Notas & Eve Xxxxxxx Notas TTEES 4,615
The Notas Family Trust U/A/D 08/13/1997
Xxxxxxx Investment Capital, LLC. 4,615
Attn: Xxxxx X Xxxxxx
Xxxxxxxxx X. Xxxx 4,615
Xxxxx X Xxxxxxx 4,615
Xxxxx X. Xxxxxxx 4,615
Xxxxx X. Xxxxx & Xxxxx X. Xxxxx TTEES 4,615
The Xxxxx Joint Revocable Trust DTD 7/23/93
Xxxxx X. Xxxxxxx 4,615
Xxxxxxxx Xxxxxxxxx & 4,615
Xxxxxxx Xxxxxxxxx JTWROS
Xxx Xxxxxxx 4,615
Xxxxxxx X. & Xxxxxx X. Xxxxxx TTEES 4,615
Xxxxxx 1999 Living Trust DTD 6/23/1999
Xxxxx X. Xxxxxx & 4,500
Xxxxxxx X. Xxxxxx JTWROS
-ii-
Xxxxxxx X. Xxxxxxxx & 4,320
Xxxxx X. XxxXxxxxx JTWROS
Xxxx X Xxxxxxxx & 4,307
Xxxxx X Xxxxxxxx JTWROS
Xxxxx Xxxxxxxxxxx 4,230
Xxxx X Xxxxxxxxx 4,146
Caribam Resources Inc. 4,130
Attn: J. Xxxx Xxxxxx
Xxxx X. Xxxxxxx 4,116
Xxxxxxx X. Xxxxxx III 4,061
Xxxxx X. Deutsch 4,038
Xxxxx X. Xxxxxxxxxx 4,000
Xxxxxxxx X. Xxxxxx 4,000
Xxxxxxxxxx X. Xxxxxx 3,846
Xxxxxxx Xxxxxx & 3,846
Xxxxxx Xxxxxx JTWROS
Xxxxxx X. Xxxxxxxx & 3,846
Xxxxx X. Xxxxx-Xxxxxxxx COMM PROP
Barnegat Bay Investor Group 3,846
Attn: Xxxxxx X. Xxxxx
Xxxxx Xxxxx 3,846
Xxxxx Xxxxxx 3,846
Xxxxxxx X. Christians & 3,846
Xxxxxxx X. Christians JTWROS
Xxxxxxx X. Xxxxxxx 3,846
Xxxx X. Xxxxxxx 3,846
Xxxxx Xxxxxxx 3,846
Xxxxxxxx X. Xxx 3,846
Xxxxx X. Xxxxxxxx & 3,846
Xxxxxxx Xxxxxxxx JTWROS
Xxxxxx X Xxxxxx 3,846
Xxxxxx X Xxxxxx & M Xxxxxx Xxxxxx TTEES 3,846
The Xxxxxx Xxxxxxx Xxxxxx Revocable Trust
DTD 06/07/99
Xxxxxx X. Xxxxxx 3,846
Xxxxxx X. Xxxxxx 3,846
Xxxxx X. Xxxx 3,846
Xxxxx Xxxxxx 3,846
Xxxxxx X. Xxxxxxx 3,846
-iii-
Eagle Rock Venture Capital Partners, LP 3,846
Attn: Xxxxxxx Xxxxxxx, Xxxx Xxxxxxx,Xxx Xxxxxxx
Xxxxx X. Xxx & 3,846
Xxxxx Xx JTWROS
Xxxxxx Xxxxxxx Ang & Xxxxx Xxxxxx Ang TTEES 3,846
The 1993 Xxxxxx Xxxxxxx Ang &
Xxxxx Xxxxxx Ang Revocable Trust, DTD 7/31/93
Xxxxx Xxxxxx 3,846
Xxxxxx X. Xxxxxx 3,846
Xxxxxx X. Xxxxxxx & 3,846
Xxxxxxxx X. Xxxxxxx JTWROS
Xxxxxx X. Xxxxxxxx 3,846
Xxxx X. Xxxxxx 3,846
Xxxx X Xxxxx,Xxxx A Pick, Xxx X Xxxxxxxx TTEES 3,846
Xxxxxxx Xxxxxxx Xxxxx Testamentary Trust
DTD 11/01/96
Xxxxxx XxXxx 3,846
Heritage Venture Funds, LLC 3,846
Attn: Xxxxxxx X. Xxxxxx
Hillcrest Investors, L.P. 3,846
Attn: Xx. Xxx Xxxxxxxxxxx
Xxxxxxx Xxxxxx 3,846
Xxxxx X. Xxxxxxxx & Xxxx X. Xxxx TTEES 3,846
Xxxxx X. Xxxxxxxx 1999 Revocable Trust
DTD 04/12/99
Xxxxx X Xxxxxxx & 3,846
Xxxxxxx Xxxxxxx JTWROS
Xxxxx X. Xxxxxxxx 3,846
Xxxxx X. Xxxx & 3,846
Xxx X. Xxxx JTWROS
Xxxxx X. Xxxxxxx 3,846
Xxxxxx X. Xxxxxx & 3,846
Xxxxxxxx X. Xxxxxxx JTWROS
Xxxx Xxxxx 3,846
Xxx Xxxxxxxx & Xxxxx Xxxxxxxx TTEES 3,846
Xxx N and Xxxxx X Xxxxxxxx Rev Trust
DTD 10/30/96
Xxxx X Xxxxxxxx Xx 3,846
Xxxx X. Xxxxxxxx III 3,846
Xxxx XxXxxxxx 3,846
Xxxx Xxxxxxx 3,846
Xxxx X Xxxxx & 3,846
Xxxxxxx X Xxxxx COMM PROP
-iv-
Xxx X. Xxxxxxx & 3,846
Xxxxxxx X. Xxxxxxx JTWROS
Xxx XxXxxxxx & 3,846
Xxxxx X. XxXxxxxx COMM PROP
Xxx X. Xxxxxx 3,846
Xxxxxxxx X. Xxxxxxxx 3,846
Xxxxxxxx X. Xxxxxxx 3,846
Xxxxx X. XxXxxxxxxx 3,846
Xxxx X. Xxxx 3,846
Xxxxx X. Xxxx & 3,846
Xxxxxxxx X. Xxxx COMM PROP
Xxxx Xxxxx & 3,846
Xxxxxxxx Xxxxx JTWROS
Xxxxxxxx X. Xxxxx 3,846
Xxxx X Xxxxxxx & 3,846
Xxx X Xxxxxxx JTWROS
Xxxxxxx X. Xxxxxxxx TTEE 3,846
The Trust U/A Xxxxxxx X. Xxxxxxxx
DTD 03/16/1994
Xxxxxx X. Xxxxxxx 3,846
Xxxx Lunenburg 3,846
Vanmark Associates Inc. 3,846
Pension Profit Sharing Plan
Xxxx X Xxxxxx TTEE
Xxxxxxx Xxxxxxxx 3,846
Xxxxx X. Xxxxx 3,846
Xxxxxxx X. Xxxx 3,846
Xxxxxxx X Xxxxxxxxx 3,846
Xxxxxxx X. Xxxxxxx & 3,846
Xxxxxxxxx X. Xxxxxxx JTWROS
Xxxxxx Xxxxxxxx 3,846
Xxxxxx X Xxxxxxx 3,846
Xxxx X. Xxxxx 3,846
Pensco Pension Services Cust 3,846
FBO Xxxxxxx XxXxxxxx XXX Rollover
Pensco Pension Services Cust 3,846
FBO Xxxxxx Xxxxx XXX
Xxxx Xxxxxx 3,846
Xxxxx X. Xxxxx 3,846
Xxxxxxx Xxxxxx & 3,846
Xxxxxx Xxxxxx JTWROS
-v-
Prabhas X. Xxxxxxxx & 3,846
Xxxxxxxxx Xxxxxxxx COMM PROP
Xxxx Xxxxxx 3,846
Xxxxxx X. Xxxxxxxx 3,846
Xxxxxx X. Xxxx 3,846
Xxxxxx X. Xxxx TTEE 3,846
The Xxxxxx X. Xxxx Living Trust
DTD 09/22/1998
Xxxxxx X. & Xxxxxxx X. Xxxxxxxx TTEES 3,846
The Xxxxxxxx Family Living Trust
DTD 01/24/1994
Xxxxx X. Block & 3,846
Xxxxxxxx X. Block JTWROS
Xxxxxx X. Xxxxxx 3,846
Xxxxxx Xxxxxx 3,846
Xxxx X Xxxxxx 3,846
Xxxxxxx X. Xxxxxx & 3,846
Xxxxxx Xxxxxx JTWROS
Xxxxxxx Xxxxx 3,846
Xxxxxxxx X. Xxxxxx 3,846
Xxxxxxx X. Xxxxxx 3,846
Xxxxxx X. Xxxxxxx III 3,846
Xxx X Xxxxxxxxx 3,846
Xxxxxxx X. Xxxxxxx 3,846
Xxxxxxx X. Xxxxxx 3,846
Xxxxxxx X. Xxxxxx 3,846
Xxxxxxx X. Xxxxxxxx 3,846
Xxx X Xxxxxxxxx 1,923
Xxxxxxxxx Xxxxxxxx 1,923
-vi-
b. SERIES C PREFERRED
SHARES OF SERIES
C PREFERRED WARRANT COMMON WARRANT SERIES C
INVESTOR STOCK SHARES(1) SHARES(2)
------------------------- ---------------- -------------- -----------------
Health Partners I 1,150,754 1,150,754 121681
Xxxx Xxxxxxxx 99,558 24,890
Xxxxxxx, Xxxx & Jan 2,212
Xxxxxx, Xxxx 2,212
Xxxxxx, Xxxxxxx & Xxxxx 2,212
Xxxxx, Xx. General Xxxxx 4,425
Xxxxxx, Xxxxx 6,637
Eagle Rock Ventures 2,212
Xxxxxxx, Xxx 22,124
Xxxxxx, Xxxxxxx 4,425
Xxxxxx, Xxxx 2,212
Xxxxxxx, Xxxx 2,212
Xxxxxx, Xxxxxxx 22,124
Xxxxxx, Xxxxxxxx X. 4,425
Xxxxxxxx, Xxxxxxx 2,212
Xxxxxx, Xxxxxxx 4,425
Xxxxxxxxxx, Xxxxxx 4,425
Xxxxxx, Xxx 11,062
Xxxxxx, Xxx 2,212
Xxxx, Xxxx and Xxxxxxxx 2,212
Xxxxxxxx, Xxxx & 6,637
X'Xxxxxxxxxxx
Xxxxxxx, Xxxxx X. 2,212
Xxxxxxxx, Xxxxxx X. 11,062
Xxxxxx, Xxxxxx 2,212
Xxxxxxxx, Xxxxxx 2,212
Xxxxxxxxx, Xxxx 4,425
Xxxxxxxxx, Xxxxxxxx 4,425
Xxxxxxxx, Xxxxxx 6,637
Xxxxxxx Capital Group 2,212
------------
(1) Warrant Common Shares" means shares of Common Stock issuable upon exercise
of warrants to purchase Common Stock issued by the Company.
(2) "Warrant Series C Shares" means shares of Series C Preferred Stock issuable
upon exercise of warrants to purchase Series C Preferred Stock issued by the
Company.
-vii-
2. NEW INVESTORS
SHARES OF
SERIES C WARRANT
PREFERRED COMMON
PURCHASER STOCK SHARES
---------------------------------- --------- ---------
Xxxxxxx Xxxxxx 45,000 45,000
Xxxxxxxx Xxxxxx 44,250 44,250
Xxxx Xxxxxxx 44,248 44,248
Caremi Partners 884,955 884,955
Xxxxxxxx Brilliant 309,734 309,734
Xxxxxxx Brilliant 88,495 88,495
Xxxxx and Xxxxxxxx Xxxxxxxxx, TBE 26,550 26,550
Xxxx Xxxxxx 265,486 265,486
Xxxxxx Xxxxxx 22,124 22,124
Xxxx Xxxxxx 11,062 11,062
Xxxx Xxxxxx 11,062 11,062
Xxxxx Xxxxxx 11,062 11,062
Xxxxxx Xxxxxxx 44,248 44,248
Xxx X. Xxxxxx 100,000 100,000
Xxxxxxx X. Xxxxxx and Xxxxxx X
Xxxxxx, JTWROS 6,999 6,999
Xxxxxxx Group, LLC 221,239 221,239
Xxxxx Xxxxx 44,247 44,247
Xxxxxxx Fux 221,238 221,238
Xxx Xxxxxx 88,495 88,495
Xxxxx X. Xxxxxxxx Family Trust,
Xxxxx and Xxxxxx Xxxxxxxx Trustees 44,427 44,427
Xxxxx Xxxxxx 132,743 132,743
Xxxxxxx Perl 44,247 44,247
The Xxxxxxx Xxxxxxxx 2004
Revocable Trust
Xxxxx X. Xxxxx as Trustee 44,247 44,247
Xxxx Xxxxx 11,000 11,000
Xxxx Xxxxxxx 110,619 110,619
Xxxx Xxxxxxx 110,619 110,619
Xxxx Xxxxxxx 119,469 119,469
Xxxxx Xxxxxx 90,929 90,929
Xxxx Xxxxx 15,486 15,486
Xxxx Xxxxxx 44,248 44,248
Xxxxx Xxxxx 176,991 176,991
Xxxxx & Company LLC 110,619 110,619
-viii-
SHARES OF
SERIES C WARRANT
PREFERRED COMMON
PURCHASER STOCK SHARES
---------------------------------- --------- ---------
Xxxxxx X. Xxxxxxx 22,123 22,123
Xxxx Zikora 10,000 10,000
3. FORMER HP1 MEMBERS
MEMBERS SHARES
OF HEALTH OF SERIES C WARRANTS COMMON WARRANT SERIES
PARTNERS I, LLC PREFERRED STOCK SHARES C SHARES
---------------------------- --------------- ---------------- ---------------
Caremi Partners Ltd. 221,177 221,177 23,387
Xxxx X. Xxxxxx 132,682 132,682 14,030
Xxx X. Xxxxxx 110,587 110,587 11,694
Xxxxx & Company LLC 88,608 88,608 9,369
Xxxxx X. Xxxxxx 88,608 88,608 9,369
Xxxxxxxx Brilliant 44,304 44,304 4,685
Xxxxxx X. Xxxxxxxx, M.D. 44,304 44,304 4,685
Xxxxxx X. Xxxxxxx, M.D 44,304 44,304 4,685
Xxxxxx Xxxxxx, D.D.S. 44,304 44,304 4,685
Xxxxxx Xxxxxxx 44,304 44,304 4,685
Xxxxx and Xxxxxxxx Xxxxxxxxx 44,304 44,304 4,685
Xxxx Xxxxx 44,304 44,304 4,685
Xxxxxxx X. Xxxxxx 44,304 44,304 4,685
-ix-
MEMBERS SHARES
OF HEALTH OF SERIES C WARRANTS COMMON WARRANT SERIES
PARTNERS I, LLC PREFERRED STOCK SHARES C SHARES
------------------------- --------------- ---------------- ---------------
Xxxxxxx Xxxxxx Trust 27,618 27,618 2,920
Xxxxxx Xxxxxx Trust 27,618 27,618 2,920
Xxxxx Xxxxxx Living Trust 27,618 27,618 2,920
Xxxxxxxx X. Xxxxxx Trust 27,618 27,618 2,920
Xxxxxx Xxxxxxxxx 22,094 22,094 2,336
Xxxx Xxxxx 22,094 22,094 2,336
--------- --------- -------
TOTAL 1,150,754 1,150,754 121,681
--------- --------- -------
-x-
