Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of August 7, 2019, by
and among Stereotaxis, Inc., a Delaware corporation, with principal office
located at 4320 Forest Park Avenue, Suite 100, St. Louis, MO 63108 (the
“Company”), and the undersigned buyers (each, a “Buyer” and, collectively, the
“Buyers”).

 

WHEREAS:

 

A. In connection with the Securities Purchase Agreement by and among the parties
dated as of August 7, 2019 (the “Securities Purchase Agreement”), the Company
has agreed, upon the terms and subject to the conditions of the Securities
Purchase Agreement, to issue and sell to the Buyers at the Closing (as defined
in the Securities Purchase Agreement) (i) an aggregate of 6,585,000 shares (the
“Shares”) of the Company’s common stock, par value $0.001 per share (the “Common
Stock”) and (ii) an aggregate of 5,610,121 shares (the “Preferred Shares”) of
the Company’s Series B Convertible Preferred Stock, par value $0.001 per share
(the “Series B Preferred Stock”) which is convertible into shares of Common
Stock (the shares issuable upon conversion of the Preferred Shares are referred
to as the “Conversion Shares”).

 

B. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, contemporaneously with the execution of the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, or any similar successor statutes, and
the rules and regulations thereunder (collectively, the “1933 Act”).

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the Buyers
hereby agree as follows:

 

1. DEFINITIONS. As used in this Agreement, the following terms shall have the
following meanings:

 

a. “1934 Act” means, collectively, the Securities and Exchange Act of 1934, as
amended, and the rules and regulations thereunder, or any similar successor
statutes.

 

b. “Business Day” means any day other than Saturday, Sunday or any other day on
which commercial banks in the City of New York are authorized or required by law
to remain closed.

 

c. “Cutback Effectiveness Date” means the date a Cutback Registration Statement
is declared effective by the SEC.

 

d. “Cutback Filing Deadline” means, if Cutback Shares are required to be
included in a Cutback Registration Statement, the date that is the earlier of
(i) the later of (A) six (6) months from the Initial Effectiveness Date or the
then-most recent Cutback Effectiveness Date, as applicable, and (B) sixty (60)
days after the Company has been informed that substantially all of the
Registrable Securities held by the Investors included in any Registration
Statements previously declared effective hereunder have been sold in accordance
therewith, or (ii) the first date on which the Company is then permitted by the
SEC to register such Cutback Shares.

 

e. “Cutback Registrable Securities” means, (i) any Cutback Shares not previously
included in a Registration Statement, and (ii) any shares of capital stock of
the Company issued or issuable with respect to such Cutback Shares, as
applicable, as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise, without regard to any limitations on the
conversion of the Preferred Shares; provided, however, that any Cutback
Registrable Securities shall cease to be Cutback Registrable Securities when (x)
a Registration Statement with respect to the sale of such securities has become
effective under the 1933 Act and such securities are disposed of in accordance
with such Registration Statement, or (y) such securities are sold in accordance
with Rule 144, or (z) all of such securities are eligible to be sold by the
holder thereof pursuant to Rule 144 without limitation, restriction or condition
(including any current public information requirement) thereunder.

 

 

 

 

f. “Cutback Registration Statement” means a registration statement or
registration statements of the Company filed under the 1933 Act covering any
Cutback Registrable Securities (which shall include, at any particular time,
each document incorporated or deemed to be incorporated by reference therein).

 

g. “Cutback Required Registration Amount” means the lesser of (i) any Cutback
Shares not previously included in a Registration Statement, and (ii) such number
of Registrable Securities as the Company is then permitted by the SEC to
register pursuant to Rule 415.

 

h. “Cutback Shares” means, at any time on or after the Initial Effectiveness
Date, any of the Registrable Securities not included in all Registration
Statements previously declared effective hereunder as a result of a limitation
on the maximum number of shares of Common Stock permitted by the SEC to be
registered pursuant to Rule 415.

 

i. “Effectiveness Date” means the Initial Effectiveness Date or a Cutback
Effectiveness Date, as applicable.

 

j. “Effectiveness Deadline” means the Initial Effectiveness Deadline, a Cutback
Effectiveness Deadline or a Subsequent Effectiveness Deadline, as applicable.

 

k. “Filing Deadline” means the Initial Filing Deadline, a Cutback Filing
Deadline or a Subsequent Filing Deadline, as applicable.

 

l. “Governmental Authority” means the government of the United States of America
or the government of any other nation, or any political subdivision thereof,
whether state, provincial or local, or any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administration powers or functions
of or pertaining to government over the Company or any of its subsidiaries, or
any of their respective properties, assets or undertakings.

 

m. “Initial Effectiveness Date” means the date the Initial Registration
Statement is declared effective by the SEC.

 

n. “Initial Effectiveness Deadline” means the date that is the later of sixty
(60) days after the Initial Filing Date and ninety (90) days after the Closing
Date, unless the Required Holders agree in writing to extend such deadline at
the Company’s request.

 

o. “Initial Filing Date” means the date on which the Initial Registration
Statement is filed with the SEC.

 

p. “Initial Filing Deadline” means the date that is forty-five (45) days after
the Closing Date.

 

q. “Initial Registration Statement” means a Registration Statement or
Registration Statements filed under the 1933 Act pursuant to Section 2(a) hereof
covering the Registrable Securities (which shall include, at any particular
time, each document incorporated or deemed to be incorporated by reference
therein).

 

r. “Initial Required Registration Amount” means the lesser of (i) 100% of the
Registrable Securities as of the trading day immediately preceding the
applicable date of determination, without regard to any limitations on the
conversion of the Preferred Shares, or (ii) such maximum number of Registrable
Securities as the Company is then permitted to register by the SEC.

 

s. “Investor” means a Buyer or any transferee or assignee thereof to whom a
Buyer assigns its rights under this Agreement and who agrees to become bound by
the provisions of this Agreement in accordance with Section 9 and such a
transferee or assignee thereof to whom a transferee or assignee assigns its
rights under this Agreement and who agrees to become bound by the provisions of
this Agreement in accordance with Section 9.

 

t. “Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization, a
government or any department or agency thereof, or any other legal entity.

 

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u. “Register,” “registered,” and “registration” refer to a registration effected
by preparing and filing one or more Registration Statements in compliance with
the 1933 Act and pursuant to Rule 415 and the declaration or ordering of
effectiveness of such Registration Statement(s) by the SEC.

 

v. “Registrable Securities” means (i) the Shares; (ii) the Conversion Shares
issued or issuable upon conversion of the Preferred Shares and (iii) any shares
of capital stock of the Company issued or issuable with respect to, in exchange
for, or upon the exercise or conversion of the Shares, the Preferred Shares or
the Conversion Shares, as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, without regard to any
limitations on the conversion of the Preferred Shares.

 

w. “Registration Statement” means a registration statement or registration
statements of the Company filed under the 1933 Act covering Registrable
Securities (which shall include, at any particular time, each document
incorporated or deemed to be incorporated by reference therein).

 

x. “Required Holders” means the holders of a majority of the Registrable
Securities; provided that a Person shall be deemed, for this purpose, to hold
any Registrable Securities issuable upon conversion of any Preferred Shares held
by such Person, without regard to any limitations on conversion of the Preferred
Shares.

 

y. “Required Registration Amount” means either the Initial Required Registration
Amount or a Cutback Required Registration Amount, as applicable.

 

z. “Rule 144” means Rule 144 under the 1933 Act or any successor rule.

 

aa. “Rule 415” means Rule 415 under the 1933 Act or any successor rule providing
for offering securities on a continuous or delayed basis.

 

bb. “SEC” means the United States Securities and Exchange Commission.

 

Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement.

 

2. REGISTRATION.

 

a. Initial Mandatory Registration. The Company shall prepare, and, as soon as
reasonably practicable, but in no event later than the Initial Filing Deadline,
file with the SEC a Registration Statement on Form S-1 (or on Form S-3, if Form
S-3 is then available for the registration of the resale of Registrable
Securities hereunder) covering the resale of the Registrable Securities. The
Initial Registration Statement prepared pursuant hereto shall register for
resale at least the number of Registrable Securities equal to the Initial
Required Registration Amount determined as of the date the Initial Registration
Statement is initially filed with the SEC (subject to subsequent reduction if
directed by the staff of the SEC). The Company shall use best efforts to have
the Initial Registration Statement declared effective by the SEC as soon as
reasonably practicable, but in no event later than the Initial Effectiveness
Deadline.

 

b. Cutback Mandatory Registrations. The Company shall prepare, and, as soon as
reasonably practicable, but in no event later than each Cutback Filing Deadline,
file with the SEC a Cutback Registration Statement on Form S-1 (or on Form S-3,
if Form S-3 is then available for the registration of the resale of Registrable
Securities hereunder) covering the resale of the number of Cutback Registrable
Securities equal to the Cutback Required Registration Amount. To the extent the
staff of the SEC does not permit all of the Cutback Registrable Securities to be
registered on a Cutback Registration Statement, the Company shall file Cutback
Registration Statements successively trying to register on each such Cutback
Registration Statement the maximum number of remaining Cutback Registrable
Securities until all of the Cutback Registrable Securities have been registered
with the SEC. Each Cutback Registration Statement prepared pursuant hereto shall
register for resale at least that number of shares of Common Stock equal to the
Cutback Required Registration Amount as of the date such Cutback Registration
Statement is initially filed with the SEC. The Company shall use best efforts to
have each Cutback Registration Statement declared effective by the SEC as soon
as reasonably practicable following the filing thereof, but in no event later
than sixty (60) days following the filing thereof (a “Cutback Effectiveness
Deadline”).

 

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c. Allocation of Registrable Securities. The number of Registrable Securities
included in any Registration Statement shall be allocated pro rata among the
Investors based on the number of Registrable Securities held by each Investor
that are to be included in such Registration Statement (without giving effect to
any limitations imposed by the SEC). In the event that an Investor sells or
otherwise transfers any of such Investor’s Registrable Securities, each
transferee shall be allocated a pro rata portion of the then remaining number of
Registrable Securities included in such Registration Statement for such
transferor. Any Registrable Securities included in a Registration Statement and
which remain allocated to any Person that ceases to hold any Registrable
Securities covered by such Registration Statement shall be allocated to the
remaining Investors, pro rata based on the number of Registrable Securities then
held by such Investors which are covered by such Registration Statement. For
purposes hereof, the number of Registrable Securities held by an Investor
includes all Registrable Securities issuable upon conversion of Preferred Shares
held by such Investor, without regard to any limitation on the conversion of the
Preferred Shares. In no event shall the Company include any securities other
than Registrable Securities in any Registration Statement without the prior
written consent of the Required Holders.

 

d. Legal Counsel. The Required Holders shall have the right to select one legal
counsel to review and oversee any registration pursuant to this Section 2, which
legal counsel shall be reasonably acceptable to the Company (“Legal Counsel”).
The Company shall reasonably cooperate with Legal Counsel in performing the
Company’s obligations under this Agreement.

 

e. Ineligibility for Form S-3. In the event that Form S-3 is not available for
the registration of the resale of any Registrable Securities hereunder, the
Company shall (i) register the resale of the Registrable Securities on Form S-1
or another appropriate form reasonably acceptable to the Required Holders and
provide that any Registration Statement on Form S-1 filed hereunder shall
incorporate documents by reference (including by way of forward incorporation by
reference) to the maximum extent possible and (ii) undertake to register the
Registrable Securities on Form S-3 as soon as such form is available, provided
that the Company shall maintain the effectiveness of the Registration Statement
then in effect until such time as a Registration Statement on Form S-3 covering
the Registrable Securities has been declared effective by the SEC.

 

f. Sufficient Number of Shares Registered. In the event the number of shares
available under a Registration Statement filed pursuant to Section 2(a) or
Section 2(b) is insufficient to cover all of the Registrable Securities required
to be covered by such Registration Statement or an Investor’s allocated portion
of the Registrable Securities pursuant to Section 2(c), the Company shall
promptly inform each Investor whose Registrable Securities are not fully covered
by such Registration Statement and, as soon as reasonably practicable, but in
any event (other than with respect to Cutback Shares) not later than twenty (20)
days after the necessity therefor arises, or (if later) the first date on which
the Company is then permitted to file such Registration Statement by the SEC (a
“Subsequent Filing Deadline”) amend the applicable Registration Statement, or
file a new Registration Statement (on the short form available therefor, if
applicable), or both, so as to cover Registrable Securities consisting of at
least that number of shares of Common Stock equal to 100% of the number of
Registrable Securities as of the trading day immediately preceding the date of
the filing of such amendment or new Registration Statement. The Company shall
use best efforts to cause such amendment and/or new Registration Statement to
become effective as soon as reasonably practicable following the filing thereof,
but in any event (other than with respect to Cutback Shares) not later than
sixty (60) days following the filing thereof (a “Subsequent Effectiveness
Deadline”). For purposes of the foregoing provision, the number of shares
available under a Registration Statement shall be deemed “insufficient to cover
all of the Registrable Securities” if as of any date of determination, the
number of shares of Common Stock available for resale under the Registration
Statement is less than 100% of the number of Registrable Securities. The
calculation set forth in the foregoing sentence shall be made without regard to
any limitations on the conversion of the Preferred Shares.

 

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g. Effect of Failure to File and Obtain and Maintain Effectiveness of
Registration Statement.

 

i. If (A) a Registration Statement covering Registrable Securities and required
to be filed by the Company pursuant to Section 2(a), Section 2(b) or Section
2(f) of this Agreement is not (I) filed with the SEC on or before the applicable
Filing Deadline (a “Filing Failure”) or (II) declared effective by the SEC on or
before the applicable Effectiveness Deadline (an “Effectiveness Failure”) or (B)
on any day after a Registration Statement has been declared effective by the
SEC, sales of all the Registrable Securities required to be included on such
Registration Statement cannot be made (other than during an Allowable Grace
Period (as defined in Section 3(s))) pursuant to such Registration Statement
(including because of a failure to keep the such Registration Statement
effective, to disclose such information as is necessary for sales to be made
pursuant to such Registration Statement or to register sufficient shares of
Common Stock, as determined in accordance with Section 2(f)) (a “Maintenance
Failure,” and each of a Filing Failure, an Effectiveness Failure and a
Maintenance Failure being referred to as a “Registration Default”), then the
Company shall pay, as partial liquidated damages (but not as a penalty) to any
holder of Shares or Preferred Shares by reason of any such delay in or reduction
of its ability to sell its Shares or Conversion Shares, as applicable (which
remedy shall not be exclusive of any other remedies available at law or in
equity), an amount in cash equal to one percent (1.0%) of the aggregate purchase
price paid pursuant to the Securities Purchase Agreement for such holder’s
Registrable Securities required to be included in such Registration Statement on
each of the following dates: (1) the initial day of a Filing Failure and on
every thirtieth (30th) day (prorated for periods totaling less than thirty (30)
days) thereafter until such Filing Failure is cured; (2) the initial day of an
Effectiveness Failure and on every thirtieth (30th) day (prorated for periods
totaling less than thirty (30) days) thereafter until such Effectiveness Failure
is cured; and (3) the initial day of a Maintenance Failure and on every
thirtieth (30th) day (prorated for periods totaling less than thirty (30) days)
thereafter until such Maintenance Failure is cured.

 

ii. The payments to which a holder shall be entitled pursuant to this Section
2(g) are referred to herein as “Registration Delay Payments.” Registration Delay
Payments shall be paid on the earlier of (A) the dates set forth above and (B)
the third (3rd) Business Day after the event or failure giving rise to the
Registration Delay Payments is cured. In the event the Company fails to make
Registration Delay Payments in a timely manner, such Registration Delay Payments
shall bear interest at the rate of the lesser of one percent (1.0%) per month
(prorated for partial months) or the highest lawful interest rate, in each case,
until paid in full.

 

3. RELATED OBLIGATIONS. At such time as the Company is obligated to file a
Registration Statement with the SEC pursuant to Section 2(a), Section 2(b) or
Section 2(f), the Company will use best efforts to effect the registration of
the Registrable Securities in accordance with the intended method of disposition
thereof and, pursuant thereto, the Company shall have the following obligations:

 

a. The Company shall promptly prepare and file with the SEC a Registration
Statement with respect to the applicable Registrable Securities (but in no event
later than the applicable Filing Deadline) and use best efforts to cause such
Registration Statement relating to the Registrable Securities to become
effective as soon as reasonably practicable after such filing (but in no event
later than the applicable Effectiveness Deadline). The Company shall use best
efforts to keep each Registration Statement effective pursuant to Rule 415 at
all times until the earlier of (i) the date as of which all of the Investors may
sell all of the Registrable Securities covered by such Registration Statement
pursuant to Rule 144 without limitation, restriction or condition (including any
current public information requirement) thereunder, and (ii) the date on which
the Investors have sold all of the Registrable Securities covered by such
Registration Statement in accordance with such Registration Statement or
pursuant to Rule 144 (the “Registration Period”). Such Registration Statement
shall contain a “plan of distribution” approved by the holders of a majority of
the Registrable Securities included therein. Such Registration Statement
(including any amendments or supplements thereto and any prospectuses
(preliminary, final, summary or free writing) contained therein or related
thereto shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein, or necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading. No later than the second Business Day after such Registration
Statement becomes effective, the Company will file with the SEC the final
prospectus included therein pursuant to Rule 424 (or successor thereto)
promulgated under the 1933 Act. The term “best efforts” shall mean, among other
things, (i) that the Company shall submit to the SEC, within two (2) Business
Days after the Company is notified by the SEC that such Registration Statement
will not be reviewed or will not be subject to further review, a request for
acceleration of effectiveness of such Registration Statement to a time and date
not later than two (2) Business Days after the submission of such request and
(ii) the Company shall, subject to Section 3(c), respond in writing to comments
made by the SEC in respect of a Registration Statement as soon as practicable,
but in no event later than ten (10) days after the receipt of comments by or
notice from the SEC that an amendment is required in order for a Registration
Statement to be declared effective.

 

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b. The Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be
necessary to keep such Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities of the
Company covered by such Registration Statement until such time as all of such
Registrable Securities shall have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as set forth in
such Registration Statement. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company filing a
report on Form 8-K, Form 10-Q, Form 10-K or any analogous report under the 1934
Act, the Company shall have incorporated such report by reference into such
Registration Statement, if applicable, or shall file such amendments or
supplements with the SEC within one Business Day after the 1934 Act report is
filed which created the requirement for the Company to amend or supplement such
Registration Statement. The Company shall promptly notify Legal Counsel and each
Investor who holds Registrable Securities of any request by the SEC or any other
Governmental Authority, during the period of effectiveness of a Registration
Statement, for amendments or supplements to such Registration Statement or
related prospectus or for additional information.

 

c. The Company shall (A) permit Legal Counsel to review and comment upon (i) the
Initial Registration Statement at least five (5) Business Days prior to its
filing with the SEC, and (ii) all other Registration Statements and all
amendments and supplements to all Registration Statements (except for annual
reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on
Form 8-K, and any similar or successor reports) within a reasonable number of
days prior to their filing with the SEC, and (B) not file any document,
Registration Statement, amendment or supplement described in the foregoing
clause (A) in a form to which Legal Counsel reasonably objects. The Company
shall not submit a request for acceleration of the effectiveness of a
Registration Statement or any amendment or supplement thereto without providing
prior notice thereof to Legal Counsel. The Company shall promptly furnish to
Legal Counsel, without charge, (i) copies of any correspondence from the SEC to
the Company or its representatives relating to any Registration Statement, (ii)
unless the following are filed with the SEC through EDGAR and are available to
the public through the EDGAR system, promptly after the same is prepared and
filed with the SEC, one copy of any Registration Statement and any amendment(s)
thereto, including financial statements and schedules, all documents
incorporated therein by reference, if requested by an Investor, and all exhibits
and (iii) unless the following are filed with the SEC through EDGAR and are
available to the public through the EDGAR system, upon the effectiveness of any
Registration Statement, one copy of the prospectus included in such Registration
Statement and all amendments and supplements thereto. The Company shall permit
Legal Counsel, upon request, to review and comment upon the Company’s responses
to any such correspondence and shall not submit any such responses in a form to
which Legal Counsel reasonably objects. The Company shall reasonably cooperate
with Legal Counsel in performing the Company’s obligations pursuant to this
Section 3.

 

d. The Company shall furnish to each Investor, upon request, without charge,
such documents, including copies of any prospectus (preliminary, final, summary
or free writing), as such Investor may reasonably request from time to time in
order to facilitate the disposition of the Registrable Securities owned by such
Investor.

 

e. The Company shall use best efforts to (i) register and qualify, unless an
exemption from registration and qualification applies, the resale by the
Investors of the Registrable Securities covered by a Registration Statement
under the securities or “blue sky” laws of all applicable jurisdictions in the
United States, (ii) prepare and file in those jurisdictions, such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions
or obtain exemptions from the registration and qualification requirements of
such jurisdictions; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (x) qualify to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(e), (y) subject itself to general taxation in any jurisdiction,
or (z) file a general consent to service of process in any jurisdiction in which
it is not currently so qualified or subject to general taxation or has not
currently so consented. The Company shall promptly notify Legal Counsel and each
Investor who holds Registrable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or qualification
(or exemption from qualification) of any of the Registrable Securities for sale
under the securities or “blue sky” laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.

 

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f. The Company shall notify Legal Counsel and each Investor who holds
Registrable Securities of the happening of any event, as promptly as reasonably
practicable after becoming aware of such event but in any event no later than
the next Trading Day, as a result of which, in the case of a Registration
Statement, it includes an untrue statement of a material fact or omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and, in the case of the prospectus included in
a Registration Statement, it includes an untrue statement of a material fact or
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (provided that the Company shall not disclose any
material non-public information to any Investor in any such notice unless
otherwise requested in writing by such Investor), and, subject to Section 3(s),
promptly prepare and file with the SEC a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and deliver
a copy of such supplement or amendment to Legal Counsel and each Investor (or
such other number of copies as Legal Counsel or such Investor may reasonably
request). The Company shall also promptly notify Legal Counsel and each Investor
in writing (i) when a prospectus or any prospectus supplement or post-effective
amendment has been filed, and when a Registration Statement or any
post-effective amendment has become effective (notification of such
effectiveness shall be delivered to Legal Counsel and each Investor by facsimile
or email on the same day of such effectiveness and by overnight mail), (ii) of
any request by the SEC for amendments or supplements to a Registration Statement
or related prospectus or related information and (iii) of the Company’s
reasonable determination that a post-effective amendment to a Registration
Statement would be appropriate. By 9:30 a.m. New York City time on the date
following the date any post-effective amendment has become effective, the
Company shall file with the SEC in accordance with Rule 424 under the 1933 Act
the final prospectus to be used in connection with sales pursuant to such
Registration Statement.

 

g. The Company shall use best efforts to prevent the issuance of any stop order
or other suspension of effectiveness of a Registration Statement (other than
during an Allowable Grace Period, as defined below), or the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
and, if such an order or suspension is issued, to obtain the withdrawal of such
order or suspension at the earliest possible time and to notify Legal Counsel
and each Investor who holds Registrable Securities being sold of the issuance of
such order or suspension and the resolution thereof or its receipt of actual
notice of the initiation or threat of any proceeding for such purpose.

 

h. If any Investor is required under applicable securities laws to be described
in the Registration Statement as an underwriter or an Investor believes that it
could reasonably be deemed to be an underwriter of Registrable Securities, at
the reasonable request of such Investor, the Company shall furnish to such
Investor, on the date of the effectiveness of the Registration Statement and
thereafter from time to time on such dates as an Investor may reasonably request
(i) a letter, dated such date, from the Company’s independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the Investors, and (ii) an opinion, dated as of such date, of
counsel representing the Company for purposes of such Registration Statement, in
form, scope and substance as is customarily given in an underwritten public
offering, addressed to the Investors.

 

i. At the reasonable request (in the context of applicable securities laws) of
any Investor, the Company shall make available for inspection by (A) such
Investor, (B) Legal Counsel and (C) one firm of accountants or other agents
retained by the Investors (collectively, the “Inspectors”), all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the “Records”), as shall be reasonably deemed
necessary by each Inspector, and cause the Company’s officers, directors and
employees to supply all information which any Inspector may reasonably request;
provided, however, that each Inspector shall agree to hold in strict confidence
and shall not make any disclosure (except to an Investor) or use of any Record
or other information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless
(a) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement or is otherwise required
under the 1933 Act, (b) the release of such Records is ordered pursuant to a
final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
Agreement. Each Investor agrees that it shall, upon learning that disclosure of
such Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing herein (or in any other confidentiality agreement between
the Company and any Investor) shall be deemed to limit the Investors’ ability to
sell Registrable Securities in a manner which is otherwise consistent with
applicable laws and regulations.

 

 7 

 

 

j. The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or a final, non-appealable
order from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this Agreement or any other agreement. The Company
agrees that it shall, upon learning that disclosure of such information
concerning an Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt written notice to
such Investor and allow such Investor, at the Investor’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.

 

k. The Company shall use best efforts to (i) cause all the Registrable
Securities covered by a Registration Statement to be listed on each securities
exchange or trading market on which securities of the same class or series
issued by the Company are listed and (ii) without limiting the generality of the
foregoing, arrange for at least one market maker to register with the Financial
Industry Regulatory Authority (“FINRA”) as such with respect to such Registrable
Securities. For the avoidance of doubt, the Company shall pay all fees and
expenses in connection with satisfying its obligation under this Section 3(j).

 

l. The Company shall cooperate with the Investors that hold Registrable
Securities being offered and the underwriters, if any, and, to the extent
applicable, facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such certificates to be
in such names and denominations or amounts, as the case may be, and/or the
timely issuance of the Registrable Securities to be offered pursuant to a
Registration Statement through the Direct Registration System (DRS) of The
Depository Trust Company (the “DTC”) or crediting of the Registrable Securities
to be offered pursuant to a Registration Statement to the applicable account (or
accounts) with DTC through its Deposit/Withdrawal At Custodian (DWAC) system, in
any such case as each Investor may reasonably request.

 

m. The Company shall provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of the applicable
Registration Statement.

 

n. If requested by an Investor, the Company shall (i) as soon as reasonably
practicable, incorporate in a prospectus supplement or post-effective amendment
such information as such Investor requests to be included therein relating to
the sale and distribution of Registrable Securities, including information with
respect to such Investor, the number of Registrable Securities being offered or
sold, the purchase price being paid therefor and any other terms of the offering
of the Registrable Securities to be sold in such offering; (ii) as soon as
reasonably practicable, make all required filings of such prospectus supplement
or post-effective amendment after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
(iii) as soon as reasonably practicable, supplement or amend any Registration
Statement as reasonably requested by such Investor.

 

o. The Company shall use its best efforts to cause the Registrable Securities
covered by a Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to consummate the
disposition of such Registrable Securities.

 

p. The Company shall make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with, and in the
manner provided by, the provisions of Rule 158 under the 1933 Act) covering a
twelve-month period beginning not later than the first day of the Company’s
fiscal quarter next following the applicable Effective Date of a Registration
Statement.

 

 8 

 

 

q. The Company shall otherwise use best efforts to comply with all applicable
rules and regulations of the SEC in connection with any registration hereunder.

 

r. Within two (2) Business Days after a Registration Statement which covers
applicable Registrable Securities is declared effective by the SEC, the Company
shall deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investors
whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by the
SEC, provided that if the Company changes its transfer agent, it shall
immediately deliver any previously delivered notices under this Section 3(o) and
any subsequent notices to such new transfer agent.

 

s. To the extent not made by the underwriters in the case of an underwritten
offering, the Company shall make such filings with FINRA pursuant to FINRA Rule
5110 or otherwise (including providing all required information and paying
required fees thereto), as and when requested by any Investor, or in the case of
an underwritten offering, by any underwriter, and make all other filings and
take all other actions reasonably necessary to expedite and facilitate the
disposition by the Investors of Registrable Securities pursuant to a
Registration Statement, including promptly responding to any comments received
from FINRA.

 

t. Notwithstanding anything to the contrary in Section 3(f), at any time
commencing after the effective date of the applicable Registration Statement
during the Registration Period, the Company may delay the disclosure of material
non-public information concerning the Company the disclosure of which at the
time is not, in the good faith opinion of the Board of Directors of the Company
and its counsel, in the best interest of the Company and not, in the opinion of
counsel to the Company, otherwise required (a “Grace Period”); provided, that
the Company shall (i) promptly notify the Investors in writing of the existence
of material non-public information giving rise to a Grace Period (provided that
the Company shall not disclose the content of such material non-public
information to any Investor in any such notice unless otherwise requested in
writing by such Investor) and the date on which the Grace Period will begin, and
(ii) as soon as such date may be determined, promptly notify the Investors in
writing of the date on which the Grace Period ends; and, provided, further, that
(A) no Grace Period shall exceed thirty (30) consecutive days, (B) during any
three hundred sixty-five (365) day period, such Grace Periods shall not exceed
an aggregate of sixty (60) days, and (C) the first day of any Grace Period must
be at least ten (10) trading days after the last day of any prior Grace Period
(each Grace Period that satisfies all of the requirements of this Section 3(s)
being referred to as an “Allowable Grace Period”). For purposes of determining
the length of a Grace Period above, the Grace Period shall begin on and include
the date the Investors receive the notice referred to in clause (i) and shall
end on and include the later of the date the Investors receive the notice
referred to in clause (ii) and the date referred to in such notice. The
provisions of Section 3(f) hereof shall not be applicable during the period of
any Allowable Grace Period. Upon expiration of the Grace Period, the Company
shall again be bound by the first sentence of Section 3(f) with respect to the
information giving rise thereto unless such material non-public information is
no longer applicable. Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to deliver unlegended shares of Common Stock to a
transferee of an Investor in accordance with the Securities Purchase Agreement
in connection with any sale of Registrable Securities with respect to which an
Investor has entered into a contract for sale prior to the Investor’s receipt of
a notice from the Company of the notice of a Grace Period and for which the
Investor has not yet settled.

 

u. Neither the Company nor any Subsidiary or affiliate thereof shall identify
any Investor as an underwriter in any public disclosure or filing with the SEC
or the Principal Market and any Investor being deemed an underwriter by the SEC
shall not relieve the Company of any obligations it has under any Transaction
Document (as defined in the Securities Purchase Agreement).

 

v. Neither the Company nor any of its Subsidiaries has entered, as of the date
hereof, nor shall the Company or any of its Subsidiaries, on or after the date
of this Agreement, enter into any agreement with respect to its securities, that
would have the effect of impairing the rights granted to the Buyers in this
Agreement or otherwise conflicts with the provisions hereof.

 

 9 

 

 

w. The Company shall enter into such customary agreements (including, in the
case of underwritten offering, an underwriting agreement) and take such other
actions as any of the Investors or underwriters, if any, may reasonably request
in order to expedite and facilitate the disposition of the Registrable
Securities covered by a Registration Statement.

 

4. OBLIGATIONS OF THE INVESTORS.

 

a. At least ten (10) Business Days prior to the first anticipated filing date of
a Registration Statement and at least seven (7) Business Days prior to the
filing of any amendment or supplement to a Registration Statement, the Company
shall notify each Investor in writing of the information, if any, the Company
requires from each such Investor if such Investor elects to have any of such
Investor’s Registrable Securities included in such Registration Statement or,
with respect to an amendment or a supplement, if such Investor’s Registrable
Securities are included in such Registration Statement (each an “Information
Request”). Provided that the Company shall have complied with its obligations
set forth in the preceding sentence, it shall be a condition precedent to the
obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Investor
that, at least two (2) Business Days prior to the anticipated filing date, such
Investor shall furnish to the Company, in response to an Information Request,
such information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall
be reasonably required to effect the registration of such Registrable
Securities.

 

b. Each Investor, by such Investor’s acceptance of the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of any Registration Statement
hereunder, unless such Investor has notified the Company in writing of such
Investor’s election to exclude all of such Investor’s Registrable Securities
from such Registration Statement.

 

c. Each Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(g) or the first
sentence of Section 3(f), or written notice from the Company of an Allowable
Grace Period, such Investor will discontinue disposition of Registrable
Securities pursuant to any Registration Statement(s) covering such Registrable
Securities until such Investor’s receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(g) or the first sentence of Section
3(f) or receipt of notice from the Company in writing that no supplement or
amendment is required or that the Allowable Grace Period has ended.
Notwithstanding anything to the contrary, the Company shall cause its transfer
agent to deliver unlegended shares of Common Stock to a transferee of an
Investor in accordance with the Securities Purchase Agreement in connection with
any sale of Registrable Securities with respect to which an Investor has entered
into a contract for sale prior to the Investor’s receipt of a notice from the
Company of the happening of any event of the kind described in Section 3(g) or
the first sentence of Section 3(f) and for which the Investor has not yet
settled.

 

5. EXPENSES OF REGISTRATION. All expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including all registration, listing
and qualifications fees, printers and accounting fees, and fees and
disbursements of counsel for the Company, as well as all other costs and
expenses incurred in connection with the Company’s compliance with its
obligations under this Agreement, shall be paid by the Company. Each Investor
shall pay all fees and disbursements of its counsel and all underwriting
discounts and commissions, broker or similar fees and transfer taxes, if any,
relating to the sale or disposition of such Investor’s Registrable Securities.

 

 10 

 

 

6. INDEMNIFICATION. In the event any Registrable Securities are included in a
Registration Statement:

 

a. To the fullest extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend each Investor, the directors, officers,
partners, members, managers, investment managers, employees, affiliates, agents
and representatives of, and each Person, if any, who controls any Investor
within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified
Person”), against any losses, claims, damages, liabilities, judgments, fines,
penalties, charges, costs, reasonable attorneys’ fees, amounts paid in
settlement, joint or several, and any expenses (collectively, “Indemnified
Damages”), incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by
or before any court or Governmental Authority or other administrative or
regulatory agency or body (including the SEC and any state commission or
authority or self-regulatory organization or securities exchange in the United
States or elsewhere), whether pending or threatened, whether or not an
indemnified party is or may be a party thereto (“Claims”), to which any of them
may become subject insofar as such Claim (or actions or proceedings, whether
commenced or threatened, in respect thereof) or Indemnified Damages arise out of
or are based upon: (i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other “blue sky” laws of any jurisdiction in
which Registrable Securities are offered, or the omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements made therein not misleading, (ii) any untrue statement or alleged
untrue statement of a material fact contained in any prospectus, including any
preliminary prospectus, free writing prospectus or final prospectus (as amended
or supplemented, if the Company files any amendment thereof or supplement
thereto, and including all information incorporated by reference therein), or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading, (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any other law, including any state
securities law, or any rule or regulation thereunder relating to the offer or
sale of the Registrable Securities pursuant to a Registration Statement or (iv)
any breach or violation of this Agreement (the matters in the foregoing clauses
(i) through (iv) being, collectively, “Violations”). Subject to Section 6(c),
the Company shall reimburse the Indemnified Persons, promptly as such expenses
are incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (x) shall not apply to
a Claim or Indemnified Damages sought by an Indemnified Person to the extent
arising out of or based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company by such
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto; and
(y) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld, conditioned or delayed. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive any transfer of
Registrable Securities by any Investor pursuant to Section 9.

 

b. In connection with any Registration Statement in which an Investor’s
Registrable Securities are included, each such Investor agrees to severally and
not jointly indemnify, hold harmless and defend the Company, each of its
directors, each of its officers who signs the Registration Statement, and each
Person, if any, who controls the Company within the meaning of the 1933 Act or
the 1934 Act (each an “Indemnified Party”), to the same extent and in the same
manner as is set forth in Section 6(a) with respect to the Indemnified Persons,
against any Claim or Indemnified Damages to which any of them may become subject
insofar as such Claim or Indemnified Damages arise out of or are based upon any
Violation, in each case to the extent, and only to the extent, that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Investor expressly for use in connection with
the preparation of the Registration Statement or any amendment thereof or
supplement thereto; and, subject to Section 6(c), such Investor will reimburse
the Indemnified Party for any legal or other expenses reasonably incurred by an
Indemnified Party in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this Section 6(b)
and the agreement with respect to contribution contained in Section 7 shall not
apply to amounts paid in settlement of any Claim or Indemnified Damages if such
settlement is effected without the prior written consent of such Investor, which
consent shall not be unreasonably withheld; provided, further, that an Investor
shall be liable under this Section 6(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the net proceeds to such Investor as a
result of the sale of Registrable Securities pursuant to the Registration
Statement giving rise to such indemnification obligation. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Indemnified Party and shall survive any transfer of Registrable
Securities by any Investor pursuant to Section 9.

 

 11 

 

 

c. Promptly after receipt by an Indemnified Person or Indemnified Party under
this Section 6 of the written threat of or notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving
a Claim or Indemnified Damages, such Indemnified Person or Indemnified Party
shall, if a Claim in respect thereof is to be made against any indemnifying
party under this Section 6, promptly deliver to the indemnifying party a written
notice of the written threat of or notice of the commencement of such action or
proceeding. In case any such action or proceeding is brought against any
Indemnified Party or Indemnified Person and such Indemnified Party or
Indemnified Person seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party shall have the right to participate in, and, to
the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be. In any such proceeding, any
Indemnified Person or Indemnified Party may retain its own counsel, but the fees
and expenses of that counsel will be at the expense of that Indemnified Person
or Indemnified Party, as the case may be, unless (i) the indemnifying party and
the Indemnified Person or Indemnified Party, as applicable, shall have mutually
agreed to the retention of that counsel, (ii) the indemnifying party does not
assume the defense of such proceeding in a timely manner or (iii) in the opinion
of counsel retained by the Indemnified Person or Indemnified Party, as
applicable, the representation by such counsel for the Indemnified Person or
Indemnified Party, as applicable, and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by
counsel to the indemnifying party in such proceeding. The Indemnified Party or
Indemnified Person shall reasonably cooperate with the indemnifying party in
connection with any negotiation or defense of any such action or proceeding or
Claim or Indemnified Damages by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the Indemnified Party
or Indemnified Person which relates to such action, proceeding or Claim or
Indemnified Damages. The indemnifying party shall keep the Indemnified Party or
Indemnified Person fully apprised at all times as to the status of the defense
or any settlement negotiations with respect thereto. No indemnifying party
shall, without the prior written consent of the Indemnified Party or Indemnified
Person, as the case may be, consent to entry of any judgment or enter into any
settlement or other compromise with respect to any pending or threatened action
or claim in respect of which indemnification or contribution may be or has been
sought hereunder (whether or not the Indemnified Party or Indemnified Person is
an actual or potential party to such action or claim) which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person (as applicable) of a full release from
all liability with respect to such Claim or Indemnified Damages or which
includes any admission as to fault or culpability on the part of such
Indemnified Party or Indemnified Person. The failure to deliver written notice
to the indemnifying party within a reasonable time of the commencement of any
such action or proceeding shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is materially prejudiced in its
ability to defend such action or proceeding as a result of such failure.

 

d. The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are incurred. The
Indemnified Party or Indemnified Person shall promptly reimburse the
indemnifying party for that portion of such fees and expenses applicable to such
actions for which such Indemnified Party or Indemnified Person is finally
judicially determined to not be entitled to indemnification hereunder.

 

e. The indemnity agreements contained herein shall be in addition to (i) any
cause of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

 

7. CONTRIBUTION. To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no Person involved in the sale of Registrable Securities which Person is
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) in connection with such sale shall be entitled to contribution
from any Person involved in the sale of Registrable Securities who was not
guilty of such fraudulent misrepresentation; and (ii) contribution by any seller
of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities
pursuant to such Registration Statement , less the amount of any damages that
such Investor has otherwise been required to pay in connection with such sale.

 

 12 

 

 

8. REPORTS UNDER THE 1934 ACT.

 

a. With a view to making available to the Investors the benefits of Rule 144,
the Company agrees to, so long as an Investor owns Registrable Securities, use
best efforts to:

 

i. make and keep public information available, as those terms are understood and
defined in Rule 144;

 

ii. file with the SEC in a timely manner all reports and other documents
required of the Company under the 1933 and the 1934 Act so long as the Company
remains subject to such requirements (it being understood that nothing herein
shall limit the Company’s obligations under Section 4(c) of the Securities
Purchase Agreement) and the filing of such reports and other documents is
required for the applicable provisions of Rule 144; and

 

iii. furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the 1933 Act and
the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested to permit the Investors to
sell such securities pursuant to Rule 144 without registration.

 

b. For so long as the Principal Market is not a National Exchange (as such terms
are defined in the Securities Purchase Agreement), the Company shall use its
best efforts to facilitate trading of the Common Stock on the Principal Market
and, without limiting the foregoing, the Company shall file all necessary
reports, at its expense, to publish all information so as to have available
“current public information” in Standard & Poor’s Corporation Records or
Mergent’s Manual for state “blue sky” exemption purposes.

 

9. ASSIGNMENT OF REGISTRATION RIGHTS. The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of (i) the Required Holders and (ii) Redmile Group LLC, but only to the
extent that the Required Holders are not funds, accounts or entities managed by
Redmile Group, LLC or any of its Affiliates. The rights under this Agreement
shall be automatically assignable by the Investors to any transferee of all or
any portion of such Investor’s Registrable Securities if: (i) the Investor
agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company; (ii) the Company is
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act and applicable state securities laws;
(iv) the transferee or assignee agrees in writing with the Company to be bound
by all of the provisions contained herein; and (v) the transferee is an
“accredited investor,” as that term is defined in Rule 501 of Regulation D.

 

10. AMENDMENT OF REGISTRATION RIGHTS. Provisions of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of (i) the Company, (ii) the Required Holders and (iii) Redmile
Group LLC, but only to the extent that the Required Holders are not funds,
accounts or entities managed by Redmile Group, LLC or any of its Affiliates;
provided that any such amendment or waiver that complies with the foregoing but
that disproportionately, materially and adversely affects the rights and
obligations of any Investor relative to the comparable rights and obligations of
the other Investors shall require the prior written consent of such adversely
affected Investor (for the avoidance of doubt, participation by any Investor in
an unrelated financing by the Company shall not be deemed to disproportionately
affect the Investors who do not participate in such financing). Any amendment or
waiver effected in accordance with this Section 10 shall be binding upon each
Investor and the Company. No such amendment shall be effective to the extent
that it applies to less than all of the holders of the Registrable Securities.
No consideration shall be offered or paid to any Person to amend or consent to a
waiver or modification of any provision of any of this Agreement unless the same
consideration also is offered to each of the Investors.

 

 13 

 

 

11. ADDITIONAL REGISTRATION STATEMENTS. During the period beginning on the date
hereof and ending on the last day of the Registration Period, if at any time
there is not an effective Registration Statement available for the resale of the
Registrable Securities under the 1933 Act, the Company shall not file a
Registration Statement or an offering statement under the 1933 Act relating to
securities that are not the Registrable Securities (other than a Registration
Statement on Form S-8, or such supplements or amendments to Registration
Statements that are outstanding and have been declared effective by the SEC as
of the date hereof, solely to the extent necessary to keep such registration
statements effective and available.

 

12. MISCELLANEOUS.

 

a. A Person is deemed to be a holder of Registrable Securities (or a transferee
or assignee of Registrable Securities, as applicable) whenever such Person owns
or is deemed to own of record such Registrable Securities (or the Preferred
Shares or other securities upon exercise, conversion or exchange of which such
Registrable Securities are directly or indirectly issuable, without giving
effect to any limitations or restrictions on conversion of the Preferred Shares
or other securities). If the Company receives conflicting instructions, notices
or elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from the registered owner of such Registrable Securities (or
the Preferred Shares or other securities upon exercise, conversion or exchange
of which such Registrable Securities are directly or indirectly issuable).

 

b. Any notices, consents, waivers or other communications required or permitted
to be given under the terms of this Agreement must be in writing and will be
deemed to have been delivered upon receipt, when delivered personally or by a
nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses for such
communications shall be:

 

  If to the Company:           Stereotaxis, Inc.     4320 Forest Park Avenue,
Suite 100      St. Louis, Missouri 63108     Attention: Chief Financial Officer
        With copy to:           Stereotaxis, Inc.     4320 Forest Park Avenue,
Suite 100     St. Louis, Missouri 63108     Attention: Legal Department        
  -and-           Bryan Cave Leighton Paisner LLP     One Metropolitan Square  
  211 N. Broadway, Suite 3600     St. Louis, Missouri 63102     Attention:
Robert J. Endicott, Esq.

 

If to a Buyer, to it at the address set forth under such Buyer’s name on its
signature page to the Securities Purchase Agreement, or, in the case of a Buyer,
Investor or any other party named above, at such other address and/or to the
attention of such other Person as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of
such change. If to Legal Counsel, to such counsel at the address for such
counsel specified by written notice given to given to each other party promptly
following designation of such counsel. Written confirmation of receipt (A) given
by the recipient of such notice, consent, waiver or other communication; (B) an
affidavit of delivery by a delivery service selected by the Company; or (C)
provided by a nationally recognized overnight delivery service shall be
rebuttable evidence of personal service.

 

 14 

 

 

c. Failure of any party to exercise any right or remedy under this Agreement or
otherwise, or delay by a party in exercising such right or remedy, shall not
operate as a waiver thereof.

 

d. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of Delaware, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Delaware or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Delaware. Each party hereby irrevocably submits to the exclusive
jurisdiction of the courts of Delaware for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s). EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

e. This Agreement and the other Transaction Documents constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and
thereof. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein and therein. This Agreement and the
other Transaction Documents supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.

 

f. Subject to the requirements of Section 9, this Agreement shall inure to the
benefit of and be binding upon the permitted successors and assigns of each of
the parties hereto.

 

g. The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

 

h. This Agreement and any amendments hereto may be executed and delivered in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original, but
all of which taken together shall constitute one and the same agreement, and
shall become effective when counterparts have been signed by each party hereto
and delivered to the other parties hereto, it being understood that all parties
need not sign the same counterpart. In the event that any signature to this
Agreement or any amendment hereto is delivered by facsimile transmission or by
e-mail delivery of a “.pdf” format data file, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile or
“.pdf” signature page were an original thereof. No party hereto shall raise the
use of a facsimile machine or e-mail delivery of a “.pdf” format data file to
deliver a signature to this Agreement or any amendment hereto or the fact that
such signature was transmitted or communicated through the use of a facsimile
machine or e-mail delivery of a “.pdf” format data file as a defense to the
formation or enforceability of a contract and each party hereto forever waives
any such defense.

 

i. Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

 

 15 

 

 

 

j. All consents and other determinations to be made by the Investors pursuant to
this Agreement shall be made, unless otherwise specified in this Agreement, by
the Required Holders, determined without regard to any limitations on conversion
of Preferred Shares. Any consent or other determination approved by Investors as
provided in the immediately preceding sentence shall be binding on all
Investors.

 

k. The language used in this Agreement will be deemed to be the language chosen
by the parties to express their mutual intent and no rules of strict
construction will be applied against any party.

 

l. Each Buyer and each holder of the Registrable Securities shall have all
rights and remedies set forth in the Transaction Documents and all rights and
remedies that such Buyers and holders have been granted at any time under any
other agreement or contract and all of the rights that such Buyers and holders
have under any law. Any Person having any rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without posting
a bond or other security or proving actual damages), to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.

 

m. This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns and, to the extent provided in
Sections 6 and 7 hereof, each Indemnified Person and Indemnified Party, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

 

n. The Company shall not grant any Person any registration rights with respect
to shares of Common Stock or any other securities of the Company other than
registration rights that will not adversely affect the rights of the Investors
hereunder (including by limiting in any way the number of Registrable Securities
that could be included in any Registration Statement pursuant to Rule 415) and
shall not otherwise enter into any agreement that is inconsistent with the
rights granted to the Investors hereunder.

 

o. The obligations of each Investor hereunder are several and not joint with the
obligations of any other Investor, and no provision of this Agreement is
intended to confer any obligations on any Investor vis-à-vis any other Investor.
Nothing contained herein, and no action taken by any Investor pursuant hereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated herein.

 

p. Unless the context otherwise requires, (a) all references to Sections,
Schedules or Exhibits are to Sections, Schedules or Exhibits contained in or
attached to this Agreement, (b) each accounting term not otherwise defined in
this Agreement or the Securities Purchase Agreement has the meaning assigned to
it in accordance with GAAP, (c) words in the singular or plural include the
singular and plural, and pronouns stated in either the masculine, the feminine
or neuter gender shall include the masculine, feminine and neuter and (d) the
use of the word “including” in this Agreement shall be by way of example rather
than limitation.

 

* * * * * *

 

 16 

 

 

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to be duly executed as of day and year first above written.

 

  COMPANY:         STEREOTAXIS, INC.         By: /s/ David Fischel   Name: 
David Fischel   Title: Chairman & CEO

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

  BUYERS:         REDMILE CAPITAL OFFSHORE II MASTER FUND, LTD.         By:
Redmile Group, LLC, its investment manager         By: /s/ Josh Garcia   Name: 
Josh Garcia   Title: CFO

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

  BUYERS:       REDMILE STRATEGIC MASTER FUND, LP         By: Redmile Group,
LLC, its investment manager         By: /s/ Josh Garcia   Name:  Josh Garcia  
Title: CFO

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

  BUYERS:         NAME OF BUYER:         Opaleye L.P.         By: /s/ James
Silverman   Name:  James Silverman   Title: Founder

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

 

  BUYERS:         NAME OF BUYER:         Whitney Capital Series Fund LLC        
  By: /s/ Trina Geatz   Name:  Trina Geatz   Title: Global Director of
Operations

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

 

  BUYERS:       NAME OF BUYER:         Schonfeld Fundamental Equity Fund LLC    
    By: /s/ Trina Geatz   Name:  Trina Geatz   Title: Global Director of
Operations

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

  BUYERS:         NAME OF BUYER:         Parkman HP Master Fund         By:
Parkman Healthcare Partners LLC, Investment Manager         By: /s/ Michael
Elgort   Name:  Michael Elgort   Title: CFO/COO of Investment Manager

 

[Signature Page to Registration Rights Agreement]