EXHIBIT 99.2
CHROMAVISION MEDICAL SYSTEMS, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of March 25, 2004, by and among ChromaVision Medical Systems,
Inc., a Delaware corporation (the "COMPANY"), and the investors signatory hereto
(each a "PURCHASER" and collectively, the "PURCHASERS").
This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of the date hereof, among the Company and the Purchasers
(the "PURCHASE AGREEMENT").
The Company and the Purchasers hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the respective meanings set forth in this Section 1:
"ADVICE" shall have the meaning set forth in Section 7(d).
"CLOSING DATE" shall have the meaning assigned to the term "Initial
Closing Date" in the Purchase Agreement.
"DEFERRAL PERIOD" shall have the meaning set forth in Section 2(c).
"EFFECTIVE DATE" means the date that the Registration Statement
filed pursuant to Section 2(a) is first declared effective by the Commission.
"EFFECTIVENESS DATE" means the earliest to occur of (a) (i) if there
is no review of the Registration Statement by the Commission, the 60th calendar
day following the date of this Agreement, or (ii) if the Commission reviews the
Registration Statement, the 120th calendar day following the date of this
Agreement and (b) and the second Trading Day following the date on which the
Company is notified by the Commission that the Registration Statement will not
be reviewed or is no longer subject to further review and comments.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in Section
2(a).
"EVENT" shall have the meaning set forth in Section 2(b).
"EVENT DATE" shall have the meaning set forth in Section 2(b).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FILING DATE" means the 10th calendar day following the date of this
Agreement, provided that if such date is not a Business Day, then the next
subsequent Business Day after such 10th calendar day.
"HOLDER" or "HOLDERS" means the Purchasers and the holder or
holders, as the case may be, from time to time of Registrable Securities which
have not been sold to the public who have received such Registrable Securities
from a Purchaser or a permitted successor or assignee of such Purchaser pursuant
to Section 5.6 of the Securities Purchase Agreement and who have become parties
to this Agreement by executing a signature page hereto.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section
6(c).
"INDEMNIFYING PARTY" shall have the meaning set forth in Section
6(c).
"LOSSES" shall have the meaning set forth in Section 6(a).
"MATERIAL PERMITS" shall have the meaning set forth in the Purchase
Agreement.
"NEW YORK COURTS" shall have the meaning set forth in Section 7(j).
"PROCEEDING" means an action, demand, claim, litigation, suit,
investigation, arbitration or proceeding (including, without limitation, a
partial proceeding, such as a deposition), whether pending or threatened.
"PROSPECTUS" means the prospectus included in a Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
"REGISTRABLE SECURITIES" means (i) all of the Shares, (ii) all of
the Warrant Shares, (iii) securities issued or issuable upon any stock split,
stock dividend, recapitalization or similar event with respect to the Shares or
the Warrant Shares, and (iv) any other security issued as a dividend or other
distribution with respect to, in exchange for or in replacement of the
securities referred to in the preceding clauses.
"REGISTRATION STATEMENT" means the registration statement or
statements required to be filed hereunder, including (in each case) the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
"RULE 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"RULE 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
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"RULE 424" means Rule 424 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLING STOCKHOLDER" means each Purchaser who sells Registrable
Securities pursuant to a Registration Statement.
"SHARES" means the shares of Common Stock issued to the Purchasers
pursuant to the Purchase Agreement.
"SPECIAL COUNSEL" means the counsel selected to act as special
counsel hereunder by Purchasers representing at least a majority in interest of
all Purchasers, the name and contact information of which has been provided to
the Company.
"SUBSIDIARY" means any "significant subsidiary" as defined in Rule
1-02(w) of Regulation S-X promulgated by the Commission under the Exchange Act.
"TRADING DAY" means (i) a day on which the Company's common stock is
traded on a Trading Market, or (ii) if the common stock is not listed on a
Trading Market, a day on which the common stock is traded on the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
common stock is not quoted on the OTC Bulletin Board, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding
its functions of reporting prices); provided, that in the event that the common
stock is not listed or quoted as set forth in (i), (ii) or (iii) hereof, then
Trading Day shall mean a Business Day (as defined in the Purchase Agreement).
"TRADING MARKET" means the following markets or exchanges on which
the Company's common stock is listed or quoted for trading on the date in
question: the American Stock Exchange, the New York Stock Exchange, the Nasdaq
National Market or the Nasdaq SmallCap Market.
"WARRANTS" means the Common Stock Purchase Warrants issued to the
Purchasers at the Closing pursuant to the Purchase Agreement.
"WARRANT SHARES" means the shares of Common Stock issuable upon
exercise of the Warrants.
2. Registration.
(a) On or prior to the Filing Date, the Company shall prepare and
file with the Commission a Registration Statement covering the resale of all
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415. The Registration Statement shall be on Form S-3 (except if the
Company is not then eligible to register for resale the Registrable Securities
on Form S-3, in which case such registration shall be on another appropriate
form for such purpose) and shall contain (except if otherwise required pursuant
to
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written comments received from the Commission upon a review of such Registration
Statement) the "Plan of Distribution" attached hereto as Annex A. The Company
shall use its best efforts to cause the Registration Statement to be declared
effective under the Securities Act as soon as possible but, in any event, no
later than the Effectiveness Date, and shall use its best efforts to keep the
Registration Statement continuously effective under the Securities Act until the
earlier of (i) the date that all Registrable Securities covered by such
Registration Statement have been sold, (ii) the second anniversary of the
Subsequent Closing Date or (iii) such earlier date when all Registrable
Securities covered by the Registration Statement have been sold or may be sold
without volume restrictions pursuant to Rule 144(k) as determined by the counsel
to the Company pursuant to a written opinion letter to such effect, addressed
and acceptable to the Company's transfer agent and the affected Holders (the
"EFFECTIVENESS PERIOD").
(b) If: (i) a Registration Statement is not filed on or prior to its
Filing Date, or (ii) a Registration Statement is not declared effective by the
Commission on or prior to the required Effectiveness Date, or (iii) after the
Effective Date, such Registration Statement ceases to be effective and available
to the Holders as to all Registrable Securities to which it is required to cover
at any time prior to the expiration of its Effectiveness Period, (any such
failure or breach being referred to as an "EVENT," and for purposes of clauses
(i), (ii) or (iii) the date on which such Event occurs, being referred to as
"EVENT DATE"), then, in addition to any other rights available to the Holders,
on each such Event Date and on each monthly anniversary of each such Event Date
(if the applicable Event shall not have been cured by such date) until the
applicable Event is cured the Company shall pay to each Holder, as liquidated
damages and not as a penalty, a cash payment equal to 1% of the aggregate
purchase price of Shares purchased by that Purchaser pursuant to the Purchase
Agreement that are not covered by a Registration Statement. The liquidated
damages pursuant to the terms hereof shall apply on a pro rata basis for any
portion of a month prior to the cure of an Event.
(c) Notwithstanding anything in this Agreement to the contrary, the
Company may, by written notice to the Purchasers, suspend the effectiveness of a
Registration Statement after the Effective Date thereof and/or require that the
Purchasers immediately cease the sale of shares of Common Stock pursuant thereto
and/or defer the filing of any subsequent Registration Statement for up to 30
consecutive days (the "DEFERRAL PERIOD") in any 90-day period without paying
liquidated damages pursuant to Section 2(b), if the Company determines in good
faith, by appropriate resolutions or action by its Board of Directors, that (A)
it would be materially detrimental to the Company (other than as relating solely
to the price of the Common Stock) to file a Registration Statement at such time
and (B) it is in the best interests of the Company to defer proceeding with such
registration at such time; provided, however, that in the event the disclosure
relates to a previously undisclosed proposed or pending material business
transaction, the disclosure of which the Company determines in good faith would
be reasonably likely to impede the Company's ability to consummate such
transaction, the Company may extend a Deferral Period from 30 days to 45 days
without paying liquidated damages pursuant to Section 2(b); provided further,
however, that Deferral Periods (including but not limited to any extended
Deferral Periods under clause (B)) may not total more than 60 days in the
aggregate in any twelve-month period. Upon receipt of such notice, each
Purchaser shall immediately discontinue any sales of Registrable Securities
pursuant to such registration until such Purchaser has received copies of a
supplemented or amended Prospectus or until such Purchaser is advised in writing
by the Company that the then-current Prospectus may be used and has received
copies of any
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additional or supplemental filings that are incorporated or deemed incorporated
by reference in such Prospectus. In no event, however, shall this right be
exercised to suspend sales beyond the period during which (in the good faith
determination of the Company's Board of Directors) the failure to require such
suspension would be materially detrimental to the Company.
3. Consents. Prior to filing the Registration Statement, the Company and
its Subsidiaries shall make or obtain all Material Permits necessary or
desirable for the consummation of the transactions contemplated hereby.
4. Registration Procedures. In connection with the Company's registration
obligations hereunder, the Company shall:
(a) Not less than three Trading Days prior to the filing of a
Registration Statement or any related Prospectus or any amendment or supplement
thereto, furnish to the Special Counsel copies of all such documents proposed to
be filed which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the reasonable review of the
Holders and the Special Counsel. The Company shall not file a Registration
Statement or any such Prospectus or any amendments or supplements (other than
periodic reports required under the Exchange Act) thereto to which the Holders
of a majority of the Registrable Securities or the Special Counsel shall
reasonably object in writing within two Trading Days of receipt.
(b) (i) Subject to Section 2(c), prepare and file with the
Commission such amendments, including post-effective amendments, to each
Registration Statement and the Prospectus used in connection therewith as may be
necessary to keep such Registration Statement continuously effective as to the
applicable Registrable Securities for its Effectiveness Period and prepare and
file with the Commission such additional Registration Statements in order to
register for resale under the Securities Act all of the Registrable Securities;
(ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424; (iii) respond as promptly as reasonably possible to any comments
received from the Commission with respect to each Registration Statement or any
amendment thereto and, as promptly as reasonably possible, upon request, provide
the Holders true and complete copies of all correspondence from and to the
Commission relating to such Registration Statement that would not result in the
disclosure to the Holders of material and non-public information concerning the
Company; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the Registration Statements
and the disposition of all Registrable Securities covered by each Registration
Statement during the applicable period in accordance with the intended methods
of disposition by the Purchasers thereof set forth in the Registration Statement
as so amended or in such Prospectus as so supplemented.
(c) Notify the Special Counsel as promptly as reasonably possible
(and, in the case of (i)(A) below, not less than three Trading Days prior to
such filing) and (if requested by any such Person) confirm such notice in
writing promptly following the day (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to a Registration Statement is proposed
to be filed; (B) when the Commission notifies the Company whether there will be
a "review" of such Registration Statement and whenever the Commission comments
in
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writing on such Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to the Special Counsel
that pertain to the Holders as a Selling Stockholder or to the Plan of
Distribution, but not information which the Company believes would constitute
material and non-public information); and (C) with respect to each Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or any other federal or state governmental
authority for amendments or supplements to a Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any 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.
(d) Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.
(e) Furnish to each Holder by email, hand delivery or overnight
courier, without charge, at least one conformed copy of each Registration
Statement and each amendment thereto, and all exhibits to the extent requested
by such Person (other than those previously furnished or incorporated by
reference) promptly after the filing of such documents with the Commission.
(f) Promptly deliver to each Holder, without charge, as many copies
of each Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request. The
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto to the extent permitted by federal and state
securities laws and regulations.
(g) Prior to any public offering of Registrable Securities, use its
reasonable best efforts to register or qualify or cooperate with the selling
Holders in connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Securities for offer and
sale under the securities or blue sky laws of such jurisdictions within the
United States as any Holder reasonably requests in writing, to keep each such
registration or qualification (or exemption therefrom) effective during the
Effectiveness
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Period and to do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Registrable Securities
covered by the Registration Statements; provided, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to material taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject.
(h) Cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be delivered
to a transferee pursuant to the Registration Statements, which certificates
shall be free, to the extent permitted by the Purchase Agreement, of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holders may request.
(i) Upon the occurrence of any event described in Section 4(c)(v),
as promptly as reasonably possible, prepare a supplement or amendment, including
a post-effective amendment, to the affected Registration Statements or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain an 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 under which they were made, not misleading.
(j) Comply with all applicable rules and regulations of the
Commission.
(k) The Company may require each selling Holder to furnish to the
Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and any controlling person thereof.
5. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with any Trading Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
blue sky laws), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the printing of prospectuses is reasonably requested by the holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) the reasonable fees and disbursements of the
Special Counsel in connection with any Registration Statement covering any
Registrable Securities, not to exceed $10,000 with respect to any one
Registration Statement, (vi) Securities Act liability insurance, if the Company
so desires such insurance, and (vii) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting
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duties), the expense of any annual audit and the fees and expenses incurred in
connection with the listing of the Registrable Securities on any securities
exchange as required hereunder.
6. Indemnification.
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, the officers, directors, agents, investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
reasonable costs of preparation and reasonable attorneys' fees) and expenses
(collectively, "LOSSES"), as incurred, arising out of or relating to any untrue
or alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus or any form of prospectus or in any amendment or
supplement thereto, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (1) such
untrue statements or omissions are based solely upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in
the Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto (it being understood that each Holder has
approved Annex A hereto for this purpose) or (2) in the case of an occurrence of
an event of the type specified in Section 4(c)(ii)-(v), the use by such Holder
of an outdated or defective Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated or defective and prior to the
receipt by such Holder of the Advice contemplated in Section 7(d) or an amended
or supplemented Prospectus, but only if and to the extent that following the
receipt of the Advice or the amended or supplemented Prospectus the misstatement
or omission giving rise to such Loss would have been corrected in all material
respects by such Advice or the amended or supplemented Prospectus and the Holder
fails to deliver such Advice or amended or supplemented Prospectus. The Company
shall notify the Holders promptly of the institution, threat or assertion of any
Proceeding of which the Company is aware in connection with the transactions
contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising out of or based upon (x) such Holder's failure to comply with
the prospectus delivery requirements of the Securities Act, if the delivery of
such a prospectus would have cured or prevented the Loss, or (y) any untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising out of or based upon any omission of a material fact
required to be
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stated therein or necessary to make the statements therein not misleading to the
extent, but only to the extent that, (1) such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement (it
being understood that each Holder has approved Annex A hereto for this purpose),
such Prospectus or such form of Prospectus or in any amendment or supplement
thereto or (2) in the case of an occurrence of an event of the type specified in
Section 4(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
an Advice or an amended or supplemented Prospectus, but only if and to the
extent that following the receipt of the Advice or the amended or supplemented
Prospectus the misstatement or omission giving rise to such Loss would have been
corrected in all material respects by such Advice or the amended or supplemented
Prospectus and the Holder fails to deliver such Advice or amended or
supplemented Prospectus. In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall
be brought or asserted against any Person entitled to indemnity hereunder (an
"INDEMNIFIED PARTY"), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the "INDEMNIFYING PARTY") in writing, and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it is
materially adversely prejudiced thereby.
An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall have the right
to participate in such defense and such counsel shall be at the expense of the
Indemnifying Party). It being understood, however, that the Indemnifying Party
shall not, in connection with any one such Proceeding be liable for the fees and
expenses of more than one separate firm of attorneys at any time for all
Indemnified Parties, which firm shall be appointed by a majority of the
Indemnified Parties. The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the
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prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding with
respect to which the Indemnified Party is entitled to indemnity hereunder.
All reasonable fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section 6) that are to be paid by the Indemnifying Party
pursuant to this Section 6 shall be paid to the Indemnified Party, as incurred,
within ten Trading Days of written notice thereof to the Indemnifying Party;
provided, that the Indemnifying Party may require such Indemnified Party to
reimburse all such fees and expenses to the extent it is finally judicially
determined that such Indemnified Party is not entitled to indemnification
hereunder).
(d) Contribution. If a claim for indemnification under Section 6(a)
or 6(b) is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 6(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, except in the case of fraud by
such Holder. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
The indemnity and contribution agreements contained in this Section
6 are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
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7. Miscellaneous
(a) Remedies. In the event of a breach by the Company or by a
Holder, of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
(b) No Piggyback on Registrations. Except as and to the extent
specified in Schedule 7(b) hereto, neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include
securities of the Company in the Registration Statement other than the
Registrable Securities, and the Company shall not after the date hereof enter
into any agreement providing any such right to any of its security holders.
Except as and to the extent specified in Schedule 7(b) hereto, the Company has
not previously entered into any agreement granting any registration rights with
respect to any of its securities to any Person which have not been fully
satisfied.
(c) Compliance. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it in connection with sales of Registrable Securities pursuant to the
Registration Statement.
(d) Discontinued Disposition. Each Holder agrees by its acquisition
of such Registrable Securities that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 4(c), such
Holder will forthwith discontinue disposition of such Registrable Securities
under the Registration Statement until such Holder's receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (in each case, "ADVICE") by the Company that the use of the
applicable Prospectus may be resumed, and, in either case, has received copies
of any additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph.
(e) Piggy-Back Registrations. If at any time during the
Effectiveness Period there is not an effective Registration Statement covering
all of the Registrable Securities and the Company shall determine to prepare and
file with the Commission a registration statement relating to an offering for
its own account or the account of others under the Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents relating to equity securities to
be issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within ten days after receipt of such notice, any such
Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
holder requests to be
11
registered, subject to customary underwriter cutbacks applicable to all holders
of registration rights.
(f) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of a majority of the then outstanding Registrable Securities.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
certain Holders and that does not directly or indirectly affect the rights of
other Holders may be given by Holders of at least a majority of the Registrable
Securities to which such waiver or consent relates, provided, that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the immediately preceding sentence.
(g) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section 7(g) prior to 6:30 p.m. (New York
City time) on a Trading Day or by email to the email address specified in this
Section 7(g), (ii) the Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified in this Agreement later than 6:30 p.m. (New York City time) on
any date and earlier than 11:59 p.m. (New York City time) on such date, (iii)
the Trading Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and communications
shall be as follows:
If to the Company: ChromaVision Medical Systems, Inc.
00000 Xxxxx Xxxxxxx
Xxx Xxxx Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxx, CFO
E-mail: xxxxxx@xxxxxxxxxxxx.xxx
Facsimile No.: (000) 000-0000
With a copy to: Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
Attn: X. Xxxxxxxxx Voxman, Esq.
E-mail: Xxxx.Xxxxxx@XX.xxx
Facsimile No.: (000) 000-0000
If to a Purchaser: To the address (or email or facsimile number) set
forth under such Purchaser's name on the signature
pages hereto.
12
If to Special Counsel: To such address (or email or facsimile number) as
provided to the Company following the date hereof
by Purchasers representing at least a majority in
interest of all Purchasers.
If to any other Person who is then the registered Holder:
To the address of such Holder as it appears
in the stock transfer books of the Company
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
(h) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder. Each Holder may assign their respective rights hereunder in the
manner and to the Persons who acquire Registrable Securities as permitted to a
Purchaser under the Purchase Agreement and who become parties to this agreement
by executing a counterpart signature page hereto.
(i) Execution and Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(j) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective Affiliates, employees or agents) shall
be commenced exclusively in the state and federal courts sitting in the City of
New York, Borough of Manhattan (the "NEW YORK COURTS"). Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the New York Courts 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 Proceeding, any claim that it is not
personally subject to the jurisdiction of any New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for 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. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any Proceeding arising out of or
13
relating to this Agreement or the transactions contemplated hereby. If either
party shall commence a Proceeding to enforce any provisions of this Agreement,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its attorney's fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.
(k) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(n) No Conflicting Agreements. During the Effectiveness Period, the
Company shall not enter into any agreements, arrangements or understandings that
in any way conflict with this Agreement or limit the Company's ability to
perform its obligations under this Agreement.
(o) Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser hereunder are several and not joint with the
obligations of any other Purchaser hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES TO FOLLOW]
14
IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.
CHROMAVISION MEDICAL SYSTEMS, INC.
By:_________________________________
Name:
Title:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES OF PURCHASERS TO FOLLOW]
IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.
________________________________________
[Print name of Purchaser]
By:_____________________________________
Name:
Title:
Annex A
Plan of Distribution
The Selling Stockholders and any of their pledgees, donees, assignees or
successors-in-interest in receipt of shares of Common Stock as a result of a
gift, partnership distribution, or other non-sale-related transfer, may, from
time to time and in one or more transactions, offer shares for sale pursuant to
this Prospectus. Subject to compliance with applicable law, the Selling
Stockholders may use any one or more of the following methods when selling
shares:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
- on any exchange distribution in accordance with the rules of the
applicable exchange, in The Nasdaq Stock Market, the Nasdaq SmallCap
Market or in the Over-the-Counter market;
- privately negotiated transactions;
- through the writing of options on (whether the options are listed on
an options exchange or otherwise), or settlement of short sales of,
the shares;
- broker-dealers may agree with the Selling Stockholders to sell a
specified number of such shares at a stipulated price per share;
- a combination of two or more of these methods; and
- any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares in transactions exempt from
the registration requirements of the Section 5 of the Securities Act, including
under Rule 144 under the Securities Act, if available, rather than under this
Prospectus.
Any of these transactions may be effected at market prices prevailing at
the time of sale, at prices related to the prevailing market prices, at varying
prices determined at the time of sale or at negotiated or fixed prices, in each
case as determined by the Selling Stockholders or by agreement among or between
the Selling Stockholders and the underwriters, brokers, dealers, agents or
purchasers.
Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts
15
from the Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated. The
Selling Stockholders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved.
The Selling Stockholders may from time to time pledge or grant a security
interest in some or all of the shares owned by them. If they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell their shares from time to time under this Prospectus, or under a
supplement to this Prospectus under Rule 424(b)(3) or other applicable provision
of the Securities Act amending the list of Selling Stockholders to include the
pledgee or secured party as Selling Stockholders under this Prospectus.
Upon the Company being notified in writing by a Selling Stockholder that
any material arrangement has been entered into with a broker-dealer for the sale
of shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
Prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such Selling Stockholder and of
the participating broker(s)-dealer(s), (ii) the number of shares involved, (iii)
the price at which such shares were sold, (iv) the commissions paid or discounts
or concessions allowed to such broker(s)-dealer(s), where applicable, (v) that
such broker(s)-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this Prospectus, and (vi)
other facts material to the transaction. If a Selling Stockholder transfers the
shares covered by this Prospectus in a transaction exempt from the registration
requirements of Section 5 of the Securities Act, including under Rule 144 if
available, the transferees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this Prospectus, and a supplement to
this Prospectus will be filed pursuant to Rule 424(b) under the Securities Act
to reflect the transferee as the Selling Stockholder.
The Selling Stockholders and any broker(s)-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Each Selling Stockholders has
represented and warranted to the Company that it does not have any agreement or
understanding, directly or indirectly, with any person to distribute the shares.
The Company has agreed to pay all fees and expenses incident to the
registration of the shares. The Company also has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
Xxxxxxxxx & Company, Inc. acted as a placement agent in connection
with the private placement of the shares, and it received a fee in
connection with its role as placement agent.
The Company has informed the Selling Stockholders that the
anti-manipulation provision of Regulation M under the Exchange Act may apply to
purchases and sales of shares by the Selling Stockholders, and that there are
restrictions on market making activities by persons engaged in the distribution
of the shares. The Company has also advised the Selling Stockholders that if a
particular offer of shares is to be made on terms constituting a material
16
change from the information described under this Prospectus, then to the extent
required, a supplement to this Prospectus must be distributed setting forth the
terms and relate information as required.
