Document:

Blueprint

  Exhibit 10.1

 

REGISTRATION RIGHTS AGREEMENT

 

This
REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of November
3, 2017, is by and among SANUWAVE Health, Inc., a Nevada
corporation (the “Company”), and each of the
undersigned investors (each a “Purchaser,” and collectively, the
“Purchasers”).

 

RECITALS

 

A.     In
connection with the Note Subscription Agreement by and among the
parties hereto, dated as of November 3, 2017 (the
“Subscription
Agreement”), the Company has agreed, upon the terms
and subject to the conditions of the Subscription Agreement, to
issue to each Purchaser Warrants and shares of the Company’s
common stock (“Common Stock”) if the Convertible Note
is converted (as defined in the Subscription
Agreement).

 

B.     To
induce the Purchasers to consummate the transactions contemplated
by the Subscription Agreement, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the “1933 Act”), and applicable state
securities laws.

 

AGREEMENT

 

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

 

1. Definitions.
Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Subscription
Agreement. As used in this Agreement, the following terms shall
have the following meanings:

 

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

 

(b) “Closing Date” shall have the
meaning set forth in the Subscription Agreement.

 

(c) “Effective Date” means the date
that the applicable Registration Statement has been declared
effective by the SEC.

 

(d) “Effectiveness Deadline” means (i)
with respect to the initial Registration Statement required to be
filed pursuant to Section 2(a), the earlier of the (A) 120th
calendar day after the Final Closing Date and (B) 2nd Business Day
after the date the Company is notified (orally or in writing,
whichever is earlier) by the SEC that such Registration Statement
will not be reviewed or will not be subject to further review and
(ii) with respect to any additional Registration Statements that
may be required to be filed by the Company pursuant to this
Agreement, the earlier of the (A) 60th calendar day following the
date on which the Company was required to file such additional
Registration Statement and (B) 2nd Business Day after the date the
Company is notified (orally or in writing, whichever is earlier) by
the SEC that such Registration Statement will not be reviewed or
will not be subject to further review; provided, however, if (but
only if) a Filing Failure did not occur, then such time periods
shall be tolled on a day-for-day basis for so long as the
Company’s audited financial statements are stale pursuant to
Regulation S-X Rule 3-12(b).

 

 

 

 

(e)  “Filing
Deadline” means (i) with respect to the initial
Registration Statement required to be filed pursuant to Section
2(a), the earlier of (x) the 90th Calendar Day after the Final
Closing Date; and (ii) with respect to any additional Registration
Statements that may be required to be filed by the Company pursuant
to this Agreement, the date on which the Company was required to
file such additional Registration Statement pursuant to the terms
of this Agreement.

 

(f) “Investor” means a Purchaser or any
transferee or assignee of any Registrable Securities, to whom a
Purchaser assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with
Section 9 and any transferee or assignee thereof to whom a
transferee or assignee of any Registrable Securities, assigns its
rights under this Agreement and who agrees to become bound by the
provisions of this Agreement in accordance with Section
9.

 

(g) “Person” means an individual, a
limited liability company, a partnership, a joint venture, a
corporation, or any other entity of any kind or nature whatsoever,
a trust, an unincorporated organization or a government or any
department or agency thereof.

 

(h) “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 of effectiveness of such
Registration Statement(s) by the SEC.

 

(i) “Registrable Securities” means (i)
the Shares, (ii) all Warrant Shares then issued and issuable upon
exercise of the Warrants (assuming on such date the Warrants are
exercised in full without regard to any exercise limitations
therein) and (iii) any capital stock of the Company issued or
issuable with respect to the Shares, or the Warrants, including,
without limitation, (1) as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise
and (2) shares of capital stock of the Company into which the
shares of Common Stock or the Warrants are exercised, converted or
exchanged and shares of capital stock of a successor entity into
which the shares of Common Stock or the Warrants are exercised,
converted or exchanged.

 

(j)  “Registration
Statement” means a registration statement or
registration statements of the Company filed under the 1933 Act
covering Registrable Securities.

 

(k) “Required Registration Amount”
means the sum of (i) the Shares issued and (ii) the maximum number
of Shares issued and issuable upon exercise of the Warrants as of
the Trading Day immediately preceding the applicable date of
determination (without taking into account any limitations on the
exercise of the Warrants set forth therein), all subject to
adjustment as provided in Section 2(d).

 

(l) “Rule 144” means Rule 144
promulgated by the SEC under the 1933 Act, as such rule may be
amended from time to time, or any other similar or successor rule
or regulation of the SEC that may at any time permit the Investors
to sell securities of the Company to the public without
registration.

 

(m) “Rule 415” means Rule 415
promulgated by the SEC under the 1933 Act, as such rule may be
amended from time to time, or any other similar or successor rule
or regulation of the SEC providing for offering securities on a
continuous or delayed basis.

 

C-2

 

 

(n) “SEC” means the United States
Securities and Exchange Commission or any successor
thereto.

 

2. Registration.

 

(a) Mandatory Registration. The
Company shall prepare and, as soon as practicable, but in no event
later than the Filing Deadline, file with the SEC an initial
Registration Statement on Form S-3 covering the resale of all of
the Registrable Securities, provided that such initial Registration
Statement shall register for resale at least the number of shares
of Common Stock equal to the Required Registration Amount as of the
date such Registration Statement is initially filed with the SEC,
provided further that if Form S-3 is unavailable for such a
registration, the Company shall use such other form as is required
by Section 2(c). Such initial Registration Statement, and each
other Registration Statement required to be filed pursuant to the
terms of this Agreement. The Company shall use its reasonable best
efforts to have such initial Registration Statement, and each other
Registration Statement required to be filed pursuant to the terms
of this Agreement, declared effective by the SEC as soon as
practicable, but in no event later than the applicable
Effectiveness Deadline for such Registration
Statement.

 

(b) Ineligibility to Use Form S-3.
In the event that Form S-3 is not available for the registration of
the resale of Registrable Securities hereunder, the Company shall
(i) register the resale of the Registrable Securities on Form S-1,
or on another appropriate form reasonably acceptable to the
Required Holders and (ii) undertake to register the resale of the
Registrable Securities on Form S-3 as soon as such form is
available, provided that the Company shall maintain the
effectiveness of all Registration Statements then in effect and the
availability for use of each prospectus contained therein until
such time as a Registration Statement on Form S-3 covering the
resale of all the Registrable Securities has been declared
effective by the SEC and the prospectus contained therein is
available for use.

 

(c) Sufficient Number of Shares
Registered. In the event the number of shares available
under any Registration Statement 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(h), the Company
shall amend such Registration Statement (if permissible), or file
with the SEC a new Registration Statement (on the short form
available therefor, if applicable), or both, so as to cover at
least the Required Registration Amount as of the Trading Day
immediately preceding the date of the filing of such amendment or
new Registration Statement, in each case, as soon as practicable,
but in any event not later than fifteen (15) days after the
necessity therefor arises. The Company shall use reasonable best
efforts to cause such amendment to such Registration Statement
and/or such new Registration Statement (as the case may be) to
become effective as soon as practicable following the filing
thereof with the SEC, but in no event later than the applicable
Effectiveness Deadline for such Registration Statement. For
purposes of the foregoing provision, the number of shares available
under a Registration Statement shall be deemed “insufficient
to cover all of the Registrable Securities” if at any time
the number of shares of Common Stock available for resale under the
applicable Registration Statement is less than the Required
Registration Amount. The calculation set forth in the foregoing
sentence shall be made without regard to any limitations on
exercise of the Warrants (and such calculation shall assume that
the Warrants are then fully exercisable into shares of Common Stock
at the then-prevailing applicable Exercise Price).

 

C-3

 

 

(d) Effect of Failure to File and Obtain
and Maintain Effectiveness of any Registration Statement. If
(i) a Registration Statement covering the resale of all of the
Registrable Securities required to be covered thereby (disregarding
any reduction pursuant to Section 2(e)) and required to be filed by
the Company pursuant to this Agreement is (A) not filed with the
SEC on or before the Filing Deadline for such Registration
Statement (a “Filing
Failure”) (it being understood that if the Company
files a Registration Statement without affording each Investor the
opportunity to review and comment on the same as required by
Section 3(c) hereof, the Company shall be deemed to not have
satisfied this clause (i)(A) and such event shall be deemed to be a
Filing Failure) or (B) not declared effective by the SEC on or
before the Effectiveness Deadline for such Registration Statement
(an “Effectiveness
Failure”) (it being understood that if on the Business
Day immediately following the Effective Date for such Registration
Statement the Company shall not have filed a “final”
prospectus for such Registration Statement with the SEC under Rule
424(b) in accordance with Section 3(b) (whether or not such a
prospectus is technically required by such rule), the Company shall
be deemed to not have satisfied this clause (i)(B) and such event
shall be deemed to be an Effectiveness Failure), (ii) other than
during an Allowable Grace Period (as defined below), on any day
after the Effective Date of a Registration Statement sales of all
of the Registrable Securities required to be included on such
Registration Statement (disregarding any reduction pursuant to
Section 2(e)) cannot be made pursuant to such Registration
Statement (including, without limitation, because of a failure to
keep such Registration Statement effective, a failure to disclose
such information as is necessary for sales to be made pursuant to
such Registration Statement, a suspension or delisting of (or a
failure to timely list) the shares of Common Stock on the Principal
Market (as defined in the Subscription Agreement), or a failure to
register a sufficient number of shares of Common Stock or by reason
of a stop order) or the prospectus contained therein is not
available for use for any reason (a “Maintenance Failure”), or (iii) if
the Company fails to file with the SEC any required reports under
Section 13 or 15(d) of the 1934 Act such that it is not in
compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable)
(a “Current Public
Information Failure”) as a result of which any of the
Investors are unable to sell those Registrable Securities included
in such Registration Statement without restriction under Rule 144
(including, without limitation, volume restrictions), then, as
partial relief for the damages to any holder by reason of any such
delay in, or reduction of, its ability to sell the underlying
shares of Common Stock (which remedy shall not be exclusive of any
other remedies available at law or in equity), the Company shall
issue to each holder of Registrable Securities relating to such
Registration Statement an amount in cash equal to three percent
(3.0%) of such holder’s Effective Purchase Price (1) on the
date of such Filing Failure, Effectiveness Failure, Maintenance
Failure or Current Public Information Failure, as applicable, and
(2) on every thirty (30) day anniversary of (I) a Filing Failure
until such Filing Failure is cured; (II) an Effectiveness Failure
until such Effectiveness Failure is cured; (III) a Maintenance
Failure until such Maintenance Failure is cured; and (IV) a Current
Public Information Failure until the earlier of (i) the date such
Current Public Information Failure is cured and (ii) such time that
such public information is no longer required pursuant to Rule 144
(in each case, pro rated for periods totaling less than thirty (30)
days). In no event shall the aggregate Registration Delay Payments
(as defined below) accruing under this Section 2(e) exceed ten
percent (15%) of such holder’s Effective Purchase Price. The
payments to which a holder of Registrable Securities shall be
entitled pursuant to this Section 2(e) are referred to herein as
“Registration Delay
Payments.” Following the initial Registration Delay
Payment for any particular event or failure (which shall be paid on
the date of such event or failure, as set forth above), without
limiting the foregoing, if an event or failure giving rise to the
Registration Delay Payments is cured prior to any thirty (30) day
anniversary of such event or failure, then such Registration Delay
Payment shall be made on the third (3rd) Business Day after such
cure. In the event the Company fails to make Registration Delay
Payments in a timely manner in accordance with the foregoing, such
Registration Delay Payments shall bear interest at the rate of one
and one-half percent (1.5%) per month (prorated for partial months)
until paid in full. Notwithstanding the foregoing, (i) no single
event or failure with respect to a particular Registration
Statement shall give rise to more than one type of Registration
Delay Payment with respect to such Registration Statement (other
than a Filing Failure and Effectiveness Failure relating to the
same Registration Statement), (ii) no Registration Delay Payments
shall be owed to an Investor (other than with respect to a
Maintenance Failure resulting from a suspension or delisting of (or
a failure to timely list) the shares of Common Stock on the
Principal Market) with respect to any period during which all of
such Investor’s Registrable Securities may be sold by such
Investor without restriction under Rule 144 (including, without
limitation, volume restrictions) and without the need for current
public information required by Rule 144(c)(1) (or Rule 144(i)(2),
if applicable, and (iii) with respect to any Registrable Securities
excluded from a Registration Statement by election of an
Investor.

 

C-4

 

 

(e) Offering. Notwithstanding
anything to the contrary contained in this Agreement, but subject
to the payment of the Registration Delay Payments pursuant to
Section 2(e), in the event the staff of the SEC (the
“Staff”) or the
SEC seeks to characterize any offering pursuant to a
Registration Statement filed pursuant to this Agreement as
constituting an offering of securities by, or on behalf of,
the Company, or in any other manner, such that the Staff
or the SEC do not permit such Registration Statement to
become effective and used for resales in a manner that does not
constitute such an offering and that permits the continuous resale
at the market by the Investors participating therein (or
as otherwise may be acceptable to each Investor) without being
named therein as an “underwriter,” then the Company
shall reduce the number of shares to be included in such
Registration Statement by all Investors until such time as the
Staff and the SEC shall so permit such Registration Statement
to become effective as aforesaid. In making such reduction,
the Company shall reduce the number of shares to be included by all
Investors on a pro rata basis (based upon the number of Registrable
Securities otherwise required to be included for each
Investor).  The Investors shall have the right to participate
or have their counsel participate in any meetings or discussions
with the Staff regarding the Staff’s position and to comment
or have their counsel comment on any written submission made to the
Staff with respect thereto. No such written submission shall be
made to the Staff to which an Investor’s counsel reasonably
objects. In addition, in the event that the Staff or the SEC
requires any Investor seeking to sell securities under a
Registration Statement filed pursuant to this Agreement to be
specifically identified as
an ”underwriter” in order to permit such
Registration Statement to become effective, and such Investor does
not consent to being so named as an underwriter in such
Registration Statement, then, in each such case, the
Company shall reduce the total number of Registrable
Securities to be registered on behalf
of such Investor, until such time as the Staff or
the SEC does not require such identification or until such Investor
accepts such identification and the manner thereof. Any
reduction pursuant to this paragraph will first reduce all
securities that are not Registrable Securities, if any such
securities are permitted by Required Holders to be included in
accordance with the terms of this Agreement. In the event of
any reduction in Registrable Securities pursuant to this
paragraph, an affected Investor shall have the right to
require, upon delivery of a written request to the Company signed
by such Investor, the Company to file a registration statement
within thirty (30) days of such request (subject to any
restrictions imposed by Rule 415 or required by the Staff
or the SEC) for resale by such Investor in a manner acceptable to
such Investor, and the Company shall, following such
request, cause to be and keep effective such registration
statement in the same manner as otherwise contemplated in this
Agreement for registration statements hereunder, in each case
until such time as: (i) all Registrable Securities held by such
Investor have been registered and sold pursuant to an
effective Registration Statement in a manner acceptable to such
Investor or (ii) all Registrable Securities may be resold by
such Investor without restriction (including, without
limitation, volume limitations) pursuant to Rule 144 (taking
account of any Staff position with respect to
“affiliate” status) and without the need for current
public information required by Rule 144(c)(1) (or Rule 144(i)(2),
if applicable) or (iii) such Investor agrees to be named as an
underwriter in any such Registration Statement in a manner
acceptable to such Investor as to all Registrable Securities held
by such Investor and that have not theretofore been included in a
Registration Statement under this Agreement (it being understood
that the special demand right under this sentence may be exercised
by an Investor multiple times and with respect to limited amounts
of Registrable Securities in order to permit the resale thereof by
such Investor as contemplated above).

 

C-5

 

 

(f) Piggyback Registrations.
Without limiting any obligation of the Company hereunder or under
the Subscription Agreement, if there is not an effective
Registration Statement covering all of the Registrable Securities
or the prospectus contained therein is not available for use and
the Company shall determine to prepare and file with the SEC a
registration statement relating to an offering for its own account
or the account of others under the 1933 Act of any of its equity
securities (other than on Form S-4 or Form S-8 (each as promulgated
under the 1933 Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition
of any entity or business or equity securities issuable in
connection with the Company’s stock option or other employee
benefit plans), then the Company shall deliver to each Investor a
written notice of such determination and, if within fifteen (15)
days after the date of the delivery of such notice, any such
Investor shall so request in writing, the Company shall include in
such registration statement all or any part of such Registrable
Securities such Investor requests to be registered; provided,
however, the Company shall not be required to register any
Registrable Securities pursuant to this Section 2(g) that are
eligible for resale pursuant to Rule 144 without restriction
(including, without limitation, volume restrictions) and without
the need for current public information required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) or that are the subject of a
then-effective Registration Statement.

 

(g) Allocation of Registrable
Securities. The initial number of Registrable Securities
included in any Registration Statement and any increase in the
number of Registrable Securities included therein shall be
allocated pro rata among the Investors based on the number of
Registrable Securities held by each Investor at the time such
Registration Statement covering such initial number of Registrable
Securities or increase thereof is declared effective by the SEC. In
the event that an Investor sells or otherwise transfers any of such
Investor’s Registrable Securities, each transferee or
assignee (as the case may be) that becomes an Investor shall be
allocated a pro rata portion of the then-remaining number of
Registrable Securities included in such Registration Statement for
such transferor or assignee (as the case may be). Any shares of
Common Stock included in a Registration Statement and which remain
allocated to any Person which 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.

 

3. Related
Obligations. The Company shall use reasonable 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 all the Registrable Securities (but in no event
later than the applicable Filing Deadline) and use reasonable best
efforts to cause such Registration Statement to become effective as
soon as practicable after such filing (but in no event later than
the Effectiveness Deadline). Subject to Allowable Grace Periods,
the Company shall keep each Registration Statement effective (and
the prospectus contained therein available for use) pursuant to
Rule 415 for resales by the Investors on a delayed or continuous
basis at then-prevailing market prices (and not fixed prices) at
all times until the earlier of (i) the date as of which all of the
Investors may sell all of the Registrable Securities required to be
covered by such Registration Statement (disregarding any reduction
pursuant to Section 2(e)) without restriction pursuant to Rule 144
(including, without limitation, volume restrictions) and without
the need for current public information required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) or (ii) the date on which the
Investors shall have sold all of the Registrable Securities covered
by such Registration Statement (the “Registration Period”).
Notwithstanding anything to the contrary contained in this
Agreement, the Company shall ensure that, when filed and at all
times while effective, each Registration Statement (including,
without limitation, all amendments and supplements thereto) and the
prospectus (including, without limitation, all amendments and
supplements thereto) used in connection with such Registration
Statement (1) 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 case
of prospectuses, in the light of the circumstances in which they
were made) not misleading and (2) will disclose (whether directly
or through incorporation by reference to other SEC filings to the
extent permitted) all material information regarding the Company
and its securities.

 

C-6

 

 

(b) Subject to Section
3(p) of this Agreement, the Company shall prepare and file with the
SEC such amendments (including, without limitation, post-effective
amendments) and supplements to each Registration Statement and the
prospectus used in connection with each such Registration
Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep each
such Registration Statement effective at all times during the
Registration Period for such Registration Statement, and, during
such period, comply with the provisions of the 1933 Act with
respect to the disposition of all Registrable Securities of the
Company required to be 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; provided, however, by 8:30 a.m. (New York time) on the
Business Day immediately following each Effective Date, the Company
shall file with the SEC in accordance with Rule 424(b) under the
1933 Act the final prospectus to be used in connection with sales
pursuant to the applicable Registration Statement (whether or not
such a prospectus is technically required by such rule) . In the
case of amendments and supplements to any Registration Statement
which are required to be filed pursuant to this Agreement
(including, without limitation, pursuant to this Section 3(b)) by
reason of the Company filing a report on Form 10-Q or Form 10-K or
any analogous report under the Securities Exchange Act of 1934, as
amended (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 on the same
day on which the 1934 Act report is filed which created the
requirement for the Company to amend or supplement such
Registration Statement.

 

(c) The Company shall
(A) permit legal counsel for each other Investor to review and
comment upon (i) each Registration Statement at least three (3)
Business Days prior to its filing with the SEC and (ii) all
amendments and supplements to each Registration Statement
(including, without limitation, the prospectus contained therein)
(except for Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q, 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 Registration Statement or
amendment or supplement thereto in a form to which any legal
counsel for any other Investor reasonably objects. The Company
shall promptly furnish to legal counsel for each such other
Investor, without charge, (i) copies of any correspondence from the
SEC or the Staff to the Company or its representatives relating to
each Registration Statement, provided that such correspondence
shall not contain any material, non-public information regarding
the Company or any of its Subsidiaries (as defined in the
Subscription Agreement), (ii) after the same is prepared and
filed with the SEC, one (1) copy of each Registration Statement and
any amendment(s) and supplement(s) thereto, including, without
limitation, financial statements and schedules, all documents
incorporated therein by reference, if requested by an Investor, and
all exhibits and (iii) upon the effectiveness of each
Registration Statement, one (1) copy of the prospectus included in
such Registration Statement and all amendments and supplements
thereto. The Company shall reasonably cooperate with legal counsel
for each other Investor in performing the Company’s
obligations pursuant to this Section 3.

 

C-7

 

 

(d) The Company shall
promptly furnish to each Investor whose Registrable Securities are
included in any Registration Statement, without charge, (i) after
the same is prepared and filed with the SEC, at least one (1) copy
of each Registration Statement and any amendment(s) and
supplement(s) thereto, including, without limitation, financial
statements and schedules, all documents incorporated therein by
reference, if requested by an Investor, all exhibits and each
preliminary prospectus, (ii) upon the effectiveness of each
Registration Statement, one (1) copy of the prospectus included in
such Registration Statement and all amendments and supplements
thereto (or such other number of copies as such Investor may
reasonably request from time to time) and (iii) such other
documents, including, without limitation, copies of any preliminary
or final prospectus, as such Investor may reasonably request from
time to time in order to facilitate the disposition of the
Registrable Securities owned by such Investor, provided that any
such item which is available on the SEC’s EDGAR System (or
successor thereto) need not be furnished in physical
form.

 

(e) Upon the reasonable
request of an Investor, the Company shall use reasonable best
efforts to (i) register and qualify, unless an exemption from
registration and qualification applies, the resale by Investors of
the Registrable Securities covered by a Registration Statement
under such other securities or “blue sky” laws of all
applicable jurisdictions in the United States, (ii) prepare and
file in those jurisdictions, such amendments (including, without
limitation, post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain
the effectiveness thereof during the Registration Period, (iii)
take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for
sale in such jurisdictions; provided, however, 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 such jurisdiction, or (z)
file a general consent to service of process in any such
jurisdiction. The Company shall promptly notify each Investor who
holds Registrable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under
the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such
purpose.

 

(f) The Company shall
notify each Investor in writing of the happening of any event, as
promptly as practicable after becoming aware of such event, as a
result of which the prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any
material, non-public information regarding the Company or any of
its Subsidiaries), and, subject to Section 3(p), promptly prepare a
supplement or amendment to such Registration Statement and such
prospectus contained therein to correct such untrue statement or
omission and deliver one (1) copy of such supplement or amendment
to each Investor (or such other number of copies as such Investor
may reasonably request). The Company shall also promptly notify
each Investor in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, when a
Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to
each Investor by facsimile or e-mail on the same day of such
effectiveness and by overnight mail), and when the Company receives
written notice from the SEC that a Registration Statement or any
post-effective amendment will be reviewed by the SEC, (ii) of any
request by the SEC for amendments or supplements to a Registration
Statement or related prospectus or related information, (iii) of
the Company’s reasonable determination that a post-effective
amendment to a Registration Statement would be appropriate; and
(iv) of the receipt of any request by the SEC or any other federal
or state governmental authority for any additional information
relating to the Registration Statement or any amendment or
supplement thereto or any related prospectus. The Company shall
respond as promptly as practicable to any comments received from
the SEC with respect to each Registration Statement or any
amendment thereto (it being understood and agreed that the
Company’s response to any such comments shall be delivered to
the SEC no later than three (3) Business Days after the receipt
thereof).

 

C-8

 

 

(g) The Company shall
(i) use reasonable best efforts to prevent the issuance of any stop
order or other suspension of effectiveness of each Registration
Statement or the use of any prospectus contained therein, or the
suspension of the qualification, or the loss of an exemption from
qualification, of any of the Registrable Securities for sale in any
jurisdiction and, if such an order or suspension is issued, to
obtain the withdrawal of such order or suspension at the earliest
possible moment and (ii) immediately notify each Investor who holds
Registrable Securities of the issuance of such order and the
resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such
purpose.

 

(h) The Company shall
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 or is otherwise required to be disclosed in
such Registration Statement pursuant to the 1933 Act, (iii) the
release of such information is ordered pursuant to a subpoena or
other final, non-appealable order from a court or governmental body
of competent jurisdiction, or (iv) such information has been made
generally available to the public other than by disclosure in
violation of this Agreement or any other Transaction Document. 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 such Investor’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a
protective order for, such information.

 

(i) Without limiting
any obligation of the Company under the Subscription Agreement, the
Company shall use reasonable best efforts either to (i) cause all
of the Registrable Securities covered by each Registration
Statement to be listed on each securities exchange on which
securities of the same class or series issued by the Company are
then listed, if any, if the listing of such Registrable Securities
is then permitted under the rules of such exchange, (ii) secure
designation and quotation of all of the Registrable Securities
covered by each Registration Statement on the OTC Bulletin Board,
or (iii) if, despite the Company’s efforts to satisfy the
preceding clauses (i) or (ii), the Company is unsuccessful in
satisfying the preceding clauses (i) or (ii), without limiting the
generality of the foregoing, to use reasonable best efforts to
arrange for at least two market makers to register with the
Financial Industry Regulatory Authority (“FINRA”) as such with respect to
such Registrable Securities. In addition, the Company shall
cooperate with each Investor and any broker or dealer through which
any such Investor proposes to sell its Registrable Securities in
effecting a filing with FINRA pursuant to FINRA Rule 5110 as
requested by such Investor. The Company shall pay all fees and
expenses in connection with satisfying its obligations under this
Section 3(i).

 

(j) The Company shall
cooperate with the Investors who hold Registrable Securities being
offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates representing the
Registrable Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations
or amounts (as the case may be) as the Investors may reasonably
request from time to time and registered in such names as the
Investors may request.

 

C-9

 

 

(k) If requested by an
Investor, the Company shall as soon as practicable after receipt of
notice from such Investor and subject to Section 3(p) hereof, (i)
incorporate in a prospectus supplement or post-effective amendment
such information as an Investor reasonably requests to be included
therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect
to the number of Registrable Securities being 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) 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) supplement or make amendments to any
Registration Statement or prospectus contained therein if
reasonably requested by an Investor holding any Registrable
Securities.

 

(l) The Company shall
use reasonable 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.

 

(m) 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 each
Registration Statement.

 

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

 

(o) Within one (1)
Business Day after a Registration Statement which covers
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.

 

(p) Notwithstanding
anything to the contrary herein (but subject to the last sentence
of this Section 3(p)), at any time after the Effective Date of a
particular Registration Statement, the Company may delay the
disclosure of material, non-public information concerning the
Company or any of its Subsidiaries the disclosure of which at the
time is not, in the good faith opinion of the board of directors of
the Company, in the best interest of the Company and, in the
opinion of counsel to the Company, otherwise required (a
“Grace Period”),
provided that the Company shall promptly notify the Investors in
writing of the (i) existence of material, non-public information
giving rise to a Grace Period (provided that in each such notice
the Company shall not disclose the content of such material,
non-public information to any of the Investors) and the date on
which such Grace Period will begin and (ii) date on which such
Grace Period ends, provided further that (I) no Grace Period shall
exceed ten (10) consecutive days and during any three hundred sixty
five (365) day period all such Grace Periods shall not exceed an
aggregate of thirty (30) days, (II) the first day of any Grace
Period must be at least five (5) Trading Days after the last day of
any prior Grace Period and (III) no Grace Period may exist during
the sixty (60) Trading Day period immediately following the
Effective Date of such Registration Statement (provided that such
sixty (60) Trading Day period shall be extended by the number of
Trading Days during such period and any extension thereof
contemplated by this proviso during which such Registration
Statement is not effective or the prospectus contained therein is
not available for use) (each, an “Allowable Grace Period”). For
purposes of determining the length of a Grace Period above, such
Grace Period shall begin on and include the date the Investors
receive the notice referred to in clause (i) above and shall end on
and include the later of the date the Investors receive the notice
referred to in clause (ii) above and the date referred to in such
notice. The provisions of Section 3(g) hereof shall not be
applicable during the period of any Allowable Grace Period. Upon
expiration of each 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 contained in this Section 3(p), the Company shall
cause its transfer agent to deliver unlegended shares of Common
Stock to a transferee of an Investor in accordance with the terms
of the Subscription Agreement in connection with any sale of
Registrable Securities with respect to which such Investor has
entered into a contract for sale, and delivered a copy of the
prospectus included as part of the particular Registration
Statement to the extent applicable, prior to such Investor’s
receipt of the notice of a Grace Period and for which the Investor
has not yet settled.

 

C-10

 

 

(q) The Company shall
use reasonable best efforts to maintain eligibility for use of Form
S-3 (or any successor form thereto) for the registration of the
resale of all the Registrable Securities.

 

(r) The Company shall
take all other reasonable actions necessary to expedite and
facilitate disposition by each Investors of its Registrable
Securities pursuant to each Registration Statement.

 

4. Obligations of the
Investors.

 

(a) At least five (5)
Business Days prior to the first anticipated filing date of each
Registration Statement, the Company shall notify each Investor in
writing of the information the Company requires from each such
Investor with respect to such Registration Statement. It shall be a
condition precedent to the obligations of the Company to complete
the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor
shall furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it, as shall be
reasonably required to effect and maintain the effectiveness of the
registration of such Registrable Securities and shall execute such
documents in connection with such registration as the Company may
reasonably request.

 

(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 each
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 3(f), such Investor will immediately discontinue
disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such
Investor’s receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(g) or the first
sentence of Section 3(f) or receipt of notice that no supplement or
amendment is required. Notwithstanding anything to the contrary in
this Section 4(c), the Company shall cause its transfer agent to
deliver unlegended shares of Common Stock to a transferee of an
Investor in accordance with the terms of the Subscription Agreement
in connection with any sale of Registrable Securities with respect
to which such 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 such Investor has not
yet settled.

 

(d) Each Investor
covenants and agrees that it will comply with the prospectus
delivery requirements of the 1933 Act as applicable to it in
connection with sales of Registrable Securities pursuant to a
Registration Statement.

 

5. Expenses of
Registration. All reasonable expenses, other than underwriting
discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and
3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, FINRA filing
fees (if any) and fees and disbursements of counsel for the Company
shall be paid by the Company.

 

C-11

 

 

6. Indemnification.

 

(a) To the fullest
extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend each Investor and each of its
directors, officers, managers, shareholders, members, partners,
employees, agents, advisors, representatives (and any other Persons
with a functionally equivalent role of a Person holding such titles
notwithstanding the lack of such title or any other title) and each
Person, if any, who controls such Investor within the meaning of
the 1933 Act or the 1934 Act and each of the directors, officers,
managers, shareholders, members, partners, employees, agents,
advisors, representatives (and any other Persons with a
functionally equivalent role of a Person holding such titles
notwithstanding the lack of such title or any other title) of such
controlling Persons (each, an “Indemnified Person”), against any
losses, obligations, claims, damages, liabilities, contingencies,
judgments, fines, penalties, charges, costs (including, without
limitation, court costs, reasonable attorneys’ fees and costs
of defense and investigation), amounts paid in settlement or
expenses, joint or several, (collectively, “Claims”) incurred in
investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or
other regulatory agency, body or the SEC, whether pending or
threatened, whether or not an indemnified party is or may be a
party thereto (“Indemnified
Damages”), to which any of them may become subject
insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of
a material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other
“blue sky” laws of any jurisdiction in which
Registrable Securities are offered (“Blue Sky Filing”), or the omission
or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
(ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the
final prospectus (as amended or supplemented, if the Company files
any amendment thereof or supplement thereto with the SEC) or the
omission or alleged omission to state therein any material fact
necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not
misleading or (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any other law, including,
without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the
Registrable Securities pursuant to a Registration Statement (the
matters in the foregoing clauses (i) through (iii) being,
collectively, “Violations”). Subject to 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): (i) shall
not apply to a Claim by an Indemnified Person 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 for such Indemnified Person expressly for
use in connection with the preparation of such Registration
Statement or any such amendment thereof or supplement thereto, or
any preliminary or final prospectus, and (ii) shall not be
available to a particular Investor to the extent such Claim is
based on a failure of such Investor to deliver or to cause to be
delivered the prospectus made available by the Company (to the
extent applicable), including, without limitation, a corrected
prospectus, if such prospectus or corrected prospectus was timely
made available by the Company pursuant to Section 3(d) and then
only if, and to the extent that, following the receipt of the
corrected prospectus no grounds for such Claim would have existed;
and (iii) 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 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 the transfer of any of the
Registrable Securities by any of the Investors pursuant to Section
9.

 

C-12

 

 

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

 

(c) Promptly after
receipt by an Indemnified Person or Indemnified Party (as the case
may be) under this Section 6 of notice of the commencement of any
action or proceeding (including, without limitation, any
governmental action or proceeding) involving a Claim, such
Indemnified Person or Indemnified Party (as the case may be) shall,
if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with
any other indemnifying party similarly noticed, to assume control
of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified
Party (as the case may be); provided, however, an Indemnified
Person or Indemnified Party (as the case may be) shall have the
right to retain its own counsel with the fees and expenses of such
counsel to be paid by the indemnifying party if: (i) the
indemnifying party has agreed in writing to pay such fees and
expenses; (ii) the indemnifying party shall have failed promptly to
assume the defense of such Claim and to employ counsel reasonably
satisfactory to such Indemnified Person or Indemnified Party (as
the case may be) in any such Claim; or (iii) the named parties to
any such Claim (including, without limitation, any impleaded
parties) include both such Indemnified Person or Indemnified Party
(as the case may be) and the indemnifying party, and such
Indemnified Person or such Indemnified Party (as the case may be)
shall have been advised by counsel that a conflict of interest is
likely to exist if the same counsel were to represent such
Indemnified Person or such Indemnified Party and the indemnifying
party (in which case, if such Indemnified Person or such
Indemnified Party (as the case may be) notifies the indemnifying
party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, then the indemnifying party
shall not have the right to assume the defense thereof and such
counsel shall be at the expense of the indemnifying party, provided
further that in the case of clause (iii) above the indemnifying
party shall not be responsible for the reasonable fees and expenses
of more than one (1) separate legal counsel for such Indemnified
Person or Indemnified Party (as the case may be). The Indemnified
Party or Indemnified Person (as the case may be) shall reasonably
cooperate with the indemnifying party in connection with any
negotiation or defense of any such action or Claim by the
indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the Indemnified Party or
Indemnified Person (as the case may be) which relates to such
action or Claim. The indemnifying party shall keep the Indemnified
Party or Indemnified Person (as the case may be) reasonably
apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party
shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent; provided,
however, the indemnifying party shall not unreasonably withhold,
delay or condition its consent. 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 which
does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party or Indemnified
Person (as the case may be) of a release from all liability in
respect to such Claim or litigation, and such settlement shall not
include any admission as to fault on the part of the Indemnified
Party. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person (as the case may be) with
respect to all third parties, firms or corporations relating to the
matter for which indemnification has been made. The failure to
deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified
Person or Indemnified Party (as the case may be) under this Section
6, except to the extent that the indemnifying party is materially
and adversely prejudiced in its ability to defend such action.
Notwithstanding anything to the contrary contained above or
otherwise in this Agreement, a Purchaser shall be entitled, as to
itself and any of its related Indemnified Parties, including
without limitation its agents and representatives, maintain the
control of the defense of any action for which it (or they) may
seek indemnification hereunder, and the Company and its counsel
shall fully cooperate in such defense as such Purchaser and its
counsel may request, all at the cost and expense of the Company
(including without limitation, the attorneys’ fees and other
costs and expenses of the Purchasers and their related Indemnified
Parties’ legal counsel). Any amounts for which the Company is
responsible pursuant to the immediately preceding sentence shall be
paid promptly to, or as directed by, such Purchaser from time to
time, and may be offset by such Purchaser, at its discretion,
against any amounts from time to time owed by such Purchaser to the
Company under the Transaction Documents.

 

C-13

 

 

(d) No Person involved
in the sale of Registrable Securities who 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
indemnification from any Person involved in such sale of
Registrable Securities who is not guilty of fraudulent
misrepresentation.

 

(e) The indemnification
required by this Section 6 shall be made by periodic payments of
the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are
incurred.

 

(f) The indemnity and
contribution 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: (i) no contribution shall be
made under circumstances where the maker would not have been liable
for indemnification under the fault standards set forth in Section
6 of this Agreement, (ii) 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 such sale of Registrable Securities who
was not guilty of fraudulent misrepresentation; and (iii)
contribution by any seller of Registrable Securities shall be
limited in amount to the amount of net proceeds received by such
seller from the applicable sale of such Registrable Securities
pursuant to such Registration Statement. Notwithstanding the
provisions of this Section 7, no Investor shall be required to
contribute, in the aggregate, any amount in excess of the amount by
which the net proceeds actually received by such Investor from the
applicable sale of the Registrable Securities subject to the Claim
exceeds the amount of any damages that such Investor has otherwise
been required to pay, or would otherwise be required to pay under
Section 6(b), by reason of such untrue or alleged untrue statement
or omission or alleged omission.

 

8. Reports Under the
1934 Act. With a view to making available to the Investors the
benefits of Rule 144, the Company agrees to:

 

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

 

(b) file with the SEC
in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company
remains subject to such requirements (it being understood and
agreed that nothing herein shall limit any obligations of the
Company under the Subscription Agreement) and the filing of such
reports and other documents is required for the applicable
provisions of Rule 144; and

 

C-14

 

 

(c) furnish to each
Investor so long as such Investor owns Registrable Securities,
promptly upon request, (i) a written statement by the Company, if
true, that it has complied with the reporting, submission and
posting requirements of Rule 144 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 with the SEC if
such reports are not publicly available via EDGAR, and (iii) such
other information as may be reasonably requested to permit the
Investors to sell such securities pursuant to Rule 144 without
registration.

 

9. Assignment of
Registration Rights. All or any portion of the rights under this
Agreement shall be automatically assignable by each Investor to any
transferee or assignee (as the case may be) of all or any portion
of such Investor’s Registrable Securities if: (i) such
Investor agrees in writing with such transferee or assignee (as the
case may be) to assign all or any portion of such rights, and a
copy of such agreement is furnished to the Company within a
reasonable time after such transfer or assignment (as the case may
be); (ii) the Company is, within a reasonable time after such
transfer or assignment (as the case may be), furnished with written
notice of (a) the name and address of such transferee or assignee
(as the case may be), and (b) the securities with respect to which
such registration rights are being transferred or assigned (as the
case may be); (iii) immediately following such transfer or
assignment (as the case may be) the further disposition of such
securities by such transferee or assignee (as the case may be) is
restricted under the 1933 Act or applicable state securities laws
if so required; (iv) at or before the time the Company receives the
written notice contemplated by clause (ii) of this sentence such
transferee or assignee (as the case may be) agrees in writing with
the Company to be bound by all of the provisions contained herein;
(v) such transfer or assignment (as the case may be) shall have
been made in accordance with the applicable requirements of the
Subscription Agreement; and (vi) such transfer or assignment (as
the case may be) shall have been conducted in accordance with all
applicable federal and state securities laws.

 

10. Amendment of
Registration Rights. Provisions of this Agreement may be amended
only with the written consent of the Company and the Required
Holders. Any amendment effected in accordance with this Section 10
shall be binding upon each Investor and the Company, provided that
no such amendment shall be effective to the extent that it (1)
applies to less than all of the holders of the holders of
Registrable Securities, (2) imposes any monetary obligation or
liability, or any material obligation or liability, on any Investor
without such Investor’s prior written consent (which may be
granted or withheld in such Investor’s sole discretion) or
(3) applies retroactively. No waiver shall be effective unless it
is in writing and signed by an authorized representative of the
waiving party, provided that the Required Holders (in a writing
signed by all of the Required Holders) may waive any provision of
this Agreement, and any waiver of any provision of this Agreement
made in conformity with the provisions of this Section 10 shall be
binding on each Investor, provided that no such waiver shall be
effective to the extent that it (1) applies to less than all the
Investors (unless a party gives a waiver as to itself only) or (2)
imposes any monetary obligation or liability, or any material
obligation or liability, on any Investor without such
Investor’s prior written consent (which may be granted or
withheld in such Investor’s sole discretion). No
consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of this
Agreement unless the same consideration also is offered to all of
the parties to this Agreement.

 

 

C-15

 

 

11. Miscellaneous.

 

(a) Solely for purposes
of this Agreement, a Person is deemed to be a holder of Registrable
Securities whenever such Person owns, or is deemed to own, of
record such Registrable 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 such record owner of such Registrable
Securities.

 

(b) Any notices,
consents, waivers or other communications required or permitted to
be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party);
(iii) with respect to Section 3(c), by e-mail (provided
confirmation of transmission is electronically generated and kept
on file by the sending party); or (iv) one (1) Business Day after
deposit with a nationally recognized overnight delivery service
with next day delivery specified, in each case, properly addressed
to the party to receive the same. The addresses, facsimile numbers
and e-mail addresses for such communications shall be:

 

If to
the Company:

 

SANUWAVE Health,
Inc.

3360
Martin Farm Road, Suite 100

Suwanee, GA
30024

Facsimile: (404)
419-8634

E-mail
address: lisa.sundstrom@sanuwave.com

Attention: Chief
Financial Officer

 

With a
copy (for informational purposes only) to:

 

Morrison &
Foerster LLP

425
Market Street

San
Francisco, California 94105-2482

Facsimile: (415)
268-7522

E-mail
address: mindick@mofo.com

Attention: Murray
A. Indick

 

If to
the Transfer Agent:

 

Action
Stock Transfer Corp.

7069 S.
Highland Drive, Suite 300

Salt
Lake City, Utah 84121

Facsimile: (801)
274-1099

E-mail
address: jb@actionstocktransfer.com

Attention: Justeene
Blankenship

 

C-16

 

 

If to a
Purchaser, to its address, facsimile number or e-mail address (as
the case may be) set forth on the Schedule of Purchasers attached
to the Subscription Agreement, with copies to such
Purchaser’s representatives as set forth on the Schedule of
Purchasers, or to such other address and/or facsimile number 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. Written confirmation of
receipt (A) given by the recipient of such notice, consent, waiver
or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine or e-mail
transmission containing the time, date and recipient facsimile
number or e-mail address or (C) provided by a courier or overnight
courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or
(iii) above, respectively.

 

(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. The Company and each
Investor acknowledge and agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that each party hereto shall be
entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement by any other party
hereto and to enforce specifically the terms and provisions hereof
(without the necessity of showing economic loss and without any
bond or other security being required), this being in addition to
any other remedy to which any party may be entitled by law or
equity.

 

(d) All questions
concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State
of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of
New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in
an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of
this Agreement in any other jurisdiction. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, 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. 

 

C-17

 

 

(e) This Agreement, the
other Transaction Documents, the schedules and exhibits attached
hereto and thereto and the instruments referenced herein and
therein constitute the entire agreement among the parties hereto
and thereto solely 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, the other Transaction Documents, the
schedules and exhibits attached hereto and thereto and the
instruments referenced herein and therein supersede all prior
agreements and understandings among the parties hereto solely with
respect to the subject matter hereof and thereof; provided,
however, nothing contained in this Agreement or any other
Transaction Document shall (or shall be deemed to) (i) have any
effect on any agreements any Investor has entered into with, or any
instrument that any Investor received from, the Company or any of
its Subsidiaries prior to the date hereof with respect to any prior
investment made by such Investor in the Company, (ii) waive, alter,
modify or amend in any respect any obligations of the Company or
any of its Subsidiaries or any rights of or benefits to any
Investor or any other Person in any agreement entered into prior to
the date hereof between or among the Company and/or any of its
Subsidiaries and any Investor or any instrument that any Investor
received prior to the date hereof from the Company and/or any of
its Subsidiaries and all such agreements and instruments shall
continue in full force and effect or (iii) limit any obligations of
the Company under any of the other Transaction
Documents.

 

(f) Subject to
compliance with Section 9 (if applicable), this Agreement shall
inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto. This
Agreement is not for the benefit of, nor may any provision hereof
be enforced by, any Person, other than the parties hereto, their
respective permitted successors and assigns and the Persons
referred to in Sections 6 and 7 hereof.

 

(g) The headings in
this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. Unless the context
clearly indicates otherwise, each pronoun herein shall be deemed to
include the masculine, feminine, neuter, singular and plural forms
thereof. The terms “including,” “includes,”
“include” and words of like import shall be construed
broadly as if followed by the words “without
limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like
import refer to this entire Agreement instead of just the provision
in which they are found.

 

(h) This Agreement may
be executed in two or more counterparts, all of which shall be
considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to
the other party. In the event that any signature is delivered by
facsimile transmission or by an e-mail which contains a portable
document format (.pdf) file of an executed signature page, such
signature page 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 signature page were an
original thereof.

 

(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 any 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.

 

C-18

 

 

(j) 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. Notwithstanding
anything to the contrary set forth in Section 10, terms used in
this Agreement but defined in the other Transaction Documents shall
have the meanings ascribed to such terms on the Closing Date in
such other Transaction Documents unless otherwise consented to in
writing by each Investor.

 

(k) All consents and
other determinations required to be made by the Investors pursuant
to this Agreement shall be made, unless otherwise specified in this
Agreement, by the Required Holders.

 

(l) The obligations of
each Investor under this Agreement and the other Transaction
Documents are several and not joint with the obligations of any
other Investor, and no Investor shall be responsible in any way for
the performance of the obligations of any other Investor under this
Agreement or any other Transaction Document. Nothing contained
herein or in any other Transaction Document, and no action taken by
any Investor pursuant hereto or thereto, shall be deemed to
constitute the Investors as, and the Company acknowledges that the
Investors do not so constitute, a partnership, an association, a
joint venture or any other kind of group or entity, or create a
presumption that the Investors are in any way acting in concert or
as a group or entity with respect to such obligations or the
transactions contemplated by the Transaction Documents or any
matters, and the Company acknowledges that the Investors are not
acting in concert or as a group, and the Company shall not assert
any such claim, with respect to such obligations or the
transactions contemplated by this Agreement or any of the other the
Transaction Documents. Each Investor shall be entitled to
independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any
other Transaction Documents, and it shall not be necessary for any
other Investor to be joined as an additional party in any
proceeding for such purpose. The use of a single agreement with
respect to the obligations of the Company contained herein was
solely in the control of the Company, not the action or decision of
any Investor, and was done solely for the convenience of the
Company and not because it was required or requested to do so by
any Investor. It is expressly understood and agreed that each
provision contained in this Agreement and in each other Transaction
Document is between the Company and an Investor, solely, and not
between the Company and the Investors collectively and not between
and among Investors.

 

[Signature
pages follow.]

 

C-19

 

 

IN WITNESS WHEREOF, the Purchasers and the Company have
caused their respective signature page to this Registration Rights
Agreement to be duly executed as of the date first written
above.

 

 

	

SANUWAVE HEALTH, INC.

 

 

	

Address
for Notice:

 

3360
Martin Farm Road, Suite 100

Suwanee,
GA 30024

Attn:
Chief Financial Officer

E-mail
lisa.sundstrom@sanuwave.com

	

By:________________________

     Name:
Lisa E. Sundstrom

     Title:
Chief Financial Officer

 

	

Fax:
678-569-0881

	
 

	
 

 

 

[Signature
Page to Registration Rights Agreement]

 

 

IN WITNESS WHEREOF, the undersigned has
caused this Registration Rights Agreement to be duly executed by an
authorized signatory as of the date first indicated
above.

 

Name of Purchaser:                                                                                                                                 

 

Signature of Authorized Signatory of Purchaser:                                                                                    

 

Name of Authorized Signatory:  
                                                                                                             

 

Title of Authorized Signatory:                                                                                                                  

 

Email Address of Authorized
Signatory:                                                                                                 

 

Facsimile Number of Authorized Signatory:
_______________________________

 

Address for Notice to Purchaser:

 

 

 

 

[Signature
Page to Registration Rights Agreement]trxc-ex44_578.htm

 

Exhibit 4.4

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTION 5.3 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

WARRANT TO PURCHASE COMMON STOCK

Company:  TransEnterix, Inc., a Delaware corporation

Number of Shares:  950,000, subject to adjustment as provided herein

Type/Series of Stock:  Common Stock 

Exercise Price:  $1.00 per share 

Issue Date:  September 12, 2017

	
Expiration Date:  September 12, 2027
	
See also Section 5.1(b).

Services Agreement:  This Warrant to Purchase Common Stock (this “Warrant”) is issued in connection with that certain Services Agreement dated September 12, 2017 between _______________ and the Company (as amended and/or modified and in effect from time to time, the “Agreement”).

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, ____________ (“__________” and, together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “Holder”) is entitled to purchase up to such number of fully paid and non-assessable shares (the “Shares”) of the Common Stock, par value $0.001 per share (the “Common Stock”) of TRANSENTERIX, INC. (the “Company”), at the above-stated Exercise Price, all as set forth above and as adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant.

SECTION 1.  EXERCISE.

1.1Vesting.  This Warrant shall vest as follows:  (a) twenty-five percent (25%) on the date of execution of the Agreement; (b) fifty percent (50%) upon completion of hiring of the Sales Team (as defined in the Agreement); and (c) the remaining twenty-five percent (25%) upon achieving cumulative Products (as defined in the Agreement) revenue of $15 million; provided, however, that if the Company terminates the Agreement for any reason other than a breach by the Holder, or there is a Change in Control (as defined in the Agreement) of the Company any unvested portion of this Warrant will accelerate and vest to the date of such termination or Change in Control.  

1.2Method of Exercise.  Holder may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in Section 1.2, a check, wire transfer of same-day funds (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Exercise Price for the Shares being purchased.

 

 

1.3Cashless Exercise.  On any exercise of this Warrant, in lieu of payment of the aggregate Exercise Price in the manner as specified in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised.  Thereupon, the Company shall issue to the Holder such number of fully paid and non-assessable Shares as are computed using the following formula:

X = Y(A-B)/A

where:

	
 
	
X =
	
the number of Shares to be issued to the Holder;

	
 
	
Y =
	
the number of Shares with respect to which this Warrant is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Exercise Price);

	
 
	
A =
	
the Fair Market Value (as determined pursuant to Section 1.3 below) of one Share; and

	
 
	
B =
	
the Exercise Price.

1.4Fair Market Value.  If the Common Stock is then traded or quoted on a nationally recognized securities exchange, inter-dealer quotation system or over-the-counter market (a “Trading Market”), the fair market value of a Share shall be the closing price or last sale price of a share of Common Stock reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company.  If the Company’s Common Stock is not traded in a Trading Market, the Board of Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment.

1.5Delivery of Certificate and New Warrant.  Within a reasonable time after Holder exercises this Warrant in the manner set forth in Section 1.1 or 1.2 above, the Company shall issue the Shares by electronic delivery or deliver to Holder a certificate representing the Shares issued to Holder upon such exercise and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor representing the Shares not so acquired.

1.6Replacement of Warrant.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of mutilation, on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount.

1.7Treatment of Warrant Upon Acquisition of Company.

(a)Acquisition.  For the purpose of this Warrant, “Acquisition” means any transaction or series of related transactions involving: (i) the sale, lease, exclusive license, or other disposition of all or substantially all of the assets of the Company (ii) any merger or consolidation of the Company into or with another person or entity (other than a merger or consolidation effected exclusively to change the Company’s domicile), or any other corporate reorganization, in which the stockholders of the Company in their capacity as such immediately prior to such merger, consolidation or reorganization, own less than a majority of the Company’s (or the surviving or successor entity’s) outstanding voting power immediately after such merger, consolidation or reorganization (or, if such Company stockholders beneficially own a majority of the outstanding voting power of the surviving or successor entity as of immediately after such merger, consolidation or reorganization, such surviving or successor entity is not the Company); or (iii) any sale or other transfer by the stockholders of the Company of shares representing at least a majority of the Company’s then-total outstanding combined voting power.  “Acquisition” shall not include any transaction the primary purpose of which is a bona fide equity financing of the Company.

2

 

(b)Treatment of Warrant at Acquisition.  In the event of an Acquisition in which the consideration to be received by the Company’s stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “Cash/Public Acquisition”), either (i) Holder shall exercise this Warrant pursuant to Section 1.1 and/or 1.2 and such exercise will be deemed effective immediately prior to and contingent upon the consummation of such Acquisition or (ii) if Holder elects not to exercise the Warrant, this Warrant will expire immediately prior to the consummation of such Acquisition.

(c)The Company shall provide Holder with written notice of its request relating to the Cash/Public Acquisition (together with such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such contemplated Cash/Public Acquisition giving rise to such notice), which is to be delivered to Holder not less than five 95) Business Days prior to the closing of the proposed Cash/Public Acquisition.  In the event the Company does not provide such notice, then if, immediately prior to the Cash/Public Acquisition, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above would be greater than the Exercise Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall promptly notify the Holder of the number of Shares (or such other securities) issued upon such exercise to the Holder and Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as the date thereof.

(d)Upon the closing of any Acquisition other than a Cash/Public Acquisition as defined above, the surviving or successor entity shall assume this Warrant and the obligations of the Company hereunder, and this Warrant shall, from and after such closing, be exercisable for the same class, number and kind of securities, cash and other property as would have been paid for or in respect of the Shares issuable (as of immediately prior to such closing) upon exercise in full hereof as if such Shares had been issued and outstanding on and as of such closing, at an aggregate Exercise Price equal to the aggregate Exercise Price in effect as of immediately prior to such closing; and subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant.

(e)As used in this Warrant, “Marketable Securities” means securities meeting all of the following requirements: (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then current in its filing of all required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this Warrant on or prior to the closing thereof is then traded in Trading Market, and (iii) Holder would be able to publicly re-sell, within six (6) months and one day following the closing of such Acquisition, all of the issuer’s shares and/or other securities that would be received by Holder in such Acquisition were Holder to exercise this Warrant in full on or prior to the closing of such Acquisition.

SECTION 2.  ADJUSTMENTS TO THE SHARES AND WARRANT PRICE.

2.1Stock Dividends, Splits, Etc.  If the Company declares or pays a dividend or distribution on the outstanding shares of the Common Stock payable in Common Stock or other securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities and property which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred.  If the Company subdivides the outstanding shares of the Common Stock by reclassification or otherwise into a greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Exercise Price shall be proportionately decreased.  If the outstanding shares of the Common Stock are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Exercise Price shall be proportionately increased and the number of Shares shall be proportionately decreased.

2.2Reclassification, Exchange, Combinations or Substitution.  Upon any event whereby all of the outstanding shares of the Common Stock are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this Warrant will be exercisable for the number, class and series of Company securities that Holder would 

3

 

have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant.  The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations substitutions, replacements or other similar events.

2.3No Fractional Share.  No fractional Share shall be issuable upon exercise of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share.  If a fractional Share interest arises upon any exercise of the Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above) of a full Share, less (ii) the then-effective Exercise Price.

2.4Notice/Certificate as to Adjustments.  Upon each adjustment of the Exercise Price, Common Stock and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Exercise Price, Common Stock and/or number of Shares and facts upon which such adjustment is based.  The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer, including computations of such adjustment and the Exercise Price, Common Stock and number of Shares in effect upon the date of such adjustment.

SECTION 3.  REPRESENTATIONS AND COVENANTS OF THE COMPANY.

3.1Representations and Warranties.  The Company represents and warrants to, and agrees with, the Holder as follows that all Shares which may be issued upon the exercise of this Warrant, and all securities, if any, issuable upon conversion of the Shares, shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.  The Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of shares of the Common Stock and other securities as will be sufficient to permit the exercise in full of this Warrant and the conversion of the Shares into Common Stock or such other securities.

3.2Notice of Certain Events.  If the Company proposes at any time to:

(a)declare any dividend or distribution upon the outstanding shares of the Common Stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend;

(b)offer for subscription or sale pro rata to the holders of the outstanding shares of the Common Stock any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights);

(c)effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the Common Stock; or

(d)effect an Acquisition or to liquidate, dissolve or wind up.

then, in connection with each such event, the Company shall give Holder:

(1) in the case of the matters referred to in (a) and (b) above, at least five (5) Business Days prior written notice of the earlier to occur of the effective date thereof or the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of outstanding shares of the Common Stock will be entitled thereto) or for determining rights to vote, if any; and

(2) in the case of the matters referred to in (c) and (d) above at least five (5) Business Days prior written notice of the date when the same will take place (and specifying the date on which the holders of outstanding shares of the Common Stock will be entitled to exchange their shares for the securities or other property deliverable upon the occurrence of such event).

4

 

Reference is made to Section 1.6(c) whereby this Warrant will be deemed to be exercised pursuant to Section 1.2 hereof if the Company does not give written notice to Holder of a Cash/Public Acquisition as required by the terms hereof.  Company will also provide information requested by Holder that is reasonably necessary to enable Holder to comply with Holder’s accounting or reporting requirements.

SECTION 4.  REPRESENTATIONS, WARRANTIES OF THE HOLDER.  

The Holder represents and warrants to the Company as follows:

4.1Purchase for Own Account.  This Warrant and the securities to be acquired upon exercise of this Warrant by Holder are being acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act.  Holder also represents that it has not been formed for the specific purpose of acquiring this Warrant or the Shares.

4.2Disclosure of Information.  Holder is aware of the Company’s business affairs and financial condition and has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities.  Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access.

4.3Investment Experience.  Holder understands that the purchase of this Warrant and its underlying securities involves substantial risk.  Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons.

4.4Accredited Investor Status.  Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Act.

4.5The Act.  Holder understands that this Warrant and the Shares issuable upon exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein.  Holder understands that this Warrant and the Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available.  Holder is aware of the provisions of Rule 144 promulgated under the Act.

4.6No Rights as a Stockholder.  Without limiting any provision of this Warrant, Holder agrees that it will not have any rights as a stockholder of the Company until the exercise of this Warrant.

SECTION 5.  MISCELLANEOUS.

5.1Term; Automatic Cashless Exercise Upon Expiration.

(a)Term.  Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from time to time on or before 6:00 PM, Eastern time, on the Expiration Date and shall be void thereafter.

5

 

(b)Automatic Cashless Exercise upon Expiration.  In the event that, upon the Expiration Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above is greater than the Exercise Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Shares (or such other securities) issued upon such exercise to Holder.

5.2Legends.  Each certificate evidencing Shares (and each certificate evidencing securities issued upon conversion of any Shares, if any) shall be imprinted with a legend in substantially the following form:

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO ____________ DATED SEPTEMBER 12, 2017, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

5.3Compliance with Securities Laws on Transfer.  This Warrant and the Shares issued upon exercise of this Warrant (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part except in compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company).  The Company shall not require Holder to provide an opinion of counsel if the transfer is to an affiliate of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act.  Additionally, the Company shall also not require an opinion of counsel if there is no material question as to the availability of Rule 144 promulgated under the Act.

5.4Notices.  All notices and other communications hereunder from the Company to the Holder, or vice versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3rd) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual receipt if given by facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case at such address as may have been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions of this Section 5.4.  All notices to Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise:

 

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

 

Ballard Spahr LLP  
Attn: Mary Mullany
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
Telephone: (215) 864-8631
Facsimile: (215) 864-8999
Email: mullany@ballardspahr.com

6

 

Notice to the Company shall be addressed as follows until Holder receives notice of a change in address:

TransEnterix, Inc.
Attn: Chief Financial Officer
635 Davis Drive, Suite 300 
Morrisville, NC 27560
Telephone: (919) 765-8400
Facsimile: (919) 765-8459
Email.  jslattery@transenterix.com

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

TransEnterix, Inc.
Attn: Chief Legal Officer
635 Davis Drive, Suite 300 
Morrisville, NC 27560
Telephone: (305) 575-4602 
Facsimile: 
Email.  jweingard@transenterix.com

Ballard Spahr LLP  
Attn: Mary Mullany
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
Telephone: (215) 864-8631
Facsimile: (215) 864-8999
Email: mullany@ballardspahr.com

5.5Waiver.  This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

5.6Attorneys’ Fees.  In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.

5.7Counterparts; Facsimile/Electronic Signatures.  This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement.  Any signature page delivered electronically or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.

5.8Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to its principles regarding conflicts of law.

5.9Headings.  The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

5.10Business Days.  “Business Day” is any day that is not a Saturday, Sunday or a day on which banks are closed in North Carolina.

7

 

[Remainder of page left blank intentionally]
[Signature page follows]

8

 

IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Common Stock to be executed by their duly authorized representatives effective as of the Issue Date written above.

“COMPANY”

 

TRANSENTERIX, INC.

 

 

	
By:
	
 

	
Name:
	
Todd M. Pope

	
Title:
	
President and Chief Executive Officer

 

 

“HOLDER”

 

	
 

 

 

	
By:
	
 

	
Name:
	
 

	
Title:
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Warrant to Purchase Common Stock]

9

 

APPENDIX 1 

NOTICE OF EXERCISE

1.The undersigned Holder hereby exercises its right to purchase __________ shares of the Common Stock of TRANSENTERIX, INC. (the “Company”) in accordance with the attached Warrant To Purchase Stock, and tenders payment of the aggregate Exercise Price for such shares as follows:

	
 
	
[     ]
	
check in the amount of $________ payable to order of the Company enclosed herewith

	
 
	
[     ]
	
Wire transfer of immediately available funds to the Company’s account 

	
 
	
[     ]
	
Cashless Exercise pursuant to Section 1.2 of the Warrant

	
 
	
[     ]
	
Other [Describe] __________________________________________

	
2.
	
Please issue a certificate or certificates representing the Shares in the name specified below:

	
 
	
 

	
 
	
Holder’s Name
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
(Address)
	
 

	
3.
	
By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Section 4 of the Warrant to Purchase Common Stock as of the date hereof.

 

	
HOLDER:
	
 

	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
By:
	
 
	
 

	
Name:
	
 
	
 

	
Title:
	
 
	
 

	
(Date):
	
 
	
 

 

 

Appendix 1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00276-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00276-of-00352.parquet"}]]