Exhibit 10.1

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made as of the 9th day
of May, 2014, by and between Aetrium Incorporated, a Minnesota corporation (the
“Company”), and Lone Star Value Investors, LP (“Lone Star”).

 

WITNESSETH

 

WHEREAS, the Company and Lone Star entered into that certain Securities Purchase
Agreement, dated as of April 1, 2014 (the “Purchase Agreement”), pursuant to
which the Company issued and sold to Lone Star and Lone Star purchased from the
Company a Convertible Promissory Note in the original principal amount of
$500,000.00 (the “Convertible Promissory Note”); and

 

WHEREAS, pursuant to Section 4.3 of the Purchase Agreement, the Company and Lone
Star agreed to enter into a Registration Rights Agreement in order to provide
Lone Star with certain rights to register shares of the common stock of the
Company, par value $0.001 per share (“Common Stock”), issuable upon conversion
of the Convertible Promissory Note.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the Company and Lone Star hereby agree as follows:

 

1 Registration Rights.

 

1.1 Definitions. As used in this Agreement:

 

(a) The terms “register,” “registered,” and “registration” refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
“Securities Act”), and the declaration or ordering of effectiveness of such
registration statement or document.

 

(b) The term “Registrable Securities” means (i) the shares of Common Stock
issuable or issued upon conversion of the Convertible Promissory Note, other
than shares for which registration rights have terminated pursuant to Section 1,
(ii) any other shares of Common Stock issued as (or issuable upon the conversion
or exercise of any warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange for or in
replacement of, the securities listed in (i); provided, however, that securities
shall only be treated as Registrable Securities if and only for so long as they
(A) have not been sold by a Person in a transaction in which his or her rights
under this Agreement were not assigned, (B) have not been disposed of pursuant
to a registration statement declared effective by the SEC, or (C) have not been
sold in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act so that all transfer restrictions and
restrictive legends with respect thereto are removed upon the consummation of
such sale and (D) may not be disposed of under Rule 144 without restriction. The
number of Registrable Securities that are held by a Person or are outstanding
shall be determined by the number of shares that are Registrable Securities and
either are held by such Person or outstanding (as applicable) or are issuable
upon the exercise, exchange or conversion of then exercisable, exchangeable or
convertible securities (including the Convertible Promissory Note) that are held
by such Person or outstanding (as applicable).

 

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(c) The term “Holder” means any Person owning or having the right to acquire
Registrable Securities or any assignee thereof in accordance with Section 1.10.

 

(d) The term “Person” means an individual, partnership, corporation, limited
liability company, trust, unincorporated organization, joint venture, a
governmental authority or other entity of whatever nature.

 

(e) The term “Form S-3” means such form under the Securities Act as in effect on
the date hereof or any successor form under the Securities Act that permits
significant incorporation by reference of the Company’s subsequent public
filings under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).

 

(f) The term “Registration Expenses” means all expenses incurred by the Company
in complying with Sections 1.2 and 1.3, including without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and disbursements not to exceed
$10,000.00 of a single special counsel for the Holders in connection with each
registration, blue sky fees and expenses and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company which shall be paid in any event by the
Company).

 

(g) The term “Rule 144” means Rule 144 promulgated under the Securities Act.

 

(h) The term “SEC” means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.

 

1.2 Demand Registration.

 

(a) At any time after July 30, 2014, if there is not in existence an effective
registration statement (or registration statements) allowing for the
registration and sale of all Registrable Securities held by the Holders, and the
Company shall receive a written request from the Holders of at least sixty-six
and two thirds percent (66 2/3%) of the Registrable Securities then outstanding,
that the Company file a registration statement under the Securities Act covering
the registration of all or a portion of such Registrable Securities (a “Demand
Registration Statement”) on an appropriate form covering the sale of the
Registrable Securities requested to be registered, then the Company shall use
commercially reasonable efforts to effect as soon as practicable, and in any
event shall within ninety (90) days of the receipt of such request, file the
Demand Registration Statement, and shall use its best efforts to cause the
Demand Registration Statement to become effective within one hundred and fifty
(150) days after filing.

 

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(b) The Company shall only be required to file a Demand Registration Statement
if the Registrable Securities to be included therein constitute at least
sixty-six and two thirds percent (66 2/3%) of the Registrable Securities. Within
fifteen (15) business days of receiving a written request to file a Demand
Registration Statement, the Company shall give written notice of such demand to
all other Holders who hold piggyback registration rights under Section 1.3 that
may be exercisable. If the Holders initiating the registration request hereunder
(“Initiating Holders”) intend to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to this Section 1.2 and such
information shall be included in the notice to other Holders. The underwriter
will be selected by a majority in interest of the Initiating Holders and shall
be reasonably acceptable to the Company. In such event, the right of any Holder
to include his Registrable Securities in such registration shall be conditioned
upon such Holder’s participation in such underwriting and the inclusion of such
Holder’s Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder) to
the extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company as provided in
Section 1.4(f)) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting. Notwithstanding any
other provision of this Section 1.2, if the underwriter advises the Initiating
Holders in writing that marketing factors require a limitation of the number of
shares to be underwritten, then the Initiating Holders shall so advise all
Holders of Registrable Securities which would otherwise be underwritten pursuant
hereto, and the number of shares of Registrable Securities that may be included
in the underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder; provided, however,
that the number of shares of Registrable Securities to be included in such
underwriting shall not be reduced unless all other securities are first entirely
excluded from the underwriting. If any Holders would thus be entitled to include
more securities than such Holder requested to be registered, the excess shall be
allocated among the other remaining requesting Holders in the manner described
in the immediately preceding sentence.

 

(c) Notwithstanding the foregoing, if the Company shall furnish to Holders
requesting a Demand Registration Statement pursuant to this Section 1.2, a
certificate signed by the President or Chief Executive Officer of the Company
stating that the Company is engaged in any activity that, in the good faith
judgment of the Board of Directors of the Company (the “Board”), is material and
nonpublic and would be required to be disclosed in the applicable Demand
Registration Statement and such disclosure would be seriously detrimental to the
Company and its stockholders, then the Company may direct that such request to
register Registrable Securities be delayed for a period of not more than ninety
(90) days after receipt of the request of the Initiating Holders; provided,
however, that the Company may not utilize this right more than once in any
twelve (12) month period.

 

(d) In addition, the Company shall not be obligated to effect, or to take any
action to effect, any registration pursuant to this Section 1.2:

 

(i) After the Company has effected one (1) such registration on behalf of the
Holders pursuant to this Section 1.2 and such registration has been declared or
ordered effective, provided that the Registrable Securities requested for
inclusion in such registration were so included; or

 

(ii) During the period starting with the date thirty (30) days prior to the
Company’s good faith estimate of the date of filing of, and ending on a date
ninety (90) days after the effective date of, a Company initiated registration
subject to Section 1.3 hereof.

 

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1.3 Company Registration. At any time after July 30, 2014 that there is not in
existence an effective registration statement covering all of a Holder’s
Registrable Securities (a “Precluded Holder”), if the Company proposes to
register (including for this purpose a registration effected by the Company for
stockholders other than the Holders) any of its stock under the Securities Act
in connection with the “public offering” (as such term is interpreted by Nasdaq
under its rules and regulations) of such securities (other than a registration
relating solely to the sale of securities to participants in a Company stock
plan or a transaction covered by Rule 145 under the Securities Act, a
registration relating to an “equity line of credit” or similar offering, a
registration in which the only stock being registered is Common Stock issuable
upon conversion of debt securities which are also being registered, or any
registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Registrable Securities), the Company shall, at such
time, promptly give each such Precluded Holder written notice of such
registration. Upon the written request of each Precluded Holder given within
fifteen (15) days after mailing of such notice by the Company in accordance with
Section 2.3, the Company shall, subject to the provisions of Section 1.5, cause
to be registered under the Securities Act all of the Registrable Securities that
each such Precluded Holder has requested to be registered; provided, however,
that in connection with any offering involving an underwriting of shares of the
Company’s capital stock, the Company shall not be required under this Section
1.3 to include any of the Precluded Holders’ securities in such underwriting
unless they accept the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it (or by other Persons entitled to
select the underwriters), and then only in such quantity as the underwriters
determine will not jeopardize the success of the offering by the Company. If the
total amount of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the amount of securities
(sold other than by the Company) that the underwriters advise the Company in
writing is compatible with the success of the offering, then the Company shall
be required to include in the offering only that number of such securities,
including Registrable Securities, which the underwriters have advised the
Company in writing will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling stockholders
according to the total amount of securities entitled to be included therein
owned by each selling stockholder or in such other proportions as shall mutually
be agreed to by such selling stockholders).

 

1.4 Obligations of the Company. Whenever required under this Section 1 to effect
the registration of any Registrable Securities, the Company shall promptly:

 

(a) Subject to Section 1.2(a), prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use best efforts to
cause such registration statement to become effective, and, in the case of
registrations pursuant to Section 1.2, keep such registration statement
effective until the distribution is completed, but not more than one hundred
twenty (120) days, provided that such one hundred twenty (120) day period shall
be extended for a period of time equal to the period the Holder refrains from
selling any Registrable Securities included in such registration statement due
to circumstances described in Section 1.4(h).

 

(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.

 

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(c) Respond as promptly as reasonably practicable to any comments received from
the SEC with respect to such registration statement or any amendment thereto
and, as reasonably practicable to provide the Holders true and complete copies
of all correspondence from and to the SEC relating to such registration
statement.

 

(d) Within a reasonable time before filing such registration statement,
prospectus or amendments or supplements thereto, furnish to one counsel selected
by holders of a majority of such Registrable Securities copies of such documents
proposed to be filed, which documents shall be subject to the review, comment
and approval of such counsel;

 

(e) Furnish to the Holders such numbers of copies of a prospectus, including a
preliminary prospectus, and any amendments and supplements to such prospectus in
conformity with the requirements of the Securities Act, and such other documents
as they may reasonably request in order to facilitate the disposition of
Registrable Securities owned by them that are included in such registration.

 

(f) Use commercially reasonable efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdiction, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act.

 

(g) In the event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter of such offering.

 

(h) Notify each Holder of Registrable Securities covered by such registration
statement (and each underwriter in the case of an underwritten offering),
promptly after it shall receive notice or obtain knowledge thereof, of the
issuance of any stop order by the SEC suspending the effectiveness of such
registration statement or the initiation or threatening of any proceeding for
that purpose or any proceeding against the Company under Section 8A of the
Securities Act in connection with such registration statement, and promptly use
its commercially reasonable efforts to prevent the issuance of any stop order or
to obtain its withdrawal if such stop order should be issued.

 

(i) Notify each Holder of Registrable Securities covered by such registration
statement (and each underwriter in the case of an underwritten offering) at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing, and, following such notification,
promptly deliver to each Holder and each such underwriter that number of copies
of all amendments or supplements referred in paragraphs (b) and (d) of this
Section 1.4 as may be necessary so that, as thereafter delivered to the
purchaser of such Registrable Securities, such prospectus shall not include 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 not misleading in
light of the circumstances then existing.

 

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(j) Cause all such Registrable Securities registered pursuant to this Agreement
to be listed on each securities exchange on which similar securities issued by
the Company are then listed.

 

(k) Upon reasonable notice and during normal business hours, make available for
inspection by any selling Holder of Registrable Securities, any underwriter
participating in any disposition pursuant to such Registration Statement and any
attorney, accountant or other agent retained by any such holder or underwriter,
all pertinent financial and other records, pertinent corporate documents and
properties of the Company (collectively, the “Records”), as shall be reasonably
necessary to enable them to exercise their due diligence responsibility, and
cause the Company’s officers, directors and employees to supply all information
reasonably requested by any such underwriter, advisor, or agent in connection
with such Registration Statement.

 

(l) Provide a transfer agent and registrar (which may be the same entity) for
all such Registrable Securities not later than the effective date of such
registration.

 

(m) In connection with an underwritten offering, enter into such customary
agreements (including underwriting and lock-up agreements in customary form) and
take all such other customary actions as the holders of such Registrable
Securities or the managing underwriter of such offering reasonably request in
order to expedite or facilitate the disposition of such Registrable Securities
(including, without limitation, making appropriate officers of the Company
available to participate in “road show” and other customary marketing
activities, including one-on-one meetings with prospective purchasers of the
Registrable Securities).

 

(n) Use its best efforts to obtain (i) a legal opinion of the Company’s outside
counsel, dated the effective date of such Registration Statement (and, if such
registration includes an underwritten public offering, dated the date of the
closing under the underwriting agreement), in form and substance as is
customarily given in opinions of the Company’s counsel to underwriters in
underwritten public offerings; and (ii) a “comfort” letter signed by the
Company’s independent certified public accountants in form and substance as is
customarily given in accountants’ letters to underwriters in underwritten public
offerings.

 

(o) Subject to the other provisions of this Agreement, otherwise use its
reasonable best efforts to take all other steps necessary to effect the
registration of such Registrable Securities contemplated hereby.

 

1.5 Furnish Information. It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Section 1 with respect to any
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company such information regarding itself, the Registrable Securities held
by it, and the intended method of disposition of such securities as shall be
required to timely effect the registration of such Holder’s Registrable
Securities. Such Holders agree to notify the Company as promptly as practicable
of any inaccuracy or change in information they have previously furnished to the
Company.

 

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1.6 Expenses of Registration. All Registration Expenses incurred in connection
with any Demand Registration Statement and all issuances off any Demand
Registration Statement (pursuant to Section 1.2) shall be borne by the Company.

 

1.7 Delay of Registration. No Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Section 1.

 

1.8 Indemnification. In the event any Registrable Securities are included in a
registration statement under this Section 1:

 

(a) To the extent permitted by law, the Company will indemnify and hold harmless
each Holder, such Holder’s officers, directors, managers, members, partners,
stockholders and affiliates, each underwriter, broker or any other Person acting
on behalf of such holder of Registrable Securities and each other Person, if
any, who controls any of the foregoing Persons within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages, or
liabilities (joint or several) to which any of the foregoing Persons may become
subject under the Securities Act, the Exchange Act or other federal or state
law, or otherwise, as a result of any breach by the Company of its obligations
under Section 1.4(g) or insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a “Violation”): (i)
any untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law; and the
Company will pay to each such Holder, underwriter or controlling person, as
incurred, any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
Section 1.8(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld or
delayed), nor shall the Company be liable to any Holder, underwriter or
controlling person for any such loss, claim, damage, liability, or action to the
extent that it arises out of a Violation which is based solely upon information
regarding such Holder, underwriter or controlling person furnished in writing to
the Company by such Holder, underwriter or controlling person expressly for use
in connection with such registration by such Holder, underwriter or controlling
person.

 

(b) To the extent permitted by law, each selling Holder will indemnify and hold
harmless (severally and not jointly) the Company, each of its directors, each of
its officers who has signed the registration statement, each Person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter,
any other Holder selling securities in such registration statement and any
controlling person of any such underwriter or other Holder, against any losses,
claims, damages, or liabilities (joint or several) to which any of the foregoing
Persons may become subject, under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of any Violation, in each case to the
extent (and only to the extent) that such Violation is based solely upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably incurred by
any Person intended to be indemnified pursuant to this Section 1.8(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this Section 1.8(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder, (which consent shall not be unreasonably withheld or
delayed); provided, further that such consent shall not be deemed to have been
unreasonably withheld or delayed if any settlement (i) does not include as an
unconditional term thereof, the giving by the plaintiff or claimant to the
Holder of a release from all liability in respect of such loss, claim, damage,
liability or action or (ii) includes an admission of guilt on behalf of the
Holder; provided, further that in no event shall any indemnity under this
Section 1.8(b) exceed the net proceeds (after underwriting fees, commissions, or
discounts) from the offering received by such Holder, except in the case of
fraud by such Holder.

 

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(c) Promptly after receipt by an indemnified party under this Section 1.8 of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 1.8, deliver to the indemnifying party
a written notice of the commencement thereof and 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
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party (together with all other indemnified parties
which may be represented without conflict by one counsel) shall have the right
to retain one separate counsel, with the reasonable fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 1.8, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 1.8.

 

(d) If the indemnification provided for in this Section 1.8 is held by a court
of competent jurisdiction to be unavailable to an indemnified party with respect
to any loss, liability, claim, damage or expense referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage, or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim, damage or
expense as well as any other relevant equitable considerations; provided, that
in no event shall any contribution by a Holder under this Section 1.8(d) exceed
the net proceeds (after underwriting fees, commissions, or discounts) from the
offering received by such Holder, except in the case of fraud by such Holder.
The relative fault of the indemnifying party and of the indemnified party shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party and by the indemnified
party and the parties’ relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.

 

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(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control for the parties to such agreement, provided, that no Holder of
Registrable Securities included in any underwritten registration shall be
required to make any representations or warranties to the Company or the
underwriters (other than representations and warranties regarding such Holder,
such Holder’s ownership of its shares of Common Stock to be sold in the offering
and such Holder’s intended method of distribution) or to undertake any
indemnification obligations to the Company or the underwriters with respect
thereto, except as otherwise provided in Section 1.8(b).

 

(f) The obligations of the Company and Holders under this Section 1.8 shall
survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.

 

1.9 Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders the benefits of Rule 144 and any other rule or
regulation of the SEC that may at any time permit a Holder to sell securities of
the Company to the public without registration or pursuant to a registration on
Form S-3, the Company agrees to:

 

(a) make and keep public information available, as those terms are understood
and defined in Rule 144, at all times;

 

(b) use its commercially reasonable efforts to take such action as is necessary
to enable the Holders to utilize Form S-3 for the sale of their Registrable
Securities;

 

(c) use its commercially reasonable efforts to file with the SEC in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and

 

(d) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, or that it qualifies as a registrant whose securities may
be resold pursuant to Form S-3 (at any time after it so qualifies), (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 in availing any Holder of any rule or regulation
of the SEC which permits the selling of any such securities without registration
or pursuant to such form.

 

1.10 Assignment of Registration and Information Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of Registrable Securities that (a) is a subsidiary, parent, general
partner, limited partner, member or stockholder of a Holder or (b) acquires at
least 100,000 shares of Registrable Securities (as adjusted for stock splits and
combinations); provided the Company is, within ten (10) days after such
transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
transferee shall agree in writing to be subject to all applicable restrictions
set forth in this Agreement. In each case, such rights may only be transferred
together with the underlying Registrable Securities in a transfer permitted by
the Securities Act and applicable state securities laws. Any such permitted
transferee or assignee shall be deemed a Holder hereunder.

 

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1.11 Termination of Registration Rights. This Agreement shall terminate and be
of no further force or effect when there shall no longer be any Registrable
Securities outstanding; provided that the provisions of Sections 1.6 and 1.8
shall survive any such termination.

 

2 Miscellaneous.

 

2.1 Successors and Assigns. Except as otherwise provided in this Agreement, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective permitted successors and assigns of the parties
(including transferees of the Convertible Promissory Note or any Common Stock
issued upon conversion thereof). Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

 

2.2 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the Company and the Holders of a majority of the outstanding
Registrable Securities. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each party to the Agreement, whether or not such
party has signed such amendment or waiver, each future holder of all such
Registrable Securities, and the Company. Any failure by the Company or a Holder
to enforce any rights hereunder shall not be deemed a waiver of such rights.

 

2.3 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given when delivered personally, one day after being
delivered to a nationally recognized overnight courier or on the business day
received (or the next business day if received after 5:00 p.m. local time or on
a weekend or day on which banks are closed) when sent via facsimile (with a
confirmatory copy sent by overnight courier) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):

 

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If to a Holder:

 

The Holder’s address or fax number set forth on the Holder’s signature page to
this Agreement

 

If to the Company:

 

Aetrium Incorporated
2350 Helen Street
North St. Paul, Minnesota 55109
Fax: (651) 770-7975

 

With a copy to (which shall not constitute notice):

 

Olshan Frome Wolosky LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
Attn: Adam Finerman, Esq.
Fax: (212) 451-2222

 

2.4 Severability. If any term or other provision of this Agreement is invalid,
illegal, or incapable of being enforced by any law or public policy, all other
terms and provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal, or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.

 

2.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota applicable to contracts made
and performed in such State, without reference to conflict of law rules that
would require the application of the laws of another jurisdiction.

 

2.6 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original copy of this Agreement and all
of which, when taken together, shall be deemed to constitute one and the same
agreement, and photostatic, .pdf or facsimile copies of fully-executed
counterparts of this Agreement shall be given the same effect as originals.

 

2.7 Headings. The headings or captions contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

2.8 Pronouns. Whenever the pronouns “it” or “its” are used herein, they shall
also be deemed to mean “he” or “his” or “she” or “hers” whenever applicable.
Words in the singular shall be read and construed as though in the plural and
words in the plural shall be read and construed as though in the singular in all
cases where they would so apply.

 

2.9 Aggregation of Securities. All Registrable Securities held or acquired by
affiliated Persons shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement.

 

2.10 Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter contained herein and
supersedes all prior oral or written agreements, if any, between the parties
hereto with respect to such subject matter, and, except as otherwise expressly
provided herein, is not intended to confer upon any other Person any rights or
remedies hereunder.

 

[Signature Page Follows]

  

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[SIGNATURE PAGE TO Registration Rights Agreement]

  

The parties have executed this Registration Rights Agreement as of the date
first above written.

 

  Aetrium Incorporated       By:

/s/ Paul Askegaard

  Name: Paul Askegaard   Title: Chief Financial Officer

 

  HOLDER:       Lone Star Value Investors, LP       By: Lone Star Value
Investors GP, LLC,     its General Partner       By:

/s/ Jeffrey E. Eberwein

  Name: Jeffrey E. Eberwein   Title: Managing Member         Holder Notice
Information:         Lone Star Value Investors, LP     53 Forest Avenue, 1st
Floor     Old Greenwich, Connecticut 06870     Fax: (203) 990-0727          
With a copy to (which shall not constitute notice):           Dorwart Lawyers  
  Old City Hall     124 East Fourth Street     Tulsa, Oklahoma 74103-5010    
Attn: Frederic Dorwart, Esq.     Fax: (918) 583-8251

 

SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

 

 

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