REGISTRATION RIGHTS AGREEMENT
REGISTRATION
RIGHTS AGREEMENT (this "Agreement"), dated as of December 28,
2006,
by and between BIOMETRX, INC., a Delaware corporation (the "Company"), and
___________________________________, and
______________ (“Buyer”).
WHEREAS:
A.
In
connection with the Securities Purchase Agreement by and among the parties
hereto of even date herewith (the "Securities Purchase Agreement"), the Company
has agreed, upon the terms and subject to the conditions contained therein,
to
issue and sell to the Buyer the following:
(i)
Convertible debentures of the Company (the “Debentures”) issued pursuant to the
Securities Purchase Agreement, and
(ii)
Warrants in the amount described in the Securities Purchase
Agreement,
where
the
Debenture is convertible into shares of the Company's common stock, par value
$0.001
per
share (the "Common Stock"), upon the terms and subject to the limitations and
conditions set forth in the Debenture and where each of the Warrants is
exercisable into shares of Common Stock, each upon the terms and conditions
and
subject to the limitations and conditions set forth in the Warrants, all subject
to the terms and conditions of the Securities Purchase Agreement;
and
B.
To
induce the Buyer to execute and deliver the Securities Purchase Agreement,
the
Company has agreed to provide certain registration rights under the Securities
Act of 1933, as amended, and the rules and regulations thereunder, or any
similar successor statute (collectively, the "1933 Act"), and applicable state
securities laws;
NOW,
THEREFORE,
In
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and the Buyer hereby agree as
follows:
1.
DEFINITIONS.
a.
As
used in this Agreement, the following terms shall have the following
meanings:
(i)
"BUYER" means _______________ and any transferee or assignee who agrees to
become bound by the provisions of this Agreement in accordance with Section
9
hereof.
(ii)
“FILING DEADLINE,” for a given Registration statement, shall mean the date that
is thirty (30) days after the date of Closing of the Debenture for which such
registration is being effected.
(iii)
“REGISTRATION DEADLINE” shall mean the date that is one hundred ninety (90) days
after the date of Closing of the Debenture for which such registration is being
effected.
(iv)
“WARRANTS” means the warrants issued by the Company in conjunction with the
Debenture issued by the Company.
(v)
"REGISTER," "REGISTERED," and "REGISTRATION" refer to a registration effected
by
preparing and filing a Registration Statement or Statements in compliance with
the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule
providing for offering securities on a continuous basis ("RULE 415"), and the
declaration or ordering of effectiveness of such Registration Statement by
the
United States Securities and Exchange Commission (the "SEC").
(vi)
"REGISTRABLE SECURITIES," for a given Registration, means (a) the shares of
Common Stock (the “Conversion Shares”) issued or issuable upon full conversion
of the Debenture or otherwise pursuant to the Debenture for which such
Registration is being effected (including, without limitation, any shares issued
or issuable as “Payment Shares” or otherwise pursuant to the Securities Purchase
Agreement), and (b) any shares of Common Stock (the “Warrant Shares”) issued or
issuable upon exercise of or otherwise pursuant to the Warrant(s), and (c)
any
shares of capital stock issued or issuable as a dividend on or in exchange
for
or otherwise with respect to any of the foregoing, and (d) any other shares
of
common stock issued pursuant to the terms of the Securities Purchase Agreement,
the Debenture, the Warrants, this Registration Rights Agreement or any other
Transaction Document (as defined in the Securities Purchase Agreement) (in
each
case, without giving effect to any limitations on conversion set forth in the
Debenture or limitations on exercise set forth in the Warrant), and (e) any
securities issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event or in connection with any
anti-dilution provisions with respect to the foregoing.
(vii)
"REGISTRATION STATEMENT(S)" means a registration statement(s) of the Company
under the 0000 Xxx.
b.
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement.
2.
REGISTRATION.
a.
MANDATORY REGISTRATION.
Following the Closing of any Debenture pursuant to the Securities Purchase
Agreement, the Company shall prepare, and, on or prior to the applicable Filing
Deadline (as defined above) file with the SEC a Registration Statement on Form
SB-2 (or, if Form SB-2 is not then available, on such form of Registration
Statement as is then available to effect a registration of the Registrable
Securities, subject to the consent of the Buyer, which consent will not be
unreasonably withheld) covering the resale of the Registrable Securities which
Registration Statement, to the extent allowable under the 1933 Act and the
rules
and regulations promulgated thereunder (including Rule 416), shall state that
such Registration Statement also covers such indeterminate number of additional
shares of Common Stock as may become issuable upon conversion of or otherwise
pursuant to the Debenture and exercise of or otherwise pursuant to the Warrants
to prevent dilution resulting from stock splits, stock dividends or similar
transactions. The number of shares of Common Stock initially included in such
Registration Statement shall be no less than one and one-half (1.5) times the
aggregate number of Conversion Shares that are then issuable upon conversion
of
the Debenture or otherwise pursuant to the Debenture (based on the Conversion
Price [as defined in the Debenture] then in effect) plus the aggregate number
of
Warrant Shares that are then issuable upon exercise of or otherwise pursuant
to
the Warrants, without regard to any limitation on the Buyer's ability to convert
the Debenture or exercise the Warrants. The Company acknowledges that the number
of shares initially included in each Registration Statement represents a good
faith estimate of the maximum number of shares issuable upon conversion of
the
Debenture or otherwise pursuant to the Debenture and exercise of or otherwise
pursuant to the Warrants and shall be amended if not sufficient. Each
Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided to (and
subject to the approval of) the Buyer and its counsel prior to its filing or
other submission.
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b.
PIGGY-BACK REGISTRATIONS.
If at
any time prior to the expiration of the Registration Period (as hereinafter
defined) the Company shall determine to file with the SEC a Registration
Statement relating to an offering for its own account or the account of others
under the 1933 Act of any of its equity securities (other than on Form S-4
or
Form S-8 or their then equivalents relating to equity securities to be issued
solely in connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee benefit
plans), the Company shall send to Buyer written notice of such determination
and, if within fifteen (15) days after the effective date of such notice, the
Buyer shall so request in writing, the Company shall include in such
Registration Statement all or any part of the Registrable Securities the Buyer
requests to be registered, except that if, in connection with any underwritten
public offering for the account of the Company, the managing underwriter(s)
thereof shall impose a limitation on the number of shares of Common Stock which
may be included in the Registration Statement because, in such underwriter(s)'
judgment, marketing or other factors dictate such limitation is necessary to
facilitate public distribution, then the Company shall be obligated to include
in such Registration Statement only such limited portion of the Registrable
Securities with respect to which the Buyer has requested inclusion hereunder
as
the underwriter shall permit;
PROVIDED,
HOWEVER,
that
the Company shall not exclude any Registrable Securities unless the Company
has
first excluded all outstanding securities, the holders of which are not entitled
by contract to inclusion of such securities in such Registration Statement
or
are not entitled to pro rata inclusion with the Registrable Securities;
and
PROVIDED,
FURTHER, HOWEVER,
that,
after giving effect to the immediately preceding proviso, any exclusion of
Registrable Securities shall be made pro rata with holders of other securities
having the contractual right to include such securities in the Registration
Statement other than holders of securities entitled to inclusion of their
securities in such Registration Statement by reason of demand registration
rights. No right to registration of Registrable Securities under this Section
2(b) shall be construed to limit any registration required under Section 2(a)
hereof. If an offering in connection with which the Buyer is entitled to
registration under this Section 2(d) is an underwritten offering, then the
Buyer
shall, unless otherwise agreed by the Company, offer and sell such Registrable
Securities in an underwritten offering using the same underwriter or
underwriters and, subject to the provisions of this Agreement, on the same
terms
and conditions as other shares of Common Stock included in such underwritten
offering. Notwithstanding anything to the contrary set forth herein, the
registration rights of the Buyer pursuant to this Section 2(b) shall only be
available in the event the Company fails to timely file, obtain effectiveness
or
maintain effectiveness of any Registration Statement to be filed pursuant to
Section 2(a) in accordance with the terms of this Agreement.
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3.
OBLIGATIONS OF THE COMPANY.
In
connection with the registration of the Registrable Securities, the Company
shall have the following obligations:
a.
The
Company shall prepare promptly, and file with the SEC as soon as practicable
after the date of the Closing under the Securities Purchase Agreement (the
"CLOSING DATE") (but no later than the Filing Deadline), Registration Statements
with respect to the number of Registrable Securities provided in Section 2(a),
and thereafter use its best efforts to cause each such Registration Statement
relating to Registrable Securities to become effective as soon as possible
after
such filing, but in any event shall cause each such Registration Statement
relating to Registrable Securities to become effective no later than the
Registration Deadline, and shall keep the Registration Statement current and
effective pursuant to Rule 415 at all times until such date as is the earlier
of
(i) the date on which all of the Registrable Securities for such Registration
Statement have been sold and (ii) the date on which all of the Registrable
Securities for such Registration Statement (in the opinion of counsel to the
Buyer) may be immediately sold to the public without registration or restriction
(including without limitation as to volume by each holder thereof) under the
1933 Act (the "REGISTRATION PERIOD"), which Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein) shall
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the statements therein
not misleading.
b.
The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to each Registration Statements
and
the prospectus used in connection with the Registration Statements as may be
necessary to keep the Registration Statements current and effective at all
times
during the Registration Period, and, during such period, comply with the
provisions of the 1933 Act with respect to the disposition of all Registrable
Securities of the Company covered by the Registration Statements until such
time
as all of such Registrable Securities have been disposed of in accordance with
the intended methods of disposition by the seller or sellers thereof as set
forth in the Registration Statements. In the event that on any Trading Day
(as
defined in the Debenture) (the "REGISTRATION TRIGGER DATE") the number of shares
available under a Registration Statement filed pursuant to this Agreement is
insufficient to cover all of the Registrable Securities issued or issuable
upon
conversion of the Debenture or otherwise pursuant to the Debenture (based on
the
Conversion Price [as defined in the Debenture] then in effect), exercise of
or
otherwise pursuant to the Warrants, and otherwise issuable pursuant to the
Transaction Documents, in each case without giving effect to any limitations
on
the Buyer' ability to convert the Debenture, exercise the Warrants or otherwise
receive shares of Common Stock pursuant to the Transaction Documents, the
Company shall amend the Registration Statement, or file a new Registration
Statement (on the short form available therefore, if applicable), or both,
so as
to cover one and one-half (1.5) times the total number of Registrable Securities
so issued or issuable (without giving effect to any limitations on conversion
contained in the Debenture, limitations on exercise contained in the Warrants
or
limitations on conversion or exercise or other payment of shares contained
in
the Securities Purchase Agreement) as of the Registration Trigger Date, in
each
case, as soon as practicable, but in any event within twenty (20) days after
the
Registration Trigger Date (based on the Conversion Prices of the Debenture,
the
Exercise Prices of the Warrants, and other relevant factors on which the Company
reasonably elects to rely). The Company shall use its best efforts to cause
such
amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof, but in any event the Company shall
cause such amendment and/or new Registration Statement to become effective
within sixty (60) days of the Registration Trigger Date or as promptly as
practicable in the event the Company is required to increase its authorized
shares.
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c.
The
Company shall furnish to the Buyer and its legal counsel (i) promptly after
the
same is prepared and publicly distributed, filed with the SEC, or received
by
the Company, one copy of each Registration Statement and any amendment thereto,
each preliminary prospectus and prospectus and each amendment or supplement
thereto, and, in the case of the Registration Statement referred to in Section
2(a), each letter written by or on behalf of the Company to the SEC or the
staff
of the SEC, and each item of correspondence from the SEC or the staff of the
SEC, in each case relating to such Registration Statement (other than any
portion of any thereof which contains information for which the Company has
sought confidential treatment), and (ii) such number of copies of a prospectus,
including a preliminary prospectus, and all amendments and supplements thereto
and such other documents as the Buyer may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by the Buyer.
The
Company will immediately notify the Buyer by facsimile of the effectiveness
of
each Registration Statement or any post-effective amendment. The Company will
promptly respond to any and all comments received from the SEC, with a view
towards causing each Registration Statement or any amendment thereto to be
declared effective by the SEC as soon as practicable and shall file an
acceleration request as soon as practicable, but no later than three (3)
business days (the "ACCELERATION REQUEST DEADLINE"), following the resolution
or
clearance of all SEC comments or, if applicable, following notification by
the
SEC that any such Registration Statement or any amendment thereto will not
be
subject to review.
d.
The
Company shall use reasonable efforts to (i) register and qualify the Registrable
Securities covered by the Registration Statements under such other securities
or
"blue sky" laws of such jurisdictions in the United States as the Buyer shall
request, (ii) prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary
to
maintain such registrations and qualifications in effect at all times during
the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such
jurisdictions;
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e.
As
promptly as practicable after becoming aware of such event, the Company shall
notify the Buyer of the happening of any event, of which the Company has
knowledge, as a result of which the prospectus included in any 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, and use its best efforts promptly
to
prepare a supplement or amendment to any Registration Statement to correct
such
untrue statement or omission, and deliver such number of copies of such
supplement or amendment to the Buyer as the Buyer may reasonably request;
provided that, for not more than twenty (20) consecutive days (or a total of
not
more than sixty (60) days in any twelve (12) month period), the Company may
delay the disclosure of material non-public information concerning the Company
(as well as prospectus or Registration Statement updating) the disclosure of
which at the time is not, in the good faith opinion of the Company, in the
best
interests of the Company (an "ALLOWED DELAY"); provided, further, that the
Company shall promptly (i) notify the Buyer in writing of the existence of
(but
in no event, without the prior written consent of the Buyer, shall the Company
disclose to the Buyer any of the facts or circumstances regarding) material
non-public information giving rise to an Allowed Delay and (ii) advise the
Buyer
in writing to cease all sales under such Registration Statement until the end
of
the Allowed Delay, provided the above actions are consistent with the
requirements of the 1933 Act and/or 1934 Act or other applicable law. Upon
expiration of the Allowed Delay, the Company shall again be bound by the first
sentence of this Section 3(e) with respect to the information giving rise
thereto. Nothing herein relieves the obligations set forth in the Debenture
or
the Warrants relative to Failure Payments or payments of the Default Amount
pursuant to Events of Default.
f.
The
Company shall use its best efforts to prevent the issuance of any stop order
or
other suspension of effectiveness of any Registration Statement, and, if such
an
order is issued, to obtain the withdrawal of such order at the earliest possible
moment and to notify the Buyer who holds Registrable Securities being sold
(or,
in the event of an underwritten offering, the managing underwriters) of the
issuance of such order and the resolution thereof.
g.
The
Company shall permit a single firm of counsel designated by the Buyer to review
such Registration Statement and all amendments and supplements thereto (as
well
as all requests for acceleration or effectiveness thereof), at Buyer’s own cost,
a reasonable period of time prior to their filing with the SEC (not less than
three (3) business days but not more then five (5) business days) and not file
any document in a form to which such counsel reasonably objects and will not
request acceleration of such Registration Statement without prior notice to
such
counsel.
h.
The
Company shall hold in confidence and not make any disclosure of information
concerning the Buyer provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities laws, (ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction, or (iv) such information has
been made generally available to the public other than by disclosure in
violation of this or any other agreement. The Company agrees that it shall,
upon
learning that disclosure of such information concerning the Buyer is sought
in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to the Buyer prior to making such disclosure, and
allow the Buyer, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such
information.
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i.
The
Company shall use its best efforts to (i) cause all the Registrable Securities
covered by the Registration Statement to be listed on each national securities
exchange on which securities of the same class or series issued by the Company
are then listed, if any, if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (ii) to the extent the securities
of the same class or series are not then listed on a national securities
exchange, secure the designation and quotation, of all the Registrable
Securities covered by the Registration Statement on the NNM or, if not eligible
for the NNM on the Nasdaq Small Cap or, if not eligible for the Nasdaq Small
Cap, on the Over the Counter electronic bulletin board and, without limiting
the
generality of the foregoing, to arrange for at least two market makers to
register with the National Association of Securities Dealers, Inc. ("NASD")
as
such with respect to such Registrable Securities.
j.
The
Company shall provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the effective date of
the
Registration Statement.
k.
The
Company shall cooperate with the Buyer who holds Registrable Securities being
offered and the managing underwriter or underwriters, if any, to facilitate
the
timely preparation and delivery of certificates (not bearing any restrictive
legends) representing Registrable Securities to be offered pursuant to such
Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the managing underwriter or underwriters,
if
any, or the Buyer may reasonably request and registered in such names as the
managing underwriter or underwriters, if any, or the Buyer may request, and,
within three (3) business days after a Registration Statement which includes
Registrable Securities is ordered effective by the SEC, the Company shall
deliver, and shall cause legal counsel selected by the Company to deliver,
to
the transfer agent for the Registrable Securities (with copies to the Buyer)
an
appropriate instruction and an opinion of such counsel in the form required
by
the transfer agent in order to issue the Registrable Securities free of
restrictive legends.
l.
At the
request of the holders of a majority-in-interest of the Registrable Securities,
the Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and
any
prospectus used in connection with the Registration Statement as may be
necessary in order to change the plan of distribution set forth in such
Registration Statement.
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m.
The
Company shall not, and shall not agree to, allow the holders of any securities
of the Company to include any of their securities in any Registration Statement
under Section 2(a) hereof or any amendment or supplement thereto under Section
3(b) hereof without the consent of the holders of a majority-in-interest of
the
Registrable Securities, except for securities which have contractual piggyback
registration rights in effect at the time of the Initial Closing (as defined
in
the Securities Purchase Agreement). In addition, the Company shall not offer
any
securities for its own account or the account of others in any Registration
Statement under Section 2(a) hereof or any amendment or supplement thereto
under
Section 3(b) hereof without the consent of the holders of a majority-in-interest
of the Registrable Securities.
n.
The
Company shall take all other reasonable actions necessary to expedite and
facilitate disposition by the Buyer of Registrable Securities pursuant to a
Registration Statement.
o.
The
Company shall comply with all applicable laws related to a Registration
Statement and offering and sale of securities and all applicable rules and
regulations of governmental authorities in connection therewith (including
without limitation the 1933 Act and the 1934 Act and the rules and regulations
promulgated by the SEC).
p. Further
Registration Statements. Except for a registration statement filed on behalf
of
the Buyer pursuant to Section 2 of this Agreement, an underwritten public
offering, and except as set forth on Schedule 3(P) hereto, the Company will
not
file any registration statements or amend any already filed registration
statement, including but not limited to Forms S-8, with the Commission or with
state regulatory authorities without the consent of the Subscriber until the
expiration of the "Exclusion Period", which shall be defined as the sooner
of
(i) the date that the Registration Statement shall have been current and
available for use in connection with the resale of the Registrable Securities
for a period of 180 days, or (ii) until all the Shares and Warrant Shares have
been resold or transferred by the Subscribers pursuant to the Registration
Statement or are eligible for immediate unrestricted resale pursuant to Rule
144(k), without volume limitations. The Exclusion Period will be tolled during
the pendency of an Event of Default as defined in the Debenture or an Event
of
Default as defined in the Warrants.
q.
If
requested in writing by a Holder and if required of the Holder’s selling
registered broker-dealer by NASD (as defined below) in order to effect the
resale of the Registrable Securities by the Holder, the Company shall use
commercially reasonable efforts to effect a filing with respect to the public
offering contemplated by the Registration Statement (an “Issuer
Filing”)
with
the National Association of Securities Dealers, Inc. (“NASD”)
Corporate Financing Department pursuant to NASD Rule 2710(b)(10)(A)(i) within
five Trading Days of such request and pay the filing fee required by such Issuer
Filing. The Company shall use commercially reasonable efforts to pursue the
Issuer Filing until the NASD issues a letter confirming that it does not object
to the terms of the offering contemplated by the Registration
Statement.
4.
OBLIGATIONS OF THE BUYER.
In
connection with the registration of the Registrable Securities, the Buyer shall
have the following obligations:
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a.
It
shall be a condition precedent to the obligations of the Company to complete
the
registration pursuant to this Agreement with respect to the Registrable
Securities of the Buyer that the Buyer shall furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as
shall
be reasonably required to effect the registration of such Registrable Securities
and shall execute such documents in connection with such registration as the
Company may reasonably request. At least three (3) business days prior to the
first anticipated filing date of the Registration Statement, the Company shall
notify the Buyer of the information the Company requires from each the
Buyer.
b.
The
Buyer, by the Buyer's acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of the Registration Statements hereunder, unless
the Buyer has notified the Company in writing of the Buyer's election to exclude
all of the Buyer's Registrable Securities from the Registration
Statements.
c.
In the
event of an underwritten offering pursuant to Section 2(b) in which any
Registrable Securities are to be included, the Buyer agrees to enter into and
perform the Buyer's obligations under an underwriting agreement, in usual and
customary form, including, without limitation, customary indemnification and
contribution obligations, with the managing underwriter of such offering and
take such other actions as are reasonably required in order to expedite or
facilitate the disposition of the Registrable Securities, unless the Buyer
has
notified the Company in writing of the Buyer's election to exclude all of the
Buyer's Registrable Securities from such Registration Statement.
d.
The
Buyer agrees that, upon receipt of any notice from the Company of the happening
of any event of the kind described in Section 3(f) or 3(g), the Buyer will
immediately discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until the Buyer's
receipt of the copies of the supplemented or amended prospectus contemplated
by
Section 3(f) or 3(g) and, if so directed by the Company, the Buyer shall deliver
to the Company (at the expense of the Company) or destroy (and deliver to the
Company a certificate of destruction) all copies in the Buyer's possession,
of
the prospectus covering such Registrable Securities current at the time of
receipt of such notice.
e.
No
Buyer may participate in any underwritten registration hereunder unless the
Buyer (i) agrees to sell the Buyer's Registrable Securities on the basis
provided in any underwriting arrangements in usual and customary form entered
into by the Company, (ii) completes and executes all questionnaires, powers
of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements, and (iii) agrees
to
pay its pro rata share of all underwriting discounts and commissions and any
expenses in excess of those payable by the Company pursuant to Section 5
below.
5.
EXPENSES OF REGISTRATION.
All
reasonable expenses, other than underwriting discounts and commissions, incurred
in connection with registrations, filings or qualifications pursuant to Sections
2 and 3, including, without limitation, all registration, listing and
qualification fees, printers and accounting fees, the fees and disbursements
of
counsel for the Company shall be borne by the Company.
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6.
INDEMNIFICATION.
In the
event any Registrable Securities are included in a Registration Statement under
this Agreement:
a.
To the
extent permitted by law, the Company will indemnify, hold harmless and defend
(i) the Buyer, (ii) the directors, officers, partners, managers, members,
employees, agents and each person who controls any Buyer within the meaning
of
the 1933 Act or the Securities Exchange Act of 1934, as amended (the "1934
ACT"), if any, (iii) any underwriter (as defined in the 0000 Xxx) for the Buyer
in connection with an underwritten offering pursuant to Section 2(b) hereof,
and
(iv) the directors, officers, partners, employees and each person who controls
any such underwriter within the meaning of the 1933 Act or the 1934 Act, if
any
(each, an "INDEMNIFIED PERSON"), against any joint or several losses, claims,
damages, liabilities or expenses (collectively, together with actions,
proceedings or inquiries by any regulatory or self-regulatory organization,
whether commenced or threatened, in respect thereof, "CLAIMS") to which any
of
them may become subject insofar as such Claims arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a material fact in
a
Registration Statement or the omission or alleged omission to state therein
a
material fact required to be stated or necessary to make the statements therein
not misleading; (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading; or (iii) any violation or alleged violation by the Company
of the 1933 Act, the 1934 Act, any other law, including, without limitation,
any
state securities law, or any rule or regulation thereunder relating to the
offer
or sale of the Registrable Securities (the matters in the foregoing clauses
(i)
through (iii) being, collectively, "VIOLATIONS"). Subject to the restrictions
set forth in Section 6(c) with respect to the number of legal counsel, the
Company shall reimburse the Indemnified Person, promptly as such expenses are
incurred and are due and payable, for any reasonable legal fees or other
reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i) shall
not apply to a Claim arising out of or based upon a Violation which occurs
in
reliance upon and in conformity with information furnished in writing to the
Company by any Indemnified Person or underwriter for such Indemnified Person
expressly for use in connection with the preparation of such Registration
Statement or any such amendment thereof or supplement thereto; (ii) shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld; and (iii) with respect to any preliminary prospectus,
shall not inure to the benefit of any Indemnified Person if the untrue statement
or omission of material fact contained in the preliminary prospectus was
corrected on a timely basis in the prospectus, as then amended or supplemented,
such corrected prospectus was timely made available by the Company pursuant
to
Section 3(c) hereof, and the Indemnified Person was promptly advised in writing
not to use the incorrect prospectus prior to the use giving rise to a Violation
and such Indemnified Person, notwithstanding such advice, used it. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer
of
the Registrable Securities by the Buyer pursuant to Section 9.
10
b.
[Intentionally Omitted].
c.
Promptly after receipt by an Indemnified Person under this Section 6 of notice
of the commencement of any action (including any governmental action), such
Indemnified Person shall, if Claim in respect thereof is to be made against
any
the Company under this Section 6, deliver to the Company a written notice of
the
commencement thereof, and the Company shall have the right to participate in,
and, to the extent the Company so desires, to assume control of the defense
thereof with counsel mutually satisfactory to the Company and the Indemnified
Person, as the case may be.
PROVIDED,
HOWEVER,
that an
Indemnified Person shall have the right to retain its own counsel with the
fees
and expenses to be paid by the Company, if, in the reasonable opinion of counsel
retained by the Company, the representation by such counsel of the Indemnified
Person and the Company would be inappropriate due to actual or potential
differing interests between such Indemnified Person and any other party
represented by such counsel in such proceeding. The Company shall pay for only
one separate legal counsel for the Indemnified Persons, and such legal counsel
shall be selected by Buyer, if the Buyer is entitled to indemnification
hereunder. The failure to deliver written notice to the Company within a
reasonable time of the commencement of any such action shall not relieve the
Company of any liability to the Indemnified Person under this Section 6, except
to the extent that the Company is actually prejudiced in its ability to defend
such action. The indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as such expense, loss, damage or liability is incurred and is due
and payable.
d.
To the
extent permitted by law, the Buyer will indemnify, hold harmless and defend
(i)
the Company, and (ii) the directors, officers, partners, managers, members,
employees, or agents of the Company, if any (each, a "COMPANY INDEMNIFIED
PERSON"), against any joint or several losses, claims, damages, liabilities
or
expenses (collectively, together with actions, proceedings or inquiries by
any
regulatory or self-regulatory organization, whether commenced or threatened,
in
respect thereof, "CLAIMS") to which any of them may become subject insofar
as
such Claims arise out of or are based upon a Claim arising out of or based
upon
any violation or alleged violation by the Company of the 1933 Act, the 1934
Act,
any other law, including, without limitation, any state securities law, or
any
rule or regulation thereunder relating to the offer or sale of the Registrable
Securities, which occurs due to the inclusion by the Company in a Registration
Statement of false or misleading information about the Buyer, where such
information was furnished in writing to the Company by the Buyer for the purpose
of inclusion in such Registration Statement.
7.
CONTRIBUTION.
To the
extent any indemnification by the Company is prohibited or limited by law,
the
Company agrees to make the maximum contribution with respect to any amounts
for
which it would otherwise be liable under Section 6 to the fullest extent
permitted by law.
11
8.
REPORTS UNDER THE 1934 ACT.
With a
view to making available to the Buyer the benefits of Rule 144 promulgated
under
the 1933 Act or any other similar rule or regulation of the SEC that may at
any
time permit the Buyer to sell securities of the Company to the public without
registration ("RULE 144"), the Company agrees to:
a.
make
and keep public information available, as those terms are understood and defined
in Rule 144;
b.
file
with the SEC in a timely manner all reports and other documents required of
the
Company under the 1933 Act and the 1934 Act so long as the Company remains
subject to such requirements (it being understood that nothing herein shall
limit the Company's obligations under Section 4(c) of the Securities Purchase
Agreement) and the filing of such reports and other documents is required for
the applicable provisions of Rule 144; and
c.
furnish to the Buyer so long as the Buyer owns Registrable Securities, promptly
upon request, (i) a written statement by the Company that it has complied with
the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii)
a
copy of the most recent annual or quarterly report of the Company and such
other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit the Buyers to sell such securities
pursuant to Rule 144 without registration.
9.
ASSIGNMENT OF REGISTRATION RIGHTS.
The
rights under this Agreement shall be automatically assignable by the Buyers
to
any transferee of all or any portion of Registrable Securities if: (i) the
Buyer
agrees in writing with the transferee or assignee to assign such rights, and
a
copy of such agreement is furnished to the Company within a reasonable time
after such assignment, (ii) the Company is, within a reasonable time after
such
transfer or assignment, furnished with written notice of (a) the name and
address of such transferee or assignee, and (b) the securities with respect
to
which such registration rights are being transferred or assigned, (iii)
following such transfer or assignment, the further disposition of such
securities by the transferee or assignee is restricted under the 1933 Act and
applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence, the
transferee or assignee agrees in writing with the Company to be bound by all
of
the provisions contained herein, and (v) such transfer shall have been made
in
accordance with the applicable requirements of the Securities Purchase
Agreement. In the event that the Buyer transfers all or any portion of its
Registrable Securities pursuant to this Section, the Company shall have at
least
ten (10) days to file any amendments or supplements necessary to keep the
Registration Statement current and effective pursuant to Rule 415, and the
commencement date of any Event of Failure or Event of Default under the
Debenture or the Warrants caused thereby will be extended by ten (10)
days.
10.
AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof may
be
waived (either generally or in a particular instance and either retroactively
or
prospectively), only with written consent of the Company, the Buyer (to the
extent such Buyer still owns Registrable Securities) and Buyers who hold a
majority interest of the Registrable Securities. Any amendment or waiver
effected in accordance with this Section 10 shall be binding upon the Buyer
and
the Company.
12
11.
MISCELLANEOUS.
a.
A
person or entity is deemed to be a holder of Registrable Securities whenever
such person or entity owns of record such Registrable Securities. If the Company
receives conflicting instructions, notices or elections from two or more persons
or entities with respect to the same Registrable Securities, the Company shall
act upon the basis of instructions, notice or election received from the
registered owner of such Registrable Securities.
b.
Any
notices required or permitted to be given under the terms hereof shall be sent
by certified or registered mail (return receipt requested) or delivered
personally or by courier (including a recognized overnight delivery service)
or
by facsimile and shall be effective five days after being placed in the mail,
if
mailed by regular United States mail, or upon receipt, if delivered personally
or by courier (including a recognized overnight delivery service) or by
facsimile, in each case addressed to a party. The addresses for such
communications shall be:
If
to the
Company: To the address set forth immediately below such
Company’s
name on the signature pages hereto.
With
copy
to:
Xxxx
X.
Xxxxxxxxx, Esq.
Xxxxxx
& Xxxxxxxxx LLP
000
Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx
Xxxx, XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If
to a
Buyer: To the address set forth immediately below such Buyer's name on the
signature pages hereto.
Each
party shall provide notice to the other party of any change in
address.
c.
Failure of any party to exercise any right or remedy under this Agreement or
otherwise, or delay by a party in exercising such right or remedy, shall not
operate as a waiver thereof.
d.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York. Any controversy or claim arising out of or
related to this Agreement or the breach thereof, shall be settled by binding
arbitration in New York, NY in accordance with the Expedited Procedures (Rules
53-57) of the Commercial Arbitration Rules of the American Arbitration
Association (“AAA”). A proceeding shall be commenced upon written demand by
Company or the Buyer to the other. The arbitrator(s) shall enter a judgment
by
default against any party, which fails or refuses to appear in any properly
noticed arbitration proceeding. The proceeding shall be conducted by one (1)
arbitrator, unless the amount alleged to be in dispute exceeds two hundred
fifty
thousand dollars ($250,000), in which case three (3) arbitrators shall preside.
The arbitrator(s) will be chosen by the parties from a list provided by the
AAA,
and if they are unable to agree within ten (10) days, the AAA shall select
the
arbitrator(s). The arbitrators must be experts in securities law and financial
transactions. The arbitrators shall assess costs and expenses of the
arbitration, including all attorneys’ and experts’ fees, as the arbitrators
believe is appropriate in light of the merits of the parties’ respective
positions in the issues in dispute. Each party submits irrevocably to the
jurisdiction of any state court sitting in New York, NY or to the United States
District Court sitting in New York for purposes of enforcement of any discovery
order, judgment or award in connection with such arbitration. The award of
the
arbitrator(s) shall be final and binding upon the parties and may be enforced
in
any court having jurisdiction. The arbitration shall be held in such place
as
set by the arbitrator(s) in accordance with Rule 55. With respect to any
arbitration proceeding in accordance with this section, the prevailing party’s
reasonable attorney’s fees and expenses shall be borne by the non-prevailing
party.
13
Although
the parties, as expressed above, agree that all claims, including claims that
are equitable in nature, for example specific performance, shall initially
be
prosecuted in the binding arbitration procedure outlined above, if the
arbitration panel dismisses or otherwise fails to entertain any or all of the
equitable claims asserted by reason of the fact that it lacks jurisdiction,
power and/or authority to consider such claims and/or direct the remedy
requested, then, in only that event, will the parties have the right to initiate
litigation respecting such equitable claims or remedies. The forum for such
equitable relief shall be in either a state or federal court sitting in New
York, NY. Each party waives any right to a trial by jury, assuming such right
exists in an equitable proceeding, and irrevocably submits to the jurisdiction
of said New York court. New York law shall govern both the proceeding as well
as
the interpretation and construction of this Agreement and the transaction as
a
whole.
e.
This
Agreement and the Securities Purchase Agreement (including all schedules and
exhibits thereto) constitute the entire agreement among the parties hereto
with
respect to the subject matter hereof and thereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred
to
herein and therein. This Agreement and the Securities Purchase Agreement
supersede all prior agreements and understandings among the parties hereto
with
respect to the subject matter hereof and thereof.
f.
Subject to the requirements of Section 9 hereof, this Agreement shall inure
to
the benefit of and be binding upon the successors and assigns of each of the
parties hereto.
g.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
h.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original but all of which shall constitute one and the same agreement.
This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
14
i.
Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
j.
Except
as otherwise provided herein, all consents and other determinations to be made
by the Buyer pursuant to this Agreement shall be made by Buyers holding a
majority of the Registrable Securities, determined as if the all of the
Debenture and Warrants then outstanding have been converted or exercised into
for Registrable Securities.
k.
The
Company acknowledges that a breach by it of its obligations hereunder will
cause
irreparable harm to the Buyer by vitiating the intent and purpose of the
transactions contemplated hereby. Accordingly, the Company acknowledges that
the
remedy at law for breach of its obligations hereunder will be inadequate and
agrees, in the event of a breach or threatened breach by the Company of any
of
the provisions hereunder, that the Buyer shall be entitled, in addition to
all
other available remedies in law or in equity, to an injunction or injunctions
to
prevent or cure breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof, without the necessity of showing
economic loss and without any bond or other security being
required.
l.
The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent, and no rules of strict construction
will
be applied against any party.
m.
In the
event that any provision of this Agreement is invalid or unenforceable under
any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof
which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.
n.
The
initial number of Registrable Securities included in any Registration Statement
and each increase to the number of Registrable Securities included therein
shall
be allocated pro rata among the Buyers based on the number of Registrable
Securities held by the Buyer at the time of such establishment or increase,
as
the case may be. In the event an Buyer shall sell or otherwise transfer any
of
such holder's Registrable Securities, each transferee shall be allocated a
pro
rata portion of the number of Registrable Securities included in a Registration
Statement for such transferor. Any shares of Common Stock included on a
Registration Statement and which remain allocated to any person or entity which
does not hold any Registrable Securities shall be allocated to the remaining
Buyers, pro rata based on the number of shares of Registrable Securities then
held by the Buyers. For the avoidance of doubt, the number of Registrable
Securities held by a Buyer shall be determined as if all the Debenture and
Warrants then outstanding and held by a Buyer were converted into or exercised
for Registrable Securities, without regard to any limitation on the Buyer's
ability to convert the Debenture or exercise the Warrants.
15
o.
There
shall be no oral modifications or amendments to this Agreement. This Agreement
may be modified or amended only in writing.
IN
WITNESS WHEREOF, the undersigned Buyer and the Company have caused this
Agreement to be duly executed as of the 28th
day of
December, 2006.
|
COMPANY:
BIOMETRX,
INC.
By:
________________________
Xxxx
Xxxxxx, CEO
ADDRESS:
000
Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
Phone:
000-000-0000
Fax:
516-937-2880Medcom
|
BUYER:
By:
______________________
_________,
____________
ADDRESS:
__________________________
__________________________
Telephone:
___________
Fax:
________________
|
16
