EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of June 21, 2007 by and among Vasomedical, Inc., a Delaware corporation
(the "Company"), and each of Xxxxx Manufacturing Corp., a New York corporation
("Xxxxx"), and Living Data Technology Corporation, a New York corporation
("Living Data").
This Agreement is made pursuant to (1) the Securities Purchase Agreement
dated as of the date hereof (the "Securities Purchase Agreement") by and between
the Company and Xxxxx and (2) the Distribution Agreement dated as of the date
hereof (the "Distribution Agreement") by and between the Company and Living
Data, pursuant to which each of Xxxxx and Living Data is acquiring certain
equity securities of the Company, and this Agreement shall become effective only
upon a Closing pursuant to the Securities Purchase Agreement.
The Company and the Purchasers hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Securities Agreement or the Distribution Agreement shall
have the meanings given such terms in the Securities Purchase Agreement or the
Distribution Agreement. As used in this Agreement, the following terms shall
have the following meanings:
"Holder" or "Holders" means the holder or holders (including Xxxxx and
Living Data), as the case may be from time to time, of Registrable Securities
(including any permitted assignee).
"Registrable Securities" means the Xxxxx Shares, the Warrant Shares, the
Living Data Shares and any shares of the Common Stock issued or issuable upon
any stock split, dividend or other distribution, recapitalization, anti-dilution
adjustment or similar event with respect to the foregoing or in connection with
any provision in the Securities Purchase Agreement, the Distribution Agreement
or the Warrant.
2. Grant of Rights. If the Company intends to file with the SEC under the
Securities Act at any time after July 1, 2008 a registration statement (the
"Registration Statement") with respect to shares of the Common Stock (other than
on the SEC's current Form S-8 or Form S-4 (or any replacement therefor)), the
Company will offer each of the Holders the opportunity to sell the Registrable
Securities pursuant to the Registration Statement. Each Holder shall have ten
(10) days from receipt of the Company's notice to accept or reject the offer,
specifying as to the number of shares of the Registrable Securities as to which
the Holder requests registration. Such registration shall be at no cost to the
Holders other than for the fees of counsel, if any, each Holder may wish to
retain in connection with such process or any applicable transfer taxes or the
underwriting discounts or commissions applicable to the shares of the Common
Stock sold by each Holder pursuant thereto. In connection with the Registration
Statement, each Holder shall, within five (5) Business Days of receipt of any
notice from the Company requesting the same, furnish to the Company such
information as the Company may reasonably request with respect to such Holder's
plan of distribution, such Holder's ownership of securities of the Company other
than those acquired pursuant to the Securities Purchase Agreement or the
Distribution Agreement and such other information as may be required to effect
such registration, including information that is subsequently requested by the
Staff of the SEC. The Holders may exercise these "piggyback" registration rights
only twice. Notwithstanding the foregoing, in the event that (i) the Holders
seek to offer for sale at market on a delayed or continuous basis Registrable
Securities and (ii) the number of Registrable Securities sought to be include in
the any such Registration Statement by the Holders exceeds the number of shares
that may be sold on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act (or any successor rule), as determined by the Company based on
the advice of counsel or as set forth in a comment letter from the staff of the
SEC, then the number of Registrable Securities in such Registration Statement
shall be reduced to the maximum number that may be sold by the Holders as a
"secondary' offering at market on a delayed or continuous basis. As to such
Registrable Securities not include in a Registration Statement, the Holders
shall be entitled to subsequently exercise "piggyback" registration rights as
provided above in this Section 2, even if the Holders had previously exercised
"piggyback" registration rights on two or more occasions. The Company shall not
be obligated to register the Holder's shares of the Registrable Securities if
counsel to the Company shall deliver an opinion to the Holder that the proposed
sale or other transfer of the Xxxxx Shares, the Living Data Shares or the
Warrant Shares, whichever is applicable, is exempt from applicable federal and
state securities registration requirements and would result in all purchasers
and transferees from such Holder obtaining securities which are not "restricted
securities" as defined in SEC Rule 144(a)(3) under the Securities Act.
3. Maintenance of Registration. The Company shall be required to maintain
the effectiveness of the Registration Statement registering the shares of the
Registrable Securities until the earlier of (a) the public sale of all of the
shares of the Common Stock registered thereunder for the Holder, (b) the
expiration of one year from the date the Registration Statement has been
declared effective by the SEC, or (c) receipt of an opinion from counsel to the
Company that the proposed sale or other transfer by the Holder is exempt from
applicable federal and state securities registration requirements and would
result in all purchasers and transferees from the Holder obtaining securities
which are not "restricted securities" as defined in Rule 144(a)(3) under the
Securities Act. If the Holder's right to sell is delayed as provided in Section
4 or Section 6 hereof, then the period of delay shall be added to the one-year
period in clause (b) of this Section 3. The Company shall comply with Rule 172
under the Securities Act.
4. Underwriter's Hold on Selling. If, during any time in which the Company
is required to keep effective the Registration Statement, it is the opinion of
the Company's managing underwriter that, in any underwritten offer of securities
then contemplated by the Company, the continued offering of the shares of the
Common Stock of the Holder, when added to the other securities being registered
by the Company (plus those of any other selling stockholder), will exceed the
maximum amount of the Company's securities which the managing underwriter
believes can be marketed (a) at a price reasonably related to their current
market value, or (b) without materially adversely affecting the offering by the
Company, then the Holder agrees to cease its resales for a period of up to 90
days from the effective date of this new registration statement as requested by
the managing underwriter.
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5. Compliance with Regulation M. Each Holder shall, at any time it engages
in a distribution of the shares of the Common Stock registered for the Holder,
comply with all applicable requirements of Regulation M (or any successor
provisions then in force) promulgated under the Exchange Act and (a) will not
engage in any stabilization activity in connection with the securities of the
Company in contravention of the rules and regulations of the SEC, (b) will
distribute the shares of the Common Stock registered for the Holder solely in
the manner described in the Registration Statement and (c) will not bid for, or
purchase, any securities of the Company, or induce any person to purchase any
securities of the Company, other than as permitted under the Exchange Act.
6. Non-Current Prospectus. If the Company shall at any time during the
period it is obligated to keep the Registration Statement effective, based on
the advice of its counsel, conclude that the prospectus constituting Part I of
the Registration Statement no longer complies with Section 10(a)(3) of the
Securities Act, the Company shall promptly notify the Holder to cease use of
such prospectus and shall promptly take actions either to amend the Registration
Statement or to supplement the prospectus so that the Holder will thereafter
have a prospectus complying with Section 10(a)(3) of the Securities Act to
resell the Holder's shares of the Shares. The Holder shall, upon receipt of the
foregoing notice from the Company, forthwith discontinue disposition of the
shares of the Shares offered by the Holder pursuant to the Registration
Statement until receipt of copies of the supplemented or amended prospectus
complying with Section 10(a)(3) of the Securities Act.
7. Change in Distribution. At least five (5) Business Days prior to any
disposition of the Holder's shares (other than pursuant to an underwritten
offering) by the Holder, if the Holder intends to change its plan of
distribution from that described in the Registration Statement, the Holder will
orally advise the Company (and promptly confirm such advice in writing) of the
change in the plan of distribution, with such other information as the Company
may reasonably request in order to supplement the prospectus constituting Part I
of the Registration Statement in accordance with the rules and regulations of
the SEC. Promptly after receiving such advice, the Company will, if necessary,
prepare a supplement to the prospectus based upon such advice and file the same
with the SEC pursuant to Rule 424(b) under the Securities Act.
8. Underwritten Offering. If the Registration Statement involves an
underwritten public offering, then (a) the Company shall enter into, and perform
its obligations under, an underwriting agreement, in usual and customary form,
with the managing underwriter and (b) each Holder shall also enter into, and
perform its obligations under, the underwriting agreement.
9. Indemnification
(a) Indemnification by the Company. The Company shall indemnify and hold
harmless, to the full extent permitted by law, the Holders and their respective
directors and officers (if applicable) and each person, if any, who controls the
Holders or the underwriter within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act against any losses, claims, damages,
liabilities or expenses (including all expenses reasonably incurred in
investigating, preparing for, or defending against, any claim whatsoever) to
which any of them may become subject under the Securities Act, the Exchange Act
or otherwise, arising from the Registration Statement, except insofar as the
same are caused by, or contained in, any information with respect to any Holder
furnished in writing to the Company by such Holder expressly for use therein.
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(b) Indemnification By the Holder. Each Holder shall indemnify and hold
harmless, to the full extent permitted by law, the Company and any underwriter,
their respective officers and directors and each person, if any, who controls
the Company or the underwriter within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, against all losses, claims,
damages, liabilities or expenses (including all expenses reasonably incurred in
investigating, preparing for or defending against any claim whatsoever) to which
they may become subject under the Securities Act, the Exchange Act or otherwise,
arising from information furnished with respect to the Holder in writing to the
Company by the Holder expressly for the use therein.
(c) Conduct of Indemnification Proceedings. If any proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that such failure
shall have materially prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in any
such proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (i) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (ii) the Indemnifying Party shall have failed promptly to
assume the defense of such proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such proceeding; or (iii) the
named parties to any such Proceeding (including any impleaded parties) include
both such Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by counsel that a conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and the reasonable fees and expenses of one
separate counsel for all Indemnified Parties in any matters related on a factual
basis shall be at the expense of the Indemnifying Party). The Indemnifying Party
shall not be liable for any settlement of any such Proceeding affected without
its written consent, which consent shall not be unreasonably withheld. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the
subject of such proceeding.
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All reasonable fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such proceeding in a manner not
inconsistent with this Section 9) shall be paid to the Indemnified Party, as
incurred, within ten (10) Business Days of written notice thereof to the
Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is not entitled to
indemnification hereunder, determined based upon the relative faults of the
parties.
(d) Contribution. If for any reason the indemnification provided for in the
preceding subsections (a) or (b) of this Section 9 is held by a court of
competent jurisdiction to be unavailable to an Indemnified Party with respect to
any loss, claim, damage, liability or expense referred to therein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party thereunder,
shall contribute to the amount paid or payable by the Indemnified Party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnified Party and the Indemnifying Party, but also the relative fault of the
Indemnified Party and the Indemnifying Party, as well as any other relevant
equitable considerations.
10. Company Covenant. The Company covenants that it shall file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder so long as any Holder owns
any Registrable Securities, but in no event longer than two (2) years; provided,
however, the Company may delay any such filing but only pursuant to Rule 12b-25
under the Exchange Act and shall take such further reasonable action as any
Holder may reasonably request (including, without limitation, promptly obtaining
any required legal opinions from Company counsel necessary to effect the sale of
Registrable Securities under Rule 144 and paying the related fees and expenses
of such counsel), all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of any
Holder of Registrable Securities, the Company will deliver to such Holder a
written statement as to whether it has complied with such requirements.
11. Entire Agreement. The Transaction Documents constitute the entire
agreement of the parties with respect to the transactions contemplated hereby
and supersede all prior agreements and understandings with respect thereto,
whether written or oral.
12. No Waiver; Modifications in Writing. No failure or delay by a party in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. Except as otherwise expressly provided herein with
respect to any right of indemnification, the remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to any
party at law or in equity or otherwise. No waiver of or consent to any departure
by a party from any provision of this Agreement shall be effective unless signed
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in writing by the party entitled to the benefit thereof. No amendment,
modification or termination of any provision of this Agreement shall be
effective unless signed in writing by all parties. Any amendment, supplement or
modification of or to any provision of this Agreement, any waiver of any
provision of this Agreement, and any consent to any departure from the terms of
any provision of this Agreement, shall be effective only in the specific
instance and for the specific purpose for which made or given.
13. Notices. All notices, demands and other communications provided for
hereunder shall be in writing, shall be given by (a) registered or certified
mail, return receipt requested, (b) telecopy with electronic confirmation of
such transmission, (c) national courier service or (d) personal delivery and
shall be deemed delivered (a) three Business Days after deposit with the U.S.
Postal Service, (b) the date given by electronic or e-mail delivery, (c) on the
business day next following deposit with a courier service for overnight
delivery with written confirmation of such delivery or (d) upon personal
delivery, addressed to the parties, as follows:
If to the Company, to:
Vasomedical, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
E-Mail: XXxxxxxxxxx@xxxxxxxxxxx.xxx
with a copy to (which shall not constitute notice):
Xxxxx X. Xxxxxxxxx, Esq.
Xxxxxxx, Xxxxxxxxx & Xxxxxxxx, LLP
Suite 1313, 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
E-Mail: XXxxxxxxxx@xxxxxx.xxx
If to Kerns or Living Data, to:
Xxxxx Manufacturing Corp.
00-00 00xx Xxxxxx
Xxxx Xxxxxx Xxxx, XX 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
E-Mail: xxxxxxxx@xxxxxxxxx.xxx
with a copy to (which shall not constitute notice):
Xxxxxx X. Xxxxxx, Esq.
Xxxxxxx & Masyr, LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx XX 00000
Telecopy: (000)000-0000
E-Mail: xxxxxx@xxxxx.xxx
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or to such other address as any party shall designate in writing in compliance
with the provisions of this Section 13.
14. Execution in Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement. The parties
agree that they may rely on the facsimile signature of any party with respect to
this Agreement or any waiver, amendment, supplement or consent relating thereto,
with the same effect as if such signature was an original.
15. Binding Effect; Assignment. The rights and obligations of the parties
under this Agreement may not be assigned or otherwise transferred to any other
person or entity, without the prior written consent of the other parties hereto.
Except as expressly provided in this Agreement, this Agreement shall not be
construed so as to confer any right or benefit upon any person or entity other
than the parties to this Agreement and their respective successors and permitted
assigns. This Agreement shall be binding upon and shall inure to the benefit of
the Company, Xxxxx, Living Data and their respective permitted successors and
assigns.
16. Governing Law. This Agreement shall be deemed to be a contract made
under and shall be governed by and construed in accordance with the internal
laws of the State of New York without giving effect to the principles of
conflict of laws.
17. Consent to Jurisdiction and Service of Process. Any suit, action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby may be instituted in any federal court situated in the
Southern or Eastern Districts of New York or any state court of the State of New
York, in each case, in the Borough of Manhattan, City of New York, or Nassau
County in the State of New York, and each party agrees not to assert, by way of
motion, as a defense or otherwise, in any such suit, action or proceeding, any
claim that it is not subject personally to the jurisdiction of such court, that
the suit, action or proceeding is brought in an inconvenient forum, that the
venue of the suit, action or proceeding is improper or that this Agreement or
the subject matter hereof may not be enforced in or by such court. Each party
further irrevocably submits to the jurisdiction of such court in any such suit,
action or proceeding. Any and all service of process and any other notice in any
such suit, action or proceeding shall be effective against any party if given
personally or by registered or certified mail, return receipt requested if sent
to such party at the address for such party set forth herein, or by any other
means of mail that requires a signed receipt, postage fully prepaid, mailed to
such party as herein provided. Nothing herein contained shall be deemed to
affect the right of any party to serve process in any manner permitted by law or
to commence legal proceedings or otherwise proceed against any other party in
any other jurisdiction.
18. Waiver of Jury Trial. The parties hereto hereby irrevocably waive all
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Agreement or the transactions contemplated hereby.
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19. Severability of Provisions. Any provision hereof that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by law, the parties hereto waive any
provision of law that renders any such provision prohibited or unenforceable in
any respect.
20. Headings. The Article, Section and subsection headings used or
contained in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
VASOMEDICAL, INC.
By:/s/ Xxxx X. X. Xxx
-------------------------------
Name: Xxxx X. X. Xxx
Title: Chief Executive Officer
XXXXX MANUFACTURING CORP.
By:/s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: Chairman of the Board
LIVING DATA TECHNOLOGY
CORPORATION
By: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: Chairman of the Board
