Exhibit 10.24
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of March 19,
1998, by and among Certified Diabetic Services, Inc., a Delaware corporation,
with headquarters located at 0000 Xxxxxxxxx Xxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxx
00000 (the "Company"), and the undersigned buyers (each, a "Buyer" and
collectively, the "Buyers").
WHEREAS:
A. In connection with the Securities Purchase Agreement by and among
the parties of even date herewith (the "Securities Purchase Agreement"), the
Company has agreed, upon the terms and subject to the conditions of the
Securities Purchase Agreement, to issue and sell to the Buyers shares of the
Company's Series A Convertible Preferred Stock, par value $.01 per share (the
"Preferred Shares"), which will be convertible into shares of the Company's
common shares, par value $.01 per share (the "Common Stock") (as converted, the
"Conversion Shares") in accordance with the terms of the Company's Certificate
of Designation of the Series A Convertible Preferred Stock (the "Certificate of
Designation"), and warrants (the "Warrants") to purchase shares of Common Stock
(the "Warrant Shares"); and
B. To induce the Buyers 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
buyers hereby agree as follows:
1. DEFINITIONS.
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As used in this Agreement, the following terms shall have the
following meanings:
a. "Investor" means a Buyer and any transferee or assignee
thereof to whom a Buyer assigns its rights under this Agreement and who agrees
to become bound by the provisions of this Agreement in accordance with
Section 9.
b. "Person" means a corporation, a limited liability company,
an association, a partnership, an organization, a business, a trust, an
individual, a governmental or political subdivision thereof or a governmental
agency.
c. "Register," "registered," and "registration" refer to a
registration effected by preparing and filing one or more Registration
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(s) by the United States
Securities and Exchange Commission (the "SEC").
d. "Registrable Securities" means the Conversion Shares issued
or issuable upon conversion of the Preferred Shares and the Warrant Shares
issued or issuable upon exercise of the Warrants and any shares of capital stock
issued or issuable with respect to the Conversion Shares or the Warrant Shares
as a result of any stock split, stock dividend, recapitalization, exchange,
combination, merger, consolidation, distribution or similar event or otherwise.
e. "Registration Statement" means a registration statement of
the Company filed under the 1933 Act.
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement.
2. REGISTRATION.
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a. Mandatory Registration. The Company shall prepare, and, on
or prior to 45 days after the date of issuance of the Preferred Shares and
Warrants, file with the SEC a Registration Statement or Registration Statements
(as is necessary) on Form S-1, covering the resale of all of the Registrable
Securities, which Registration Statement(s) shall state that, in accordance with
Rule 416 promulgated under the 1933 Act, such Registration Statement(s) also
covers such intermediate number of additional shares of Common Stock as may
become issuable upon conversion of the Preferred Shares and upon exercise of the
Warrants (i) to prevent dilution resulting from stock splits, stock dividends or
similar transactions and (ii) by reason of changes in the Conversion Price or
Conversion Rate of the Preferred Shares and the Exercise Price of the Warrants
in accordance with the terms thereof. Such Registration Statement shall
initially register for resale at least such number of shares of Common Stock
equal to the number of relevant Conversion Shares and Warrant Shares, subject to
adjustment as provided in Section 3(b). Such registered shares of Common Stock
shall be allocated among the Investors pro rata based on the total number of
Registrable Securities issued or issuable as of each date that a Registration
Statement, as amended, relating to the resale of the Registrable Securities is
declared effective by the SEC. The Company shall use its best efforts to have
the Registration Statement(s) declared effective by the SEC as soon as
practicable, but in no event later than 120 days after the issuance of the
Preferred Shares and Warrants. Neither the Company nor any other holder of the
Company's securities who has registration rights (other than the Investors and
their assignees or transferees) may include its securities in any registration
effected pursuant to this Section 2(a).
b. Counsel and Investment Bankers. Subject to Section 5, in
connection with any offering pursuant to Section 2, the Investors shall have the
right to select one legal counsel and an investment banker or bankers and
manager or managers to administer their interest in the offering, which
investment banker or bankers or manager or managers shall be reasonably
satisfactory to the Company. The Company shall reasonably cooperate with any
such counsel and investment bankers.
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c. Piggy-Back Registrations. If a Registration Statement in
compliance with this Agreement is not effective, and prior to the expiration of
the Registration Period (as hereinafter defined), the Company proposes 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 securities
(other than on Form S-4 or Form S-8 or their then equivalents relating to
securities to be issued solely in connection with any acquisition of any entity
or business or to securities issuable in connection with stock option or other
employee benefit plans), the Company shall promptly send to each Investor who is
entitled to registration rights under this Section 2(c), at least twenty (20)
days prior to the anticipated date of filing, written notice of the Company's
intention to file a Registration Statement and of such Investor's rights under
this Section 2(c) and, if within twenty (20) days after receipt of such notice,
such Investor shall so request in writing, the Company shall include in such
Registration Statement the Registrable Securities such Investor requests to be
registered, subject to the priorities set forth in Section 2(d). No right to
registration of Registrable Securities under this Section 2(c) shall be
construed to limit any registration required under Section 2(a). The obligations
of the Company under this Section 2(c) may be waived by Investors holding a
majority of the Registrable Securities. If an offering in connection with which
an Investor is entitled to registration under this Section 2(c) is an
underwritten offering, then each Investor whose Registrable Securities are
included in such Registration Statement shall unless otherwise agreed by the
Company, offer and sell such Registrable Securities in an underwritten offering
using the same underwriter or underwriters and, subject to the provisions of
this Agreement, on the same terms and conditions as other shares of Common Stock
included in such underwritten offering.
d. Priority in Piggy-Back Registration Rights in Connection
with Registrations for Company Account. If the registration referred to in
Section 2(c) is to be an underwritten public offering and the managing
underwriter(s) advise the Company in writing, that in their reasonable good
faith opinion, marketing or other factors dictate that a limitation on the
number of shares of Common Stock which may be included in the Registration
Statement (which may include a total "cut-back" of all Registrable Securities)
is necessary to facilitate and not adversely affect the proposed offering, then
the Company shall include in such registration: (1) first, all securities the
Company proposes to sell for its own account, (2) second, up to the full number
of securities proposed to be registered for the account of the holders of
securities entitled to inclusion of their securities in the Registration
Statement by reason of demand registration rights, and (3) third, the securities
requested to be registered by the Investors and other holders of securities
entitled to participate in the registration, as of the date hereof, drawn from
them pro rata based on the number each has requested to be included in such
registration.
e. Intentionally Omitted.
f. Liquidated Damages. If pursuant to Section 2(a) a
Registration Statement is not (i) filed with the SEC on or prior to 45 days
after the date of issuance of the Preferred Shares and the Warrants or (ii)
declared effective within 120 days after the date of issuance of the Preferred
Shares and Warrants (each a "Registration Default"), the Company agrees to pay
to each Investor liquidated damages ("Liquidated Damages") in an amount equal to
two percent (2%) of the stated value of the Preferred Shares held by such
Investor per month. If pursuant to this Section 2(a) the Registration Statement
is not declared effective within 150 days after the
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date of issuance of the Preferred Shares and Warrants, the amount of Liquidated
Damages to be paid by the Company to each Investor shall increase to four
percent (4%) of the stated value of the Preferred Shares held by such Investor
per month. All accrued Liquidated Damages shall be paid to the affected
Investors by the Company, at its option, by wire transfer of immediately
available funds or by issuing that number of shares of Common Stock which has in
the aggregate a Fair Market Value equal to the amount of Liquidated Damages. For
purposes of this Section 2(f), "Fair Market Value" shall mean the average
closing bid price of the Common Stock for the five (5) consecutive trading days
ending on the date of the Registration Default. As of the date of the cure of
all Registration Defaults relating to any particular Registrable Securities, the
accrual of Liquidated Damages with respect to such Registrable Securities will
cease. Notwithstanding the foregoing, in the event that at any time the Company
would be required to pay both Liquidated Damages under this Section 2(f) and
liquidated damages under Section 4(h)(ii) of the Securities Purchase Agreement
(the "Listing Liquidated Damages"), the Company shall only be required to pay
the greater of (x) the Liquidated Damages and (y) the Listing Liquidated
Damages; provided that, if, at such time, the Liquidated Damages equal the
Listing Liquidated Damages, then the Company shall only be required to pay
either the Liquidated Damages or the Listing Liquidated Damages.
3. RELATED OBLIGATIONS.
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Whenever an Investor has requested that any Registrable Securities be
registered pursuant to Section 2(c) or at such time as the Company is obligated
to file a Registration Statement with the SEC pursuant to Section 2(a), the
Company will use its best efforts to effect the registration of the Registrable
Securities in accordance with the intended method of disposition thereof and,
pursuant thereto, the Company shall have the following obligations:
a. The Company shall promptly prepare and file with the SEC a
Registration Statement with respect to the Registrable Securities on or prior to
the forty-fifth (45th) day after the date of issuance of the Preferred Shares
and Warrants for the registration of Registrable Securities pursuant to Section
2(a) and use its best efforts to cause such Registration Statement relating to
the Registrable Securities to become effective as soon as possible after such
filing (but in no event later than 120 days after the issuance of the Preferred
Shares and Warrants for the registration of Registrable Securities pursuant to
Section 2(a)), and keep such Registration Statement effective pursuant to Rule
415 at all times until the earlier of (i) the date as of which the Investors may
sell all of the Registrable Securities without restriction pursuant to Rule
144(k) promulgated under the 1934, (ii) the date on which (A) the Investors
shall have sold all the Registrable Securities and (B) none of the Preferred
Shares and Warrants is outstanding or (iii) the third anniversary of the date of
issuance of the Preferred Shares and the Warrants (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, in light of the circumstances in which
they were made, not misleading.
b. Subject to Section 3(f), the Company shall prepare and file
with the SEC such amendments (including post-effective amendments) and
supplements to a Registration
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Statement and the prospectus forming a part of such Registration Statement,
which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933
Act, as may be necessary to keep such Registration Statement 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 such Registration Statement until such time
as such Registrable Securities shall have been disposed of in accordance with
the intended methods of disposition by the seller or sellers thereof as set
forth in such Registration Statement. In the event the number of shares
available under a Registration Statement filed pursuant to this Agreement is
insufficient to cover all of the Registrable Securities, the Company shall amend
such Registration Statement, or file a new Registration Statement (on the short
form available therefor, if applicable), or both, so as to cover all of the
Registrable Securities, in each case, as soon as practicable, but in any event
within fifteen (15) days after the necessity therefor arises (based on the
market price of the Common Stock 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. For purposes of the foregoing
provision, the number of shares available under a Registration Statement shall
be deemed "insufficient to cover all of the Registrable Securities" if at any
time the number of Registrable Securities issued or issuable upon conversion of
the Preferred Shares is greater than the quotient determined by dividing (i) the
number of shares of Common Stock available for resale under such Registration
Statement by (ii) 1.5. For purposes of the calculation set forth in the
foregoing sentence, any restrictions on the convertibility of the Preferred
Shares and the exercise of the Warrants shall be disregarded and such
calculation shall assume that the Preferred Shares are then convertible into
shares of Common Stock at the then prevailing Conversion Rate (as defined in the
Certificate of Designation) and the Warrants are then exercisable into shares of
Common Stock at the prevailing Exercise Price (as defined in the certificate
representing the Warrants). If while the Registration Statement is required to
be effective pursuant to the terms of this Agreement, the effectiveness of the
Registration Statement lapses for any reason (including, without limitation, the
issuance of a stop order) or is unavailable to any Investor for sale of the
Registrable Securities in accordance with the terms of this Agreement (a "Lapse
Period"), such Lapse Period continues for any ten trading days (not including
any days during a Grace Period (as defined in Section 3(f)), and the cause of
such lapse or unavailability is not due to factors solely within the control of
the Investors, then the Company shall pay to each Investor liquidated damages in
an amount equal to four percent (4%) of the stated value of the Preferred Shares
held by such Investor per month until such time as such Lapse Period ceases. The
Mandatory Conversion Date (as defined in the Certificate of Designation) shall
be extended by one and one-half times the aggregate number of days of all Lapse
Periods.
c. The Company shall furnish to each Investor whose
Registrable Securities are included in any Registration Statement and its legal
counsel without charge (i) promptly after the same is prepared and filed with
the SEC at least one copy of such Registration Statement and any amendment(s)
thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits, the prospectus included in
such Registration Statement (including each preliminary prospectus) and, with
regard to such Registration Statement(s), any correspondence by or on behalf of
the Company to the SEC or the staff of the SEC and any correspondence from the
SEC or the staff of the SEC to the Company or its
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representatives, (ii) upon the effectiveness of any Registration Statement, ten
(10) copies of the prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies as such
Investor may reasonably request) and (iii) such other documents, including any
preliminary prospectus, as such Investor may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Investor.
d. The Company shall use reasonable efforts to (i) register
and qualify the Registrable Securities covered by a Registration Statement under
such other securities or "blue sky" laws of such jurisdictions in the United
States as any Investor reasonably requests, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify
each Investor who holds Registrable Securities of the receipt by the Company of
any notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under the securities
or "blue sky" laws of any jurisdiction in the United States or its receipt of
actual notice of the initiation or threatening of any proceeding for such
purpose.
e. In the event Investors who hold a majority of the
Registrable Securities being offered in the offering select underwriters for the
offering, the Company shall enter into and perform its obligations under an
underwriting agreement in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriters of such offering; provided, that the Company shall not be obligated
to pay any fees, disbursements or expenses such underwriters incur in connection
with such offering.
f. As promptly as practicable after becoming aware of such
event, the Company shall notify each Investor in writing of the happening of any
event as a result of which the prospectus included in a Registration Statement,
as then in effect, includes an untrue statement of a material fact or omission
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and deliver
ten (10) copies of such supplement or amendment to each Investor (or such other
number of copies as such Investor may reasonably request). The Company shall
also promptly notify each Investor in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to each Investor by
facsimile on the same day of such effectiveness and by overnight mail), (ii) of
any request by the SEC for amendments or supplements to a Registration Statement
or related prospectus or related information, and (iii) of the Company's
reasonable determination that a post-effective amendment to a Registration
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Statement would be appropriate. Notwithstanding anything to the contrary in this
Section 3(f), at any time after the Registration Statement has been declared
effective, the Company may delay the disclosure of material non-public
information concerning the Company if the Board of Directors of the Company
determines in good faith that in its reasonable business judgment such
disclosure would interfere in any material respect with any financing (other
than an underwritten secondary offering), acquisition, corporate reorganization
or other transaction or development involving the Company that in the reasonable
good faith business judgment of such board is a transaction or development that
is or would be material to the Company and, in the opinion of counsel to the
Company, such disclosure is not otherwise required (a "Grace Period"); provided,
that the Company shall promptly (i) notify the Investors in writing of the
existence of material non-public information giving rise to a Grace Period and
the date on which the Grace Period will begin, and (ii) notify the Investors in
writing of the date on which the Grace Period ends; and, provided further, that,
prior to the one year anniversary of the date of issuance of the Preferred
Shares and Warrants (the "First Extension Date"), the Grace Period shall not
exceed twenty-five (25) calendar days in the aggregate, and (C) there has been
no Underwriting Lock-Up Period (as defined in the Securities Purchase Agreement)
in the 20 day period prior to the Company's notice to the Investors of a Grace
Period. In the event that any Grace Period exceeds the 25-day period described
in the preceding sentence prior to the First Extension Date, the Company shall
be required to pay to each Investor liquidated damages in the amount of four
percent (4%) of the stated value of the Preferred Shares held by such Investor
per month ("Grace Period Liquidated Damages"); provided that, (x) on and after
the First Extension Date and prior to the two year anniversary of the date of
issuance of the Preferred Shares and Warrants (the "Second Extension Date"),
Grace Period Liquidated Damages shall only be payable in the event that any
Grace Period exceeds forty-five (45) calendar days in the aggregate during any
consecutive 365-day period (which forty-five days shall include Grace Periods
which occur prior to the First Extension Date to the extent such Grace Periods
are included within the applicable consecutive 365-day period) and (y) on and
after the Second Extension Date, Grace Period Liquidated Damages shall only be
payable in the event that any Grace Period exceeds sixty (60) calendar days in
the aggregate during any consecutive 365-day period (which sixty days shall
include Grace Periods which occur prior to the Second Extension Date to the
extent such Grace Periods are included within the applicable consecutive 365-day
period); provided further, however, that, if the Company has (1) exceeded the
25-day Grace Period prior to, and continuing on and after, the First Extension
Date or (2) exceeded the 45-day Grace Period prior to, and continuing on and
after, the Second Extension Date, then, in each such case, the Grace Period
Liquidated Damages shall continue to accrue until the expiration of any such
Grace Period. For purposes of determining the length of a Grace Period above,
the Grace Period shall begin on and include the date the holders receive the
notice referred to in clause (i) of this Section 3(f) and shall end on and
include the date the holders receive the notice referred to in clause (ii) of
this Section 3(f). The Mandatory Conversion Date (as defined in the Certificate
of Designation) shall be extended by one and one-half times the aggregate number
of days of all Grace Periods. Upon expiration of the Grace Period, the Company
shall again be bound by the first sentence of this Section 3(f) with respect to
the information giving rise thereto and the accrual of liquidated damages under
this Section 3(f) shall cease.
g. The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the
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qualification of any of the Registrable Securities for sale in any jurisdiction
and, if such an order or suspension is issued, to obtain the withdrawal of such
order or suspension at the earliest possible moment and to notify each Investor
who holds Registrable Securities being sold (and, in the event of an
underwritten offering, the managing underwriters) of the issuance of such order
and the resolution thereof or its receipt of actual notice of the initiation or
threat of any proceeding for such purpose.
h. The Company shall permit each Investor and a single firm of
counsel, initially Kramer, Levin, Naftalis & Xxxxxxx or such other counsel as
thereafter designated as selling stockholders' counsel by the Investors who hold
a majority of the Registrable Securities being sold, to review and comment upon
a Registration Statement and all amendments and supplements thereto at least
seven business days prior to their filing with the SEC, and not file any
document in a form to which such counsel reasonably objects. The Company shall
not submit a request for acceleration of the effectiveness of a Registration
Statement or any amendment or supplement thereto without the prior approval of
such counsel, which approval shall not be unreasonably withheld.
i. At the request of the Investors who hold a majority of the
Registrable Securities being sold, the Company shall use its best efforts to
furnish, on the date that Registrable Securities are delivered to an
underwriter, if any, for sale in connection with the Registration Statement (i)
if required by an underwriter, a letter, dated such date, from the Company's
independent certified public accountants in form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters, and (ii) an
opinion, dated as of such date, of counsel representing the Company for purposes
of such Registration Statement, in form, scope and substance as is customarily
given in an underwritten public offering, addressed to the underwriters and the
Investors.
j. The Company shall make reasonably available for inspection
by (i) any Investor, (ii) any underwriter participating in any disposition
pursuant to a Registration Statement, (iii) one firm of attorneys and one firm
of accountants or other agents retained by the Investors, and (iv) one firm of
attorneys retained by all such underwriters (collectively, the "Inspectors") all
pertinent financial and other records, and pertinent corporate documents and
properties of the Company (collectively the "Records"), as shall be reasonably
deemed necessary by each Inspector to enable each Inspector to exercise its due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information which any Inspector may reasonably request
for purposes of such due diligence; provided, however, that each Inspector shall
hold in confidence and shall not make any disclosure (except to an Investor) or
use of any Record or other information which the Company determines in good
faith to be confidential, and of which determination the Inspectors are so
notified in writing, unless (a) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in any Registration Statement or is
otherwise required under the 1933 Act, (b) the release of such Records is
ordered pursuant to a final, non-appealable subpoena or order from a court or
government body of competent jurisdiction, or (c) the information in such
Records has been made generally available to the public other than by disclosure
in violation of this or any other agreement of which the Inspector has
knowledge. The Company shall not be required to
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disclose any confidential information in such Record to an Inspector unless and
until such Inspector shall have entered into a confidentiality agreement with
the Company with respect thereto, substantially in accordance with the
provisions of this Section 3(j). Each Investor shall agree that, upon learning
that disclosure of such Records is sought in or by a court or governmental body
of competent jurisdiction or through other means, it will give prompt notice to
the Company and allow the Company, at its expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, the
Records deemed confidential.
k. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable 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 Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.
l. The Company shall use its best efforts (i) to secure the
inclusion for quotation on the OTC Electronic Bulletin Board or the Nasdaq
SmallCap Market (or another nationally recognized exchange or market), as
applicable, for all the Registrable Securities covered by a Registration
Statement 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. as such with respect to such Registrable Securities or
(ii) to cause such Registrable Securities to be listed or traded on each
securities exchange, automated quotation system or electronic bulletin board on
which securities of the same class or series issued by the Company are then
listed or traded, if any, if the listing or trading of such Registrable
Securities is then permitted under the rules of such exchange, automated
quotation system or electronic bulletin board. The Company shall pay all fees
and expenses in connection with satisfying its obligation under this section
3(l).
m. The Company shall cooperate with the Investors who hold
Registrable Securities being offered and, to the extent applicable, any managing
underwriter or underwriters, to facilitate the timely preparation and delivery
of certificates (not bearing any restrictive legend) representing the
Registrable Securities to be offered pursuant to a 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, if there is no
managing underwriter or underwriters, the Investors may reasonably request and
registered in such names as the managing underwriter or underwriters, if any, or
the Investors may request.
n. The Company shall provide a transfer agent and registrar
for all such Registrable Securities not later than the effective date of such
Registration Statement.
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o. If requested by the managing underwriters or an Investor,
the Company shall (i) immediately incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriters and the
Investors agree should be included therein relating to the sale and distribution
of Registrable Securities, including, without limitation, information with
respect to the number of Registrable Securities being sold to such underwriters,
the purchase price being paid therefor by such underwriters and any other terms
of the underwritten (or best efforts underwritten) offering of the Registrable
Securities to be sold in such offering; (ii) make all required filings of such
prospectus supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such prospectus supplement or post-effective
amendment; and (iii) supplement or make amendments to any Registration Statement
if requested by a shareholder or any underwriter of such Registrable Securities.
p. The Company shall use its best efforts to cause the
Registrable Securities covered by the applicable Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to consummate the disposition of such Registrable
Securities.
q. The Company shall make generally available to its security
holders as soon as practical, but not later than 90 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the 0000 Xxx) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the effective date of the Registration Statement.
r. The Company shall otherwise use its best efforts to comply
with all applicable rules and regulations of the SEC in connection with any
registration hereunder.
s. Within two (2) business days after the Registration
Statement which includes the Registrable Securities is ordered effective by the
SEC, the Company shall deliver, and shall cause legal counsel for the Company to
deliver, to the transfer agent for such Registrable Securities (with copies to
the Investors whose Registrable Securities are included in such Registration
Statement) confirmation that the Registration Statement has been declared
effective by the SEC in the form attached hereto as Exhibit A.
4. OBLIGATIONS OF THE INVESTORS.
----------------------------
a. At least seven (7) days prior to the first anticipated
filing date of a Registration Statement, the Company shall notify each Investor
in writing of the information the Company requires from each such Investor if
such Investor elects to have any of such Investor's Registrable Securities
included in such Registration Statement. It shall be a condition precedent to
the obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Investor
that such Investor shall furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.
- 10 -
b. Each Investor, by such Investor'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 any
Registration Statement hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from such Registration Statement.
c. In the event any Investor elects to participate in an
underwritten public offering pursuant to Section 2, each such Investor agrees to
enter into and perform such Investor's obligations under an underwriting
agreement, in usual and customary form, including, without limitation, customary
indemnification and contribution obligations (only with respect to violations
which occur in reliance upon and in conformity with information furnished in
writing to the Company by such Investor expressly for use in the Registration
Statement for such underwritten public offering), 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
such Investor notifies the Company in writing of such Investor's election to
exclude all of such Investor's Registrable Securities from such Registration
Statement.
d. Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 3(g)
or the first sentence of 3(f), such Investor will immediately discontinue
disposition of Registrable Securities pursuant to any Registration Statement(s)
covering such Registrable Securities until such Investor's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3(g) or the
first sentence of 3(f).
e. No Investor may participate in any underwritten
registration hereunder unless such Investor (i) agrees to sell such Investor's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Investors entitled hereunder to approve such arrangements, (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.
f. Each Investor agrees that (i) it will not offer or sell any
Registrable Securities under a Registration Statement until it has received
copies of the prospectus included in such Registration Statement as then amended
or supplemented and notice from the Company that such Registration Statement and
any post-effective amendments thereto have become effective as contemplated in
Section 3(f) and (ii) such Investor will comply with the prospectus delivery
requirements of the 1933 Act applicable to it in connection with sales of
Registrable Securities pursuant to such Registration Statement.
5. EXPENSES OF REGISTRATION.
------------------------
Except as otherwise provided in this Agreement, all expenses
incurred by the Company in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees,
fees and disbursements of counsel and accountants for the Company and fees
- 11 -
and disbursements of one counsel for the Investors (up to $5,000) as provided in
Section 2(b) shall be paid by the Company, whether or not any registration
statement becomes effective.
6. INDEMNIFICATION.
---------------
In the event any Registrable Securities are included in a
Registration Statement under this Agreement:
a. To the fullest extent permitted by law, the Company will,
and hereby does, indemnify, hold harmless and defend each Investor who holds
such Registrable Securities, the directors, officers, partners, employees,
agents of, and each Person, if any, who controls, any Investor within the
meaning of the 1933 Act or the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and any underwriter (as defined in the 0000 Xxx) for the Investors,
and the directors and officers of, and each Person, if any, who controls, any
such underwriter within the meaning of the 1933 Act or the 1934 Act (each, an
"Indemnified Person"), against any losses, claims, damages, liabilities,
judgments, fines, penalties, charges, costs, attorneys' fees, amounts paid in
settlement or expenses, joint or several (collectively, "Claims"), incurred in
investigating, preparing or defending any action, claim, suit, inquiry,
proceeding, investigation or appeal taken from the foregoing by or before any
court or governmental, administrative or other regulatory agency, body or the
SEC, whether pending or threatened, whether or not an indemnified party is or
may be a party thereto ("Indemnified Damages"), to which any of them may become
subject insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of a material fact in a Registration
Statement or any post-effective amendment thereto or in any filing made in
connection with the qualification of the offering under the securities or other
"blue sky" laws of any jurisdiction in which Registrable Securities are offered
("Blue Sky Filing"), or the omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which the statements therein were made, 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 pursuant to a Registration Statement (the matters in the
foregoing clauses (i) through (iii) being, collectively, "Violations"). Subject
to the restrictions set forth in Section 6(d) with respect to the number of
legal counsel, the Company shall reimburse the Indemnified Persons 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 expressly for use
in connection with the
- 12 -
preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c); and (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. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a), the Company, each of its directors, each
of its officers who signs the Registration Statement, each Person, if any, who
controls the Company within the meaning of the 1933 Act or the 1934 Act
(collectively and together with an Indemnified Person, an "Indemnified Party"),
against any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or
Indemnified Damages arise out of or are based upon any Violation, in each case
to the extent, and only to the extent, that such Violation occurs in reliance
upon and in conformity with written information furnished to the Company by such
Investor expressly for use in connection with such Registration Statement; and,
subject to Section 6(d), such Investor will reimburse any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 6(b) and the agreement with respect to contribution
contained in Section 7 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of such
Investor, which consent shall not be unreasonably withheld; provided, further,
however, that the Investor shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified Damages as does not exceed the net proceeds to
such Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented.
c. The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in any distribution, to the same extent as provided
above, with respect to information such persons so furnished in writing
expressly for inclusion in the Registration Statement.
d. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving
a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section
6, deliver to the indemnifying party a written notice of the commencement
thereof, and
- 13 -
the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying party, if, in
the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. The Company shall
pay reasonable fees for only one separate legal counsel for the Investors, and
such legal counsel shall be selected by the Investors holding a majority in
interest of the Registrable Securities included in the Registration Statement to
which the Claim relates. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any negotiation
or defense of any such action or claim by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to the
Indemnified Party or Indemnified Person which relates to such action or claim.
The indemnifying party shall keep the Indemnified Party or Indemnified Person
fully apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. No indemnifying party shall be liable for any
settlement of any action, claim, suit, inquiry, proceeding, investigation or
appeal taken from the foregoing effected without its written consent, provided,
however, that the indemnifying party shall not unreasonably withhold, delay or
condition its consent. No indemnifying party shall, without the consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such action, claim, suit, inquiry, proceeding, investigation or
appeal taken from the foregoing. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all Persons relating to
the matter for which indemnification has been made. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is materially prejudiced in its
ability to defend such action.
e. 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 and when bills are received or Indemnified Damages
are incurred.
f. The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.
- 14 -
7. CONTRIBUTION.
------------
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6; (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any seller of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (iii) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.
8. REPORTS UNDER THE 1934 ACT.
--------------------------
With a view to making available to the Investors 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 Investors 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 each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of 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 investors 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 Investors to any transferee of all or any portion of
Registrable Securities if: (i) 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 in accordance
with the terms of the Securities Purchase Agreement; (ii) at or before the time
the Company receives such written notice the transferee or assignee agrees in
writing with the Company to be bound by all of the
- 15 -
provisions contained herein, including providing the Company with a current
address for all required notices; (iii) such transfer shall have been made in
accordance with the applicable requirements of the Securities Purchase
Agreement; and (iv) such transferee shall be an "accredited investor" as that
term is defined in Rule 501 of Regulation D promulgated under the 1933 Act.
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 the written consent of the Company
and Investors who hold two-thirds (2/3) of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon each Investor and the Company.
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, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided a
confirmation of transmission is mechanically generated and kept on file by the
sending party); (iii) three (3) days after being sent by U.S. certified mail,
return receipt requested; or (iv) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
Certified Diabetic Services, Inc.
0000 Xxxxxxxxx Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx
With a copy to:
Xxxxx Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
- 16 -
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx
If to a Buyer, to its address and facsimile number on
the Schedule of Buyers attached hereto, with copies
to such Buyer's counsel as set forth on the Schedule
of Buyers.
Each party shall provide five (5) days prior notice to the other party of any
change in address, phone number or facsimile number or the person to whose
attention notices are to be sent.
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 interpreted in
accordance with the laws of the State of New York without regard to the
principles of conflict of laws. Each party hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts sitting the City of
New York, borough of Manhattan, for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
e. This Agreement and the Securities Purchase Agreement
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, this Agreement
shall inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto and, with respect to Section 6, to the
benefit of the Indemnified Persons and Indemnified Parties.
g. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect, the meaning hereof. Any
reference to "Section __" shall refer to the applicable section of this
Agreement.
- 17 -
h. This Agreement may be executed in two or more identical
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this
Agreement.
i. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
j. All consents and other determinations to be made by the
Investors pursuant to this Agreement shall be made, unless otherwise specified
in this Agreement, by Investors holding a majority of the Registrable
Securities, determined as if all of the Preferred Shares then outstanding have
been converted into, and all of the Warrants have been exercised for,
Registrable Securities.
k. 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.
- 18 -
IN WITNESS WHEREOF, the Buyers and the Company have caused this
Registration Rights Agreement to be duly executed as of the date first written
above.
COMPANY: BUYERS:
CERTIFIED DIABETIC SERVICES, XXXXXXXX, L.P.
INC. By: Xxxxxx, Xxxxxx & Co., L.P.
Its: General Partner
By: /s/ Xxxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxxx By:
Its: Chief Financial Officer ------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Chief Operating Officer
GAM ARBITRAGE INVESTMENTS, INC.
By: Xxxxxx, Xxxxxx & Co., L.P.
Its: Investment Advisor
By:
------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Chief Operating Officer
AG SUPER FUND INTERNATIONAL
PARTNERS, L.P.
By: Xxxxxx, Xxxxxx & Co., L.P.
Its: General Partner
By:
------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Chief Operating Officer
RAPHAEL, L.P.
By:
------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Chief Operating Officer
IN WITNESS WHEREOF, the Buyers and the Company have caused this
Registration Rights Agreement to be duly executed as of the date first written
above.
COMPANY: BUYERS:
CERTIFIED DIABETIC SERVICES, XXXXXXXX, L.P.
INC. By: Xxxxxx, Xxxxxx & Co., L.P.
Its: General Partner
By:
-------------------------------
Name: By: /s/ Xxxxxxx X. Xxxxxx
Its: ------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Chief Operating Officer
GAM ARBITRAGE INVESTMENTS, INC.
By: Xxxxxx, Xxxxxx & Co., L.P.
Its: Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Chief Operating Officer
AG SUPER FUND INTERNATIONAL
PARTNERS, L.P.
By: Xxxxxx, Xxxxxx & Co., L.P.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Chief Operating Officer
RAPHAEL, L.P.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Chief Operating Officer
RAMIUS FUND, LTD.
By: AG Ramius Partners, L.L.C.
Its: Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Managing Officer
AGR HALIFAX FUND, LTD.
By: AG Ramius Partners, L.L.C.
Its: Investment Advisor
By:__________________________
Name:
Its: Managing Officer
AMRO INTERNATIONAL, S.A.
By:__________________________
Name: X. X. Xxxxxxxx
Its: Director
RAMIUS FUND, LTD.
By: AG Ramius Partners, L.L.C.
Its: Investment Advisor
By:____________________________
Name: Xxxxxxx X. Xxxxxx
Its: Managing Officer
AGR HALIFAX FUND, LTD.
By: AG Ramius Partners, L.L.C.
Its: Investment Advisor
By: /s/ Xxxxx X. Xxxxx
-------------------------
Name: Xxxxx X. Xxxxx
Its: Managing Officer
AMRO INTERNATIONAL, S.A.
By:__________________________
Name:
Its:
RAMIUS FUND, LTD.
By: AG Ramius Partners, L.L.C.
Its: Investment Advisor
By:____________________________
Name: Xxxxxxx X. Xxxxxx
Its: Managing Officer
AGR HALIFAX FUND, LTD.
By: AG Ramius Partners, L.L.C.
Its: Investment Advisor
By:__________________________
Name:
Its: Managing Officer
AMRO INTERNATIONAL, S.A.
By: /s/ Xxxxxxx Xxxx
-------------------------
Name: Xxxxxxx Xxxx
Its:
SCHEDULE OF BUYERS
Number
of
Investor Address Purchase Preferred Number of
Investor Name and Facsimile Number Price Shares Warrants
------------------------------- -------------------------------- ------------ ----------- ------------
Xxxxxxxx, L.P. c/o Xxxxxx, Xxxxxx & Co., L.P. $750,000 750 17,500.00
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxx
Facsimile: 000-000-0000
GAM Arbitrage c/o Xxxxxx, Xxxxxx & Co., L.P. $100,000 100 2,333.33
Investments, Inc. 000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxx
Facsimile: 000-000-0000
AG Super Fund c/o Xxxxxx, Xxxxxx & Co., L.P. $100,000 100 2,333.33
International Partners, L.P. 000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxx
Facsimile: 000-000-0000
Raphael, L.P. c/o Xxxxxx, Xxxxxx & Co., L.P. $100,000 100 2,333.33
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxx
Facsimile: 000-000-0000
Ramius Fund, Ltd. c/o Xxxxxx, Xxxxxx & Co., L.P. $200,000 200 4,666.67
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxx
Facsimile: 000-000-0000
AGR Halifax Fund, Ltd. c/o CITCO Fund Services $1,250,000 1,250 29,166.67
(Cayman Islands), Ltd.
Corporate Center, West Bay
Road
P.O. Box 31106 SMB
Grand Cayman, Cayman Islands,
B.W.I.
Attn: Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
Notice address:
c/o AG Ramius Partners, L.L.C.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile: 000-000-0000
Amro International, S.A. c/o Ultra Finance, Ltd. $500,000 500 11,666.67
Xxxxxxxxxxxxxxxxx 00
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxx CH-8022
Attn: X.X. Xxxxxxxx
Facsimile: 000-000-000-0000
Notice address:
c/x Xxxxxx & Xxxxxx Securities
Corp.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx
Facsimile: 000-000-0000
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[ ]
[ADDRESS]
Attn:
Re: Certified Diabetic Services, Inc.
---------------------------------
Ladies and Gentlemen:
We are counsel to Certified Diabetic Services, Inc., a Delaware
corporation (the "Company"), and have represented the Company in connection with
that certain Securities Purchase Agreement (the "Purchase Agreement") entered
into by and among the Company and the buyers named therein (collectively, the
"Holders") pursuant to which the Company issued to the Holders shares of the
Company's Series A Convertible Preferred Stock, par value $.01 per share (the
"Preferred Shares"), convertible into shares of the Company's Common Stock, par
value $.01 per share (the "Common Stock"), and warrants (the "Warrants") to
purchase shares of Common Stock. Pursuant to the Purchase Agreement, the Company
also has entered into a Registration Rights Agreement with the Holders (the
"Registration Rights Agreement") pursuant to which the Company agreed, among
other things, to register the Registrable Securities (as defined in the
Registration Rights Agreement), including the shares of Common Stock issuable
upon conversion of the Preferred Shares and the shares of Common Stock issuable
upon exercise of the Warrants, under the Securities Act of 1933, as amended (the
"1933 Act"). In connection with the Company's obligations under the Registration
Rights Agreement, the Company filed a Registration Statement (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC") relating to
the Registrable Securities which names each of the Holders as a selling
stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[ ]
By:________________________
cc: [LIST NAMES OF HOLDERS]
