Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT is made as of May 4, 2006, by and among
ASPYRA, INC., a California corporation (the ”Company”), with headquarters
located at 26115-A Mureau Road, Calabasas, California 91302, and the purchasers
(collectively, the “Purchasers” and each a “Purchaser”) set forth on Schedule 1
hereof, with regard to the following:

 

RECITALS

 

WHEREAS, the Company and the Purchasers are parties to that certain Common Stock
and Warrant Purchase Agreement dated as of May 4, 2006 (the “Purchase
Agreement”); and

 

WHEREAS, as a condition of the obligations of, and an inducement to, the parties
to consummate the purchase by the Purchasers of the Common Shares and Warrants
(each as defined in the Purchase Agreement), contemplated by the Purchase
Agreement, this Agreement shall be executed and delivered.

 

NOW, THEREFORE, in consideration of their respective promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and Purchasers hereby agree as follows:

 

Any capitalized terms not defined herein shall have the meaning set forth in the
Purchase Agreement.

 

ARTICLE I.

REGISTRATION OF SHARES; COMPLIANCE WITH THE SECURITIES ACT

 

SECTION 1.1                                      REGISTRATION PROCEDURES AND
EXPENSES. THE COMPANY SHALL:

 

(A)                                  SUBJECT TO RECEIPT OF NECESSARY INFORMATION
FROM THE PURCHASERS, INCLUDING ALL INFORMATION REQUESTED BY SCHEDULE 2 HEREOF,
USE COMMERCIAL REASONABLE EFFORTS TO PREPARE AND FILE WITH THE SEC, WITHIN SIXTY
(60) DAYS AFTER THE CLOSING OF THE PURCHASE AGREEMENT, A REGISTRATION STATEMENT
(THE “REGISTRATION STATEMENT”) ON FORM S-3 (OR, IF FORM S-3 IS NOT THEN
AVAILABLE TO THE COMPANY, ON SUCH APPROPRIATE FORM AS IS THEN AVAILABLE TO THE
COMPANY) TO ENABLE THE RESALE OF THE REGISTRABLE SHARES BY THE PURCHASERS ON A
DELAYED OR CONTINUOUS BASIS UNDER RULE 415 OF THE SECURITIES ACT. “REGISTRABLE
SHARES” MEANS (A) EACH COMMON SHARE AND (B) EACH WARRANT SHARE UNTIL THE EARLIER
OF: (1) THE DATE ON WHICH SUCH SHARE HAS BEEN RESOLD OR OTHERWISE TRANSFERRED
PURSUANT TO THE REGISTRATION STATEMENT; (2) THE DATE ON WHICH SUCH SHARE IS
TRANSFERRED IN COMPLIANCE WITH RULE 144 UNDER THE SECURITIES ACT OR MAY BE SOLD
OR TRANSFERRED PURSUANT TO RULE 144 UNDER THE SECURITIES ACT (OR ANY OTHER
SIMILAR PROVISIONS THEN IN FORCE) WITHOUT ANY VOLUME OR MANNER OF SALE
RESTRICTIONS THEREUNDER; OR (3) THE DATE ON WHICH SUCH SHARE CEASES TO BE
OUTSTANDING (WHETHER AS A RESULT OF REDEMPTION, REPURCHASE AND CANCELLATION OR
OTHERWISE). PRIOR TO THE FILING OF THE REGISTRATION STATEMENT, THE COMPANY WILL
PROVIDE TO EACH PURCHASER A COPY OF THE “SELLING SHAREHOLDER” SECTION FOR THEIR
REVIEW, AND IF NO COMMENTS ARE RECEIVED WITHIN THREE (3) DAYS OF DELIVERY OF
THIS SECTION, THEN IT WILL BE DEEMED APPROVED.

 

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(B)                                 USE COMMERCIAL REASONABLE EFFORTS, SUBJECT
TO RECEIPT OF NECESSARY INFORMATION FROM THE PURCHASERS, INCLUDING THE
REGISTRATION STATEMENT QUESTIONNAIRE, TO CAUSE THE REGISTRATION STATEMENT TO
BECOME EFFECTIVE WITHIN 120 DAYS OF THE CLOSING OF THE PURCHASE AGREEMENT (THE
“EFFECTIVE DATE DEADLINE”).

 

(C) USE COMMERCIAL REASONABLE EFFORTS TO PREPARE AND FILE WITH THE SEC SUCH
AMENDMENTS AND SUPPLEMENTS TO THE REGISTRATION STATEMENT AND THE PROSPECTUS (AS
DEFINED IN SECTION 1.3 BELOW) USED IN CONNECTION THEREWITH AND TAKE ALL SUCH
OTHER ACTIONS AS MAY BE NECESSARY TO KEEP THE REGISTRATION STATEMENT CURRENT AND
EFFECTIVE FOR A PERIOD (THE ”REGISTRATION PERIOD”) NOT EXCEEDING, WITH RESPECT
TO THE PURCHASER’S REGISTRABLE SHARES, THE EARLIER OF (I) THE SECOND ANNIVERSARY
OF THE CLOSING OF THE PURCHASE AGREEMENT (PROVIDED, HOWEVER, THAT WITH RESPECT
TO REGISTRABLE SHARES THAT ARE WARRANT SHARES, THE FOREGOING DATE SHALL BE THE
SECOND ANNIVERSARY OF THE DATE THE RELATED WARRANT WAS EXERCISED), (II) THE DATE
ON WHICH ALL REGISTRABLE SHARES THEN HELD BY THE PURCHASER MAY BE SOLD OR
TRANSFERRED IN COMPLIANCE WITH RULE 144 UNDER THE SECURITIES ACT (OR ANY OTHER
SIMILAR PROVISIONS THEN IN FORCE) WITHOUT ANY VOLUME OR MANNER OF SALE
RESTRICTIONS THEREUNDER, AND (III) SUCH TIME AS ALL REGISTRABLE SHARES HELD BY
THE PURCHASER HAVE BEEN SOLD (A) PURSUANT TO A REGISTRATION STATEMENT, (B) TO OR
THROUGH A BROKER OR DEALER OR UNDERWRITER IN A PUBLIC DISTRIBUTION OR A PUBLIC
SECURITIES TRANSACTION, OR (C) IN A TRANSACTION EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT UNDER
SECTION 4(1) THEREOF SO THAT ALL TRANSFER RESTRICTIONS AND RESTRICTIVE LEGENDS
WITH RESPECT THERETO, IF ANY, ARE REMOVED UPON THE CONSUMMATION OF SUCH SALE;

 

(d)                                 promptly furnish to the Purchaser with
respect to the Registrable Shares registered under the Registration Statement
such reasonable number of copies of the Prospectus, including any supplements to
or amendments of the Prospectus, in order to facilitate the public sale or other
disposition of all or any of the Registrable Shares by the Purchaser;

 

(e)                                  promptly take such action as may be
necessary to qualify, or obtain, an exemption for the Registrable Shares under
such of the state securities laws of United States jurisdictions as shall be
necessary to qualify, or obtain an exemption for, the sale of the Registrable
Shares in states specified in writing by the Purchaser;  provided, however, that
the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or
has not so consented;

 

(f)                                    bear all expenses in connection with the
procedures in paragraph (a) through (c) of this Section 1.1 and the registration
of the Registrable Shares pursuant to the Registration Statement, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses (including filings
made with the NASD); (ii) fees and expenses of compliance with federal
securities and state “blue sky” or securities laws; (iii) expenses of printing
(including printing certificates for the Registrable Shares and Prospectuses);
(iv) all application and filing fees in connection with listing the Registrable
Shares on the AMEX; and (v) all fees and disbursements of counsel of the Company
and independent certified public accountants of the Company; provided, however,
that the Purchaser shall be responsible for paying the fees and disbursements
for the Purchasers’ respective counsel, the underwriting commissions or
brokerage fees, and taxes of any kind (including, without limitation, transfer
taxes) applicable to any disposition, sale or transfer of the Purchaser’s
Registrable Shares. The Company shall, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties); and

 

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(g)                                 advise the Purchasers, within two
(2) business days by e-mail, fax or other type of communication, and, if
requested by such person, confirm such advice in writing: (i) after it shall
receive notice or obtain knowledge of the issuance of any stop order by the SEC
delaying or suspending the effectiveness of the Registration Statement or of the
initiation or threat of any proceeding for that purpose, or any other order
issued by any state securities commission or other regulatory authority
suspending the qualification or exemption from qualification of such Registrable
Shares under state securities or “blue sky” laws; and it will promptly use its
commercially reasonable efforts to prevent the issuance of any stop order or
other order or to obtain its withdrawal at the earliest possible moment if such
stop order or other order should be issued; and (ii) when the Prospectus or any
supplements to or amendments of the Prospectus have been filed, and, with
respect to the Registration Statement or any post-effective amendment thereto,
when the same has become effective.

 

Section 1.2                                      Transfer of Shares; Suspension.

 

(a)                                  The Purchaser agrees that it will not
effect any disposition of the Securities or its right to purchase the
Registrable Shares that would constitute a sale within the meaning of the
Securities Act, except as contemplated in the Registration Statement referred to
in Section 1.1 or in accordance with the Securities Act, and that it will
promptly notify the Company of any changes in the information set forth in the
Registration Statement regarding the Purchaser or its plan of distribution.

 

(b)                                 Except in the event that clause (c) below
applies, the Company shall, at all times during the Registration Period,
promptly (i) prepare and file from time to time with the SEC a post-effective
amendment to the Registration Statement or a supplement to the related
Prospectus or a supplement or amendment to any document incorporated therein by
reference or file any other required document so that such Registration
Statement will not contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not misleading,
and so that, as thereafter delivered to purchasers of the Registrable Shares
being sold thereunder, such Prospectus will not 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; (ii) provide the Purchaser copies of any
documents filed pursuant to Section 1.2(b)(i); and (iii) inform the Purchaser
that the Company has complied with its obligations in Section 1.2(b)(i) (or
that, if the Company has filed a post-effective amendment to the Registration
Statement which has not yet been declared effective, the Company will notify the
Purchaser to that effect, will use its commercially reasonable  efforts to
secure the effectiveness of such post-effective amendment as promptly as
possible and will promptly notify the Purchaser pursuant to
Section 1.2(b)(iii) hereof when the amendment has become effective).

 

(c)                                  Subject to clause (d) below, in the event
of (i) any request by the SEC or any other federal or state governmental
authority during the period of effectiveness of the Registration Statement for
amendments or supplements to a Registration Statement or related

 

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Prospectus or for additional information; (ii) the issuance by the SEC or any
other federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any proceedings
for that purpose; (iii) 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 Shares for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose; or (iv) any event or
circumstance which necessitates the making of any changes in the Registration
Statement or Prospectus, or any document incorporated or deemed to be
incorporated therein by reference, so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and that in the case of the Prospectus, it
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, then the Company shall
deliver a notice in writing to the Purchaser (the “Suspension Notice”) to the
effect of the foregoing and, upon receipt of such Suspension Notice, the
Purchaser will refrain from selling any Registrable Shares pursuant to the
Registration Statement (a “Suspension”) until the Purchaser’s receipt of copies
of a supplemented or amended Prospectus prepared and filed by the Company, or
until it is advised in writing by the Company that the current Prospectus may be
used. In the event of any Suspension, the Company will use its commercially
reasonable efforts, consistent with the best interests of the Company and its
shareholders, to cause the use of the Prospectus so suspended to be resumed as
soon as reasonably practicable after the delivery of a Suspension Notice to the
Purchaser; provided, however, that the Company may on two occasions only suspend
sales pursuant to the Registration Statement for a period of up to thirty (30)
days if the Company furnishes to the holders of the Registrable Shares a
certificate signed by the Company’s Chief Executive Officer stating that in the
good faith judgment of the Company’s Board of Directors, (i) the offering would
interfere in any material respect with any acquisition, corporate reorganization
or other material transaction under consideration by the Company or (ii) there
is some other material development relating to the condition (financial or
other) of the Company that has not been disclosed to the general public and as
to which it is in the Company’s best interests not to disclose such development;
provided further, however, that the Company may not so suspend sales more than
twice in any calendar year without the written consent of the holders of at
least a majority of the then-eligible Registrable Shares consisting of
outstanding shares of Common Stock.

 

(d)                                 In the event of a sale of Registrable Shares
by the Purchaser under the Registration Statement, the Purchaser must also
deliver to the Company’s transfer agent, with a copy to the Company, a
Certificate of Subsequent Sale substantially in the form attached hereto as
Exhibit A, so that the Registrable Shares may be properly transferred.

 

Section 1.3                                      Indemnification. For the
purpose of this Section 1.3, the term “Registration Statement” shall include any
preliminary or final prospectus, exhibit, supplement or amendment included in or
relating to the Registration Statement referred to in Section 1.1 and the term
“Rules and Regulations” means the rules and regulations promulgated under the
Securities Act.

 

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(a)                                  Indemnification by the Company. The Company
agrees to indemnify and hold harmless the Purchaser and each person, if any, who
controls the Purchaser within the meaning of the Securities Act, against any
losses, claims, damages, liabilities or expenses to which the Purchaser or such
controlling person may become subject, under the Securities Act, the Exchange
Act, or any other federal or state statutory law or regulation insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof
as contemplated below) arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement, including the Prospectus, financial statements and schedules, and all
other documents filed as a part thereof, as amended at the time of effectiveness
of the Registration Statement, including any information deemed to be a
part thereof as of the time of effectiveness pursuant to paragraph (b) of
Rule 430A, or pursuant to Rule 434 of the Rules and Regulations, or the
Prospectus, in the form first filed with the Commission pursuant to
Rule 424(b) of the Regulations, or filed as part of the Registration Statement
at the time of effectiveness if no Rule 424(b) filing is required (the
“Prospectus”), or any amendment or supplement thereto (ii) the omission or
alleged omission to state in any of them a material fact required to be stated
therein or necessary to make the statements in any of them (in the case of the
Prospectus only, in light of the circumstances under which they were made), not
misleading, or (iii) any inaccuracy in the representations and warranties of the
Company contained in this Agreement, or any failure of the Company to
perform its obligations under this Agreement, and will reimburse the Purchaser
and each such controlling person for any legal and other expenses as such
expenses are reasonably incurred by the Purchaser or such controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage, liability or expense arises out of or is based upon (i) an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, the Prospectus or any amendment or
supplement of the Registration Statement or Prospectus in reliance upon and in
conformity with information furnished to the Company by or on behalf of the
Purchaser expressly for use in the Registration Statement or the Prospectus, or
(ii) the failure of the Purchaser to comply with the covenants and agreements
contained in the Purchase Agreement or this Agreement, or (iii) the inaccuracy
of any representations made by the Purchaser in this Agreement or (iv) any
untrue statement or omission of a material fact in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Purchaser
before the pertinent sale or sales by the Purchaser.

 

(b)                                 Indemnification by the Purchaser. The
Purchaser will indemnify and hold harmless the Company, each of its directors,
each of its officers who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of the Securities Act, against
any losses, claims, damages, liabilities or expenses to which the Company, each
of its directors, each of its officers who sign the Registration Statement or
controlling person may become subject, under the Securities Act, the Exchange
Act, or any other federal or state statutory law or regulation insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof
as contemplated below) arise out of or are based upon (i) any failure on the
part of the Purchaser to comply with the covenants and agreements contained in
the Purchase Agreement or this Agreement or (ii) the inaccuracy of any
representation or warranty made by the Purchaser in this Agreement or (iii) any
untrue or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement to the
Registration Statement or Prospectus, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements

 

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therein (in the case of the Prospectus only, in light of the circumstances under
which they were made), not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, the Prospectus, or
any amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Purchasers
expressly for use therein; provided, however, that the Purchaser shall not be
liable for any such untrue or alleged untrue statement or omission or alleged
omission of which the Purchaser has delivered to the Company in writing a
correction at least two (2) business days before the occurrence of the
transaction from which such loss was incurred, and the Purchaser will reimburse
the Company, each of its directors, each of its officers who signed the
Registration Statement or controlling person for any legal and other expense
reasonably incurred by the Company, each of its directors, each of its officers
who signed the Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action for which such person is entitled to be
indemnified in accordance with this Section 1.3(b).

 

(c)                                  Indemnification Procedure.

 

(i)             Promptly after receipt by an indemnified party under this
Section 1.3 of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 1.3, promptly notify the indemnifying
party in writing of the claim; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party for contribution or otherwise under the indemnity agreement
contained in this Section 1.3 except to the extent it is materially prejudiced
as a result of such failure.

 

(ii)          In case any such action is brought against any indemnified party
and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate in,
and, to the extent that it may wish, jointly with all other indemnifying parties
similarly notified, to assume the defense thereof; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be a conflict between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it or other indemnified parties that are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
assume the defense of such action, the indemnifying party will not be liable to
such indemnified party under this Section 1.3 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless:

 

(1)                                  the indemnified party shall have employed
such counsel in connection with the assumption of legal defenses in accordance
with the proviso to the preceding sentence (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by such indemnifying party representing all of the
indemnified parties who are parties to such action), or

 

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(2)                                  the indemnifying party shall not have
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of
action, in each of which cases the reasonable fees and expenses of counsel shall
be at the expense of the indemnifying party.

 

(d)                                 Contribution. If a claim for indemnification
under this Section 1.3 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 any losses, claims, damages,
liabilities or expenses referred to in this Agreement, 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, claims, damages, liabilities or expenses 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, claims, damages, liabilities or expenses shall be deemed to
include, subject to the limitations set forth in this Section 1.3, 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.

 

No party to this Agreement guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any other party to this Agreement who was not guilty of such
fraudulent misrepresentation.

 

Section 1.4                                      Termination of Conditions and
Obligations. The restrictions imposed by Article I upon the transferability of
the Registrable Shares shall cease and terminate as to any particular number of
the Registrable Shares upon the passage of two (2) years from the Closing of the
Purchase Agreement, provided, however, that with respect to the Registrable
Shares that are the Warrant Shares, the foregoing date shall be the second
anniversary of the date the relevant Warrant was exercised, or at such time as
an opinion of counsel satisfactory in form and substance to the Company shall
have been rendered to the effect that such conditions are not necessary in order
to comply with the Securities Act.

 

Section 1.5                                      Registration Default. (a) If
the Registration Statement covering  the  Registrable Shares required to be
filed by  the  Company pursuant  to  Section 1.1 is not for any reason (other
than through the fault of the Purchaser) declared effective  by  the  SEC  by 
the Effective  Date Deadline, then the Company shall make the payments  to  each
Purchaser as provided in the next sentence as liquidated damages and not  as a 
penalty. The amount to be paid by the Company to each Purchaser shall  be
determined as of each Computation Date (as

 

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defined below), and such  amount shall be equal to 1% (the “Liquidated Damage
Rate”) of the product of (i) the  per  unit  Purchase  Price  of the Units 
under  the  Purchase  Agreement and (ii) the number of shares of Registrable
Shares then  held by such Purchaser, for the period from the Effective Date
Deadline to the first Computation Date, and for each 30-day period of any
subsequent Computation Dates thereafter, in each case calculated on a pro  rata 
basis to  the  date on which the Registration Statement is declared effective 
by the SEC (the “Periodic Amount”). The full Periodic Amount shall be paid by
the Company to the Purchaser by wire transfer of immediately available funds
within  three  business days after each Computation Date or three  business
days  after  the  date  on  which the Registration  Statement  is  declared
effective by the SEC, whichever occurs earlier.

 

(b) As  used in Section 1.5(a), “Computation Date” means the date which is  30 
days  after  the Effective Date Deadline and, if  the  Registration Statement 
to  be  filed by the Company pursuant to Section  1.1 has  not theretofore been
declared effective by the SEC, each date which is 30  days after the previous
Computation Date until such Registration Statement is so declared effective.

 

ARTICLE II.

MISCELLANEOUS

 

SECTION 2.1                                      GOVERNING LAW: JURISDICTION.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
CALIFORNIA CORPORATION LAW (IN RESPECT OF MATTERS OF CORPORATION LAW) AND THE
LAWS OF THE STATE OF CALIFORNIA (IN RESPECT OF ALL OTHER MATTERS) APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF CALIFORNIA. THE PARTIES
HERETO IRREVOCABLY CONSENT TO THE JURISDICTION OF THE UNITED STATES FEDERAL
COURTS AND STATE COURTS LOCATED IN THE COUNTY OF LOS ANGELES IN THE STATE OF
CALIFORNIA IN ANY SUIT OR PROCEEDING BASED ON OR ARISING UNDER THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY AND IRREVOCABLY AGREE THAT ALL CLAIMS IN
RESPECT OF SUCH SUIT OR PROCEEDING MAY BE DETERMINED IN SUCH COURTS. THE COMPANY
AND EACH PURCHASER IRREVOCABLY WAIVES THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH SUIT OR PROCEEDING IN SUCH FORUM. THE COMPANY AND EACH
PURCHASER FURTHER AGREES THAT SERVICE OF PROCESS UPON THE COMPANY OR SUCH
PURCHASER, AS APPLICABLE, MAILED BY THE FIRST CLASS MAIL IN ACCORDANCE WITH
SECTION 2.6 SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON
THE COMPANY OR SUCH PURCHASER IN ANY SUIT OR PROCEEDING ARISING HEREUNDER.
NOTHING HEREIN SHALL AFFECT PURCHASER’S RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW. THE PARTIES HERETO AGREE THAT A FINAL NON-APPEALABLE
JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED
IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER.
THE PARTIES HERETO IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY UNDER
APPLICABLE LAW.

 

SECTION 2.2                                      COUNTERPARTS. THIS AGREEMENT
MAY BE EXECUTED IN TWO OR MORE COUNTERPARTS, INCLUDING, WITHOUT LIMITATION, BY
FACSIMILE TRANSMISSION, ALL OF WHICH COUNTERPARTS SHALL BE CONSIDERED ONE AND
THE SAME AGREEMENT AND SHALL BECOME EFFECTIVE WHEN COUNTERPARTS HAVE BEEN SIGNED
BY EACH PARTY AND DELIVERED TO EACH OTHER PARTY. IN THE EVENT ANY SIGNATURE
PAGE IS DELIVERED BY FACSIMILE TRANSMISSION, THE PARTY USING SUCH MEANS OF
DELIVERY SHALL CAUSE ADDITIONAL ORIGINAL EXECUTED SIGNATURE PAGES TO BE
DELIVERED TO THE OTHER PARTIES AS SOON AS PRACTICABLE THEREAFTER.

 

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Section 2.3                                      Headings. The headings of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement.

 

Section 2.4                                      Severability. 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 or the validity or enforceability of this
Agreement in any other jurisdiction.

 

Section 2.5                                      Entire Agreement; Amendments.
This Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the maters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor any Purchaser makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
waived other than by an instrument in writing signed by the party to be charged
with enforcement and no provision of this Agreement may be amended other than by
an instrument in writing signed by the Company and each Purchaser.

 

SECTION 2.6                                      NOTICES. NOTICES SHALL BE
DELIVERED IN ACCORDANCE WITH THE PURCHASE AGREEMENT.

 

Section 2.7                                      Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns. Neither the Company nor any Purchaser shall assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the other. Notwithstanding the foregoing, each Purchaser may assign
its rights and obligations hereunder to any of its “affiliates,” as that term is
defined under the Securities Act, without the consent of the Company so long as
such affiliate is an accredited investor (within the meaning of Regulation D
under the Securities Act) and agrees in writing to be bound by this Agreement.
This provision shall not limit each Purchaser’s right to transfer the Securities
pursuant to the terms of this Agreement or to assign such Purchaser’s rights
hereunder to any such transferee. In that regard, if a Purchaser sells all or
part of its Common Shares to someone that acquires the shares subject to
restrictions on transferability (other than restrictions, if any, arising out of
the transferee’s status as an affiliate of the Company), such Purchaser shall be
permitted to assign its rights hereunder, in whole or in part, to such
transferee.

 

Section 2.8                                      Third Party Beneficiaries. This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.

 

[Signature page to follow]

 

9

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IN WITNESS WHEREOF, the undersigned Purchasers and the Company have caused this
Agreement to be duly executed as of the date first above written.

 

COMPANY:

 

 

ASPYRA, INC.

 

 

By:

/s/ Steven M. Besbeck

 

 

Name:

Steven M. Besbeck

 

Title:

President and Chief Executive Officer

 

 

PURCHASERS:

 

 

 

 

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

10

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Schedule 1
to
Registration Rights Agreement

 

LIST OF PURCHASERS

 

Purchasers

 

Shares of Common Stock

 

Warrant Shares

 

Aggregate
Purchase Price

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Totals:

 

 

 

 

 

 

 

 

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Schedule 2
to
Registration Rights Agreement

 

REGISTRATION STATEMENT QUESTIONNAIRE

 

To:                              Aspyra, Inc.

c/o Joseph E. Nida Esq.

Sheppard Mullin Richter & Hampton, LLP

800 Anacapa Street

Santa Barbara, CA 93101

 

Reference is made to the Registration Rights Agreement (the “Agreement”), made
between Aspyra, Inc., a California corporation (the “Company”), and the
Purchasers noted therein.

 

The undersigned hereby furnishes to the Company the following information for
use by the Company in connection with the preparation of the Registration
Statement contemplated by Section 1 of the Agreement.

 

(1)                                 Name and Contact Information:

 

 

Full legal name of record holder:

 

 

 

 

 

Address of record holder:

 

 

 

 

 

 

 

 

 

 

 

Social Security Number or Taxpayer identification number of record holder:

 

 

 

 

 

Identity of beneficial owner (if different than record holder):

 

 

 

 

 

Name of contact person:

 

 

 

 

 

Telephone number of contact person:

 

 

 

 

 

Fax number of contact person:

 

 

 

 

 

E-mail address of contact person:

 

 

2

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(2)                                 Beneficial Ownership of Registrable Shares:

 

 

(a)  Number of Registrable Shares owned by Selling Shareholder:

 

 

 

 

 

 

 

 

(b)  Number of Registrable Shares requested to be registered:

 

 

 

 

 

 

 

 

(3)                                 Beneficial Ownership of Other Securities of
the Company Owned by the Selling Shareholder:

 

 

Except as set forth below in this Item (3), the undersigned is not the
beneficial or registered owner of any securities of the Company other than the
Registrable Shares listed above in Item (2)(a).

 

 

 

 

Type and amount of other securities beneficially owned by the Selling
Shareholder:

 

 

 

 

 

 

 

 

(4)                                 Relationships with the Company:

 

 

Except as set forth below, neither the undersigned nor any of its affiliates,   
officers, directors or principal equity holders (5% or more) has held any
position or office or has had any other material relationship with the Company
(or its predecessors or affiliates) during the past three years.

 

 

 

 

 

 

State any exceptions here:

 

 

 

 

(5)                                 Selling Shareholder Affiliations:

 

 

(a)                                  Is the Selling Shareholder a registered
broker-dealer?

 

 

 

 

 

 

 

(b)                                 Is the Selling Shareholder an affiliate of a
registered broker-dealer(s)? (For purposes of this response, an “affiliate” of,
or person “affiliated” with, a specified person, is a person that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, the person specified.)

 

 

 

 

 

3

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(c)                                  If the answer to Item (6)(b) is yes,
identify the registered broker-dealer(s) and describe the nature of the
affiliation(s):

 

 

 

 

 

(d)                                 If the answer to Item (6)(b) is yes, did the
Selling Shareholder acquire the Registrable Shares in the ordinary course of
business (if not, please explain)?

 

 

 

 

 

(e)                                  If the answer to Item (6)(b) is yes, did
the Selling Shareholder, at the time of purchase of the Registrable Shares, have
any agreements, plans or understandings, directly or indirectly, with any person
to distribute the Registrable Shares (if yes, please explain)?

 

 

 

(6)                                 Voting or Investment Control over the
Registrable Shares:

 

 

If the Selling Shareholder is not a natural person, please identify the natural
person or persons who have voting or investment control over the Registrable
Shares listed in Item (2) above:

 

 

Pursuant to the Agreement, the undersigned acknowledges that the Company may, by
notice to the Placement Agent, suspend or withdraw the Registration Statement
and require that the undersigned immediately cease sales of Registrable Shares
pursuant to the Registration Statement under certain circumstances described in
the Agreement. At any time that such notice has been given, the undersigned
may not sell Registrable Shares pursuant to the Registration Statement.

 

By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items (1) through (6) above and the inclusion
of such information in the Registration Statement, any amendments thereto and
the related prospectus. The undersigned understands that such information will
be relied upon by the Company in connection with the preparation or amendment of
the Registration Statement and the related prospectus.

 

The undersigned has reviewed the answers to the above questions and affirms that
the same are true, complete and accurate. THE UNDERSIGNED AGREES TO NOTIFY THE
COMPANY IMMEDIATELY OF ANY CHANGES IN THE FOREGOING INFORMATION.

 

 

 

 

Dated:

 

, 2006

 

 

 

 

 

 

 

Signature of Record Holder
(Please sign your name in exactly the same
manner as the certificate(s) for the shares being
registered)

 

 

 

4

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Exhibit A

 

CERTIFICATE OF SUBSEQUENT SALE

 

AMERICAN STOCK TRANSFER & TRUST COMPANY

 

 

RE:                              Sale of Shares of Common Stock of Aspyra, Inc.
(the “Company”) pursuant to the Company’s Prospectus dated                      
(the “Prospectus”)

 

Ladies and Gentlemen:

 

The undersigned hereby certifies, in connection with the sale of shares of
Common Stock of the Company included in the table of Selling Shareholders in the
Prospectus, that the undersigned has sold the shares pursuant to the Prospectus
and in a manner described under the caption  “Plan of Distribution” in the
Prospectus and that such sale complies with all applicable securities laws,
including, without limitation, the Prospectus delivery requirements of the
Securities Act of 1933, as amended.

 

Selling Shareholder (the beneficial owner):

Record Holder (e.g., if held in name of nominee):

Restricted Stock Certificate No.(s):

Number of Shares Sold:

Date of Sale:

 

In the event that you receive a stock certificate(s) representing more shares of
Common Stock than have been sold by the undersigned, then you should return to
the undersigned a newly issued certificate for such excess shares in the name of
the Record Holder and BEARING A RESTRICTIVE LEGEND. Further, you should place a
stop transfer on your records with regard to such certificate.

 

Very truly yours,

 

 

Dated:

 

 

 

By:

Print Name: 

Title:

cc:

 

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