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NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES

 

SHORT
TERM WARRANT

To
Purchase $________ Stated Value of Preferred Stock and Long Term
Warrants

 

DDS
Technologies USA, Inc.

 

THIS
SHORT TERM WARRANT (the “Short
Term Warrant”)
certifies that, for value received, _____________ (the “Holder”), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date hereof (the
“Initial
Exercise Date”) and on
or prior to the earlier of the close of business on the one year anniversary of
the Initial Exercise Date (the “Termination
Date”) but
not thereafter, to subscribe for and purchase, for an exercise price equal to
the Stated Value of such Preferred Stock (the “Exercise
Price”), from
DDS Technologies USA, Inc., a Nevada corporation (the “Company”), (a)
up to $_____________[amount equal to initial purchase of Preferred Stock] Stated
Value of Preferred Stock at an initial conversion price equal to $0.85 (the
“Preferred
Stock Conversion Price”)
(subject to adjustment hereunder and thereunder) (the “Preferred
Stock”) and
(b) Long Term Warrants at an exercise price of $1.00
per share
(the “Warrant
Exercise Price”)
(subject to adjustment hereunder and thereunder) (the “Warrant”). Upon
the purchase hereunder of Preferred Stock, the Holder shall receive a Warrant to
purchase a number of shares of Common Stock equal to 35% of the shares of Common
Stock issuable upon conversion of such Preferred Stock. The Preferred Stock and
Warrant shall be in the form of the Preferred Stock and Warrants (with the same
rights, privileges and preferences set forth in the Transaction Documents,
including without limitation, the Certificate of Designation and the Long Term
Warrant) issued pursuant to the Purchase Agreement, mutatis
mutandis;
provided,
however, the
Conversion Price set forth in Section 6(b) of the Certificate of Designation
shall be equal to the Preferred Stock Conversion Price and the Exercise Price
set forth in Section 2(b) of the Long Term Warrant shall be equal to the Warrant
Exercise Price. The
Preferred Stock and the Warrant shall be collectively referred to as the
“Securities.” The
Warrant Exercise Price and the Preferred Stock Conversion Price shall be
collectively referred to herein as the “Conversion
Price.”

 

1

Section
1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in that certain Securities Purchase Agreement (the “Purchase
Agreement”), dated
April 12, 2005, among the Company and the Purchasers signatory
thereto.

 

Section
2. Exercise.

 

a)  Exercise
of this Short Term Warrant.
Exercise of the purchase rights represented by this Short Term Warrant may be
made, in whole or in part, at any time or times on or after the Initial Exercise
Date and on or before the Termination Date by delivery to the Company of a duly
executed facsimile copy of the Notice of Exercise Form annexed hereto (or such
other office or agency of the Company as it may designate by notice in writing
to the registered Holder at the address of such Holder appearing on the books of
the Company) and the payment of the Stated Value thereby purchased by wire
transfer or cashier’s check drawn on a United States bank. Upon exercise of the
Short Term Warrant, the Company shall issue shares of Preferred Stock with a
Stated Value equal to the amount paid by the Holder and the Warrant to purchase
a number of shares of Common Stock equal to 35% of the shares of Common Stock
issuable upon conversion of such Preferred Stock.

 

b)  Mechanics
of Exercise.

 

i.  Authorization
of Preferred Stock and the Warrant. The
Company covenants that during the period this Short Term Warrant is outstanding,
it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of all of the shares of Common
Stock underlying the Preferred Stock and Warrant (the collectively,
“Conversion
Shares”). The
Company further covenants that its issuance of this Short Term Warrant shall
constitute full authority to its officers who are charged with the duty of
executing certificates to execute and issue the necessary certificates for the
Securities upon the exercise of the purchase rights under this Short Term
Warrant and certificates upon conversion and exercise of the Securities. The
Company covenants that the Securities which may be issued upon the exercise of
the purchase rights represented by this Short Term Warrant and the Conversion
Shares issuable thereunder will, upon exercise of the purchase rights
represented by this Short Term Warrant, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges in
respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue). The Company will take all such
reasonable action as may be necessary to assure that the Securities and
Conversion Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon
which the Common Stock may be listed.

 

ii.  Delivery
of Certificates Upon Exercise.
Certificates for the Securities purchased hereunder shall be delivered to the
Holder within 7 Trading Days from the delivery to the Company of the Notice of
Exercise Form, surrender of this Short Term Warrant and payment of the Stated
Value as set forth above (“Security
Delivery Date”). This
Short Term Warrant shall be deemed to have been exercised on the date the
payment of the Exercise Price is received by the Company. The Securities shall
be deemed to have been issued, and Holder or any other person so designated to
be named therein shall be deemed to have become a holder of record of such
security for all purposes, as of the date the Short Term Warrant has been
exercised by payment to the Company of the Exercise Price and all taxes required
to be paid by the Holder, if any, pursuant to Section 2(b)(v) prior to the
issuance of such security, have been paid. 

 

2

iii.  Delivery
of New Short Term Warrants Upon Exercise. If this
Short Term Warrant shall have been exercised in part, the Company shall, at the
time of delivery of the certificate or certificates representing the Securities,
deliver to Holder a new Short Term Warrant evidencing the rights of Holder to
purchase the unpurchased Securities called for by this Short Term Warrant, which
new Short Term Warrant shall in all other respects be identical with this Short
Term Warrant.

 

iv.  Rescission
Rights. If the
Company fails to deliver to the Holder a certificate or certificates
representing the Securities pursuant to this Section 2(b)(iv) by the Security
Delivery Date, then the Holder will have the right to rescind such exercise.

 

v.  Charges,
Taxes and Expenses.
Issuance of certificates for Securities shall be made without charge to the
Holder for any issue or transfer tax or other incidental expense in respect of
the issuance of such certificate, all of which taxes and expenses shall be paid
by the Company, and such certificates shall be issued in the name of the Holder
or in such name or names as may be directed by the Holder; provided,
however, that in
the event certificates for Securities are to be issued in a name other than the
name of the Holder, this Short Term Warrant when surrendered for exercise shall
be accompanied by the Assignment Form attached hereto duly executed by the
Holder; and the Company may require, as a condition thereto, the payment of a
sum sufficient to reimburse it for any transfer tax incidental
thereto.

 

vi.  Closing
of Books. The
Company will not close its records in any manner which prevents the timely
exercise of this Short Term Warrant, pursuant to the terms hereof or the
conversion of the Securities pursuant to the terms hereof.

 

Section
3. Certain
Adjustments.

 

a)  Stock
Dividends and Splits. If the
Company, at any time while this Short Term Warrant is outstanding: (A) pays a
stock dividend or otherwise make a distribution or distributions on shares of
its Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not include any
shares of Common Stock issued by the Company pursuant to the Securities), (B)
subdivides outstanding shares of Common Stock into a larger number of shares,
(C) combines (including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (D) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then
in each case the Conversion Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to this Section 3(a)
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution and shall
become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.

 

3

b)  Subsequent
Equity Sales. If the
Company or any Subsidiary thereof, as applicable, at any time while this Short
Term Warrant is outstanding, shall offer, sell, grant any option to purchase or
offer, sell or grant any right to reprice its securities, or otherwise dispose
of or issue (or announce any offer, sale, grant or any option to purchase or
other disposition) any Common Stock or Common Stock Equivalents entitling any
Person to acquire shares of Common Stock, at an effective price per share less
than the then Conversion Price (such lower price, the “Base
Share Price” and
such issuances collectively, a “Dilutive
Issuance”), as
adjusted hereunder (if the holder of the Common Stock or Common Stock
Equivalents so issued shall at any time, whether by operation of purchase price
adjustments, reset provisions, floating conversion, exercise or exchange prices
or otherwise, or due to warrants, options or rights per share which is issued in
connection with such issuance, be entitled to receive shares of Common Stock at
an effective price per share which is less than the Conversion Price, such
issuance shall be deemed to have occurred for less than the Conversion Price on
such date of the Dilutive Issuance), then, the Conversion Price shall be reduced
and only reduced to equal the Base Share Price and the number of shares of
Common Stock issuable upon exercise of the Warrant issuable hereunder shall be
increased such that the aggregate Warrant Exercise Price payable hereunder,
after taking into account the decrease in the Warrant Exercise Price, shall be
equal to the aggregate Warrant Exercise Price prior to such adjustment. Such
adjustment shall be made whenever such Common Stock or Common Stock Equivalents
are issued. Notwithstanding the foregoing, no adjustments shall be made, paid or
issued under this Section 3(b) in respect of an Exempt Issuance. The Company
shall notify the Holder in writing, no later than the Trading Day following the
issuance of any Common Stock or Common Stock Equivalents subject to this
section, indicating therein the applicable issuance price, or of applicable
reset price, exchange price, conversion price and other pricing terms (such
notice the “Dilutive
Issuance Notice”). For
purposes of clarification, whether or not the Company provides a Dilutive
Issuance Notice pursuant to this Section 3(b), upon the occurrence of any
Dilutive Issuance, after the date of such Dilutive Issuance the Holder is
entitled to receive a number of securities based upon the Base Share Price
regardless of whether the Holder accurately refers to the Base Share Price in
the Notice of Exercise. 

 

c)  Pro
Rata Distributions. If the
Company, at any time while this Short Term Warrant is outstanding, distributes
to all holders of Common Stock (and not to Holders) evidences of its
indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security other than the Common Stock (which
shall be subject to Section 3(b), then in each such case the Conversion Price
shall be adjusted by multiplying such Conversion Price in effect immediately
prior to the record date fixed for determination of stockholders entitled to
receive such distribution by a fraction of which the denominator shall be the
VWAP determined as of the record date mentioned above, and of which the
numerator shall be such VWAP on such record date less the then per share fair
market value at such record date of the portion of such assets or evidence of
indebtedness so distributed applicable to one outstanding share of the Common
Stock as determined by the Board of Directors in good faith. In either case the
adjustments shall be described in a statement provided to the Holder of the
portion of assets or evidences of indebtedness so distributed or such
subscription rights applicable to one share of Common Stock. Such adjustment
shall be made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above.

 

4

d)  Fundamental
Transaction. If, at
any time while this Short Term Warrant is outstanding, (A) the Company effects
any merger or consolidation of the Company with or into another Person, (B) the
Company effects any sale of all or substantially all of its assets in one or a
series of related transactions, (C) any tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of
Common Stock are permitted to tender or exchange their shares for other
securities, cash or property, or (D) the Company effects any reclassification of
the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or
property (in any such case, a “Fundamental
Transaction”), then,
upon any subsequent exercise of this Short Term Warrant the Holder shall have
the right to receive upon conversion or exercise of the Securities, as
applicable, for each Conversion Share that would have been issuable upon such
exercise and then subsequent conversion immediately prior to the occurrence of
such Fundamental Transaction, at the option of the Holder, (a) upon conversion
or exercise of the Securities, shares of Common Stock of the successor or
acquiring corporation or of the Company, if it is the surviving corporation, and
any additional consideration (the “Alternate
Consideration”)
receivable upon or as a result of such reorganization, reclassification, merger,
consolidation or disposition of assets by a Holder of the number of shares of
Common Stock for which the underlying Securities are convertible immediately
prior to such event or (b) if the Company is acquired in an all cash
transaction, cash equal to the value of this Short Term Warrant as determined in
accordance with the Black-Scholes option pricing formula. For purposes of any
such deemed conversion, the determination of the Conversion Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Conversion Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any conversion or exercise of the Securities underlying this Short
Term Warrant following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or surviving
entity in such Fundamental Transaction shall issue to the Holder a new short
term warrant consistent with the foregoing provisions and evidencing the
Holder’s right to exercise such short term warrant right ultimately into
Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this Section 3(d)
and insuring that this Short Term Warrant (or any such replacement security)
will be similarly adjusted upon any subsequent transaction analogous to a
Fundamental Transaction.

 

5

e)  Calculations. All
calculations and adjustments to the Conversion Price under this Section 3 shall
be made to the nearest cent or the nearest 1/100th of a share, as the case may
be. For purposes of this Section 3, the number of shares of Common Stock deemed
to be issued and outstanding as of a given date shall be the sum of the number
of shares of Common Stock (excluding treasury shares, if any) issued and
outstanding..

 

f)  Voluntary
Adjustment By Company. The
Company may at any time during the term of this Short Term Warrant reduce the
then current Conversion Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company.

 

g)  Notice
to Holders.

 

i.  Adjustment
to Conversion Price.
Whenever the Conversion Price is adjusted pursuant to this Section 3, the
Company shall promptly mail to each Holder a notice setting forth the Conversion
Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment. 

 

ii.  Notice
to Allow Exercise by Holder. If (A)
the Company shall declare a dividend (or any other distribution) on the Common
Stock; (B) the Company shall declare a special nonrecurring cash dividend on or
a redemption of the Common Stock; (C) the Company shall authorize the granting
to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights; (D) the
approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which
the Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, of any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property; (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company; then, in each case, the Company shall cause to be
mailed to the Holder at its last address as it shall appear upon the Short Term
Warrant Register of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided, that
the failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. The Holder is entitled to exercise this Short Term Warrant
during the 20-day period commencing on the date of such notice to the effective
date of the event triggering such notice.

 

6

Section
4. Transfer
of Short Term Warrant.

 

a)  Transferability. Subject
to compliance with any applicable securities laws and the conditions set forth
in Sections 5(a) and 4(e) hereof and to the provisions of Section 4.1 of the
Purchase Agreement, this Short Term Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of this Short Term Warrant at
the principal office of the Company, together with a written assignment of this
Short Term Warrant substantially in the form attached hereto duly executed by
the Holder or its agent or attorney and funds sufficient to pay any transfer
taxes payable upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Short Term
Warrant or Short Term Warrants in the name of the assignee or assignees and in
the denomination or denominations specified in such instrument of assignment,
and shall issue to the assignor a new Short Term Warrant evidencing the portion
of this Short Term Warrant not so assigned, and this Short Term Warrant shall
promptly be cancelled. A Short Term Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Securities without having a new
Short Term Warrant issued. 

 

b)  New
Short Term Warrants. This
Short Term Warrant may be divided or combined with other Short Term Warrants
upon presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Short Term
Warrants are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver
a new Short Term Warrant or Short Term Warrants in exchange for the Short Term
Warrant or Short Term Warrants to be divided or combined in accordance with such
notice.

 

7

c)  Short
Term Warrant Register. The
Company shall register this Short Term Warrant, upon records to be maintained by
the Company for that purpose (the “Short
Term Warrant Register”), in
the name of the record Holder hereof from time to time. The Company may deem and
treat the registered Holder of this Short Term Warrant as the absolute owner
hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary

 

d)  Transfer
Restrictions.
If, at the
time of
the surrender of this Short
Term Warrant in
connection with any transfer of this Short
Term Warrant, the
transfer of this Short
Term Warrant shall
not be registered pursuant to an effective registration
statement under the Securities Act and
under
applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer (i) that the Holder or transferee of this
Short
Term Warrant, as the
case may be, furnish to the Company a written opinion of counsel (which opinion
shall be in form, substance and scope customary for opinions of counsel in
comparable transactions) to the effect that such transfer may be made
without
registration under
the
Securities Act and under applicable state securities or blue sky laws, (ii) that
the holder or transferee execute and deliver to the Company an investment letter
in form and substance acceptable to the Company and (iii) that the transferee be
an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
promulgated under the Securities Act or a qualified institutional buyer as
defined in Rule 144A(a) under the Securities Act.

 

Section
5. Miscellaneous.

 

a)  Title
to the Short Term Warrant. Prior
to the Termination Date and subject to compliance with applicable laws and
Section 4 of this Short Term Warrant, this Short Term Warrant and all rights
hereunder are transferable, in whole or in part, at the office or agency of the
Company by the Holder in person or by duly authorized attorney, upon surrender
of this Short Term Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.

 

b)  No
Rights as Shareholder Until Exercise. This
Short Term Warrant does not entitle the Holder to any voting rights or other
rights as a shareholder of the Company prior to the exercise hereof. Upon the
surrender of this Short Term Warrant and the payment of the aggregate principal,
the Securities so purchased shall be and be deemed to be issued to such Holder
as the record owner of such shares as of the close of business on the later of
the date of such surrender or payment.

 

c)  Loss,
Theft, Destruction or Mutilation of Short Term Warrant. The
Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Short
Term Warrant or any stock certificate relating to the Securities, and in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to
it (which, in the case of the Short Term Warrant, shall not include the posting
of any bond), and upon surrender and cancellation of such Short Term Warrant or
stock certificate, if mutilated, the Company will make and deliver a new Short
Term Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Short Term Warrant or stock
certificate.

 

8

d)  Saturdays,
Sundays, Holidays, etc. If the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.

 

e)  Authorized
Shares.

 

The
Company covenants that during the period the Short Term Warrant is outstanding,
it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the shares of Common Stock
issuable upon conversion and exercise, as applicable, of the Securities. The
Company further covenants that its issuance of this Short Term Warrant shall
constitute full authority to its officers who are charged with the duty of
executing certificates to execute and issue the necessary certificates for the
Securities upon the exercise of the purchase rights under this Short Term
Warrant. The Company will take all such reasonable action as may be necessary to
assure that such Securities and Conversion Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of the Trading Market upon which the Common Stock may be listed.

 

Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Short Term Warrant or the Securities, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such actions as
may be necessary or appropriate to protect the rights of Holder as set forth in
this Short Term Warrant and the Securities against impairment. Without limiting
the generality of the foregoing, the Company will (a) take all such action as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Securities upon the exercise of this
Short Term Warrant and Conversion Shares upon conversion and exercise of the
Securities, and (b) use commercially reasonable efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Short Term Warrant and the Securities.

 

Before
taking any action which would result in an adjustment in the Securities for
which this Short Term Warrant is exercisable or in the Conversion Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

 

9

f)  Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation
of this Short Term Warrant shall be determined in accordance with the provisions
of the Purchase Agreement.

 

g)  Restrictions. The
Holder acknowledges that the Securities acquired upon the exercise of this Short
Term Warrant, if not registered, will have restrictions upon resale imposed by
state and federal securities laws.

 

h)  Nonwaiver
and Expenses. No
course of dealing or any delay or failure to exercise any right hereunder on the
part of Holder shall operate as a waiver of such right or otherwise prejudice
Holder’s rights, powers or remedies, notwithstanding the fact that all rights
hereunder terminate on the Termination Date. If the Company willfully and
knowingly fails to comply with any provision of this Short Term Warrant, which
results in any material damages to the Holder, the Company shall pay to Holder
such amounts as shall be sufficient to cover any costs and expenses including,
but not limited to, reasonable attorneys’ fees, including those of appellate
proceedings, incurred by Holder in collecting any amounts due pursuant hereto or
in otherwise enforcing any of its rights, powers or remedies
hereunder.

 

i)  Notices. Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.

 

j)  Limitation
of Liability. No
provision hereof, in the absence of any affirmative action by Holder to exercise
this Short Term Warrant or purchase Securities, and no enumeration herein of the
rights or privileges of Holder, shall give rise to any liability of Holder for
the purchase price of any Common Stock or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.

 

k)  Remedies. Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Short Term Warrant. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Short Term Warrant and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate.

 

l)  Successors
and Assigns. Subject
to applicable securities laws, this Short Term Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be binding upon
the successors of the Company and the successors and permitted assigns of
Holder. The provisions of this Short Term Warrant are intended to be for the
benefit of all Holders from time to time of this Short Term Warrant and shall be
enforceable by any such Holder or holder of Securities.

 

m)  Amendment. This
Short Term Warrant may be modified or amended or the provisions hereof waived
with the written consent of the Company and the Holder.

 

10

n)  Severability.
Wherever possible, each provision of this Short Term Warrant shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Short Term Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Short Term Warrant.

 

o)  Headings. The
headings used in this Short Term Warrant are for the convenience of reference
only and shall not, for any purpose, be deemed a part of this Short Term
Warrant.

 

********************

11

IN
WITNESS WHEREOF, the Company has caused this Short Term Warrant to be executed
by its officer thereunto duly authorized.

 

Dated:
April __, 2005

 

	
      DDS
      TECHNOLOGIES USA, INC.

       

	
      By:__________________________________________

      Name:

      Title:

12

NOTICE
OF EXERCISE

TO: DDS
TECHNOLOGIES USA, INC.

(1)  The
undersigned hereby elects to purchase $________ Stated Value of Preferred Stock
and Warrants to purchase _____ shares of Common Stock of DDS Technologies USA,
Inc. pursuant to the terms of the attached Short Term Warrant and tenders
herewith payment of the Exercise Price in full, together with all applicable
transfer taxes, if any.

 

(2)  Payment
shall take the form of lawful money of the United States; or

 

(3)  Please
issue a certificate or certificates representing said Securities in the name of
the undersigned or in such other name as is specified below:

 

_______________________________

The
Securities shall be delivered to the following:

                _______________________________

           
_______________________________

                _______________________________

(4)
Accredited
Investor. The
undersigned is an “accredited investor” as defined in Regulation D promulgated
under the Securities Act of 1933, as amended.

[SIGNATURE
OF HOLDER]

Name of
Investing Entity:
________________________________________________________________

Signature
of Authorized Signatory of Investing Entity:
________________________________________________

Name of
Authorized Signatory:
___________________________________________________________________

Title of
Authorized Signatory:
____________________________________________________________________

Date:
______________________________________________________________________________________

13

 

ASSIGNMENT
FORM

(To
assign the foregoing warrant, execute

this form
and supply required information. 

Do not
use this form to exercise the Short Term Warrant.)

FOR VALUE
RECEIVED, the foregoing Short Term Warrant and all rights evidenced thereby are
hereby assigned to

 

_______________________________________________
whose address is

_______________________________________________________________.

_______________________________________________________________

Dated:
______________, _______

Holder’s
Signature: _____________________________

Holder’s
Address: _____________________________

                          _____________________________

Signature
Guaranteed: ___________________________________________

NOTE: The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Short Term Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Short Term
Warrant.Unassociated Document

REGISTRATION
RIGHTS AGREEMENT

This
Registration Rights Agreement (this “Agreement”) is
made and entered into as of April 12, 2005, among DDS Technologies USA, Inc., a
Nevada corporation (the “Company”), and
the purchasers signatory hereto (each such purchaser is a “Purchaser” and
collectively, the “Purchasers”).

This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of the
date hereof among the Company and the Purchasers (the “Purchase
Agreement”).

The
Company and the Purchasers hereby agree as follows:

1.
Definitions

 Capitalized
terms used and not otherwise defined herein that are defined in the Purchase
Agreement shall have the meanings given such terms in the Purchase
Agreement. As used
in this Agreement, the following terms shall have the following
meanings:

“Advice” shall
have the meaning set forth in Section 6(d).

“Effectiveness
Date” means,
with respect to the initial Registration Statement required to be filed
hereunder, the 90th calendar
day following the date hereof (the 120th calendar
day in the case of a “review” by the Commission) and, with respect to any
additional Registration Statements which may be required pursuant to Section
3(c), the 90th calendar
day following the date on which the Company first knows, or reasonably should
have known, that such additional Registration Statement is required hereunder;
provided,
however, in the
event the Company is notified by the Commission that one of the above
Registration Statements will not be reviewed or is no longer subject to further
review and comments, the Effectiveness Date as to such Registration Statement
shall be the fifth Trading Day following the date on which the Company is so
notified if such date precedes the dates required above.

“Effectiveness
Period” shall
have the meaning set forth in Section 2(a).

“Event” shall
have the meaning set forth in Section 2(b).

“Event
Date” shall
have the meaning set forth in Section 2(b).

“Filing
Date” means,
with respect to the initial Registration Statement required hereunder, the
30th calendar
day following the date hereof and, with respect to any additional Registration
Statements which may be required pursuant to Section 3(c), the 30th day
following the date on which the Company first knows, or reasonably should have
known that such additional Registration Statement is required hereunder.

“Holder” or
“Holders” means
the holder or holders, as the case may be, from time to time of Registrable
Securities. 

1

“Indemnified
Party” shall
have the meaning set forth in Section 5(c).

“Indemnifying
Party” shall
have the meaning set forth in Section 5(c).

“Losses” shall
have the meaning set forth in Section 5(a).

“Plan
of Distribution” shall
have the meaning set forth in Section 2(a).

“Proceeding” means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

“Prospectus” means
the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Registration Statement, and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

“Registrable
Securities” means,
as of the date in question, (i) all of the shares of Common Stock issuable upon
conversion in full of the shares of Preferred Stock, (ii) all shares issuable as
dividends on the Preferred Stock assuming all dividend payments are made in
shares of Common Stock and the Preferred Stock is held for at least 2 years,
(iii) all Warrant Shares, (iv) any securities issued or issuable upon any stock
split, dividend or other distribution, recapitalization or similar event with
respect to the foregoing and (v) any additional shares issuable in connection
with any anti-dilution provisions associated with the Preferred Stock and
Warrants (in each case, without giving effect to any limitations on conversion
set forth in the Certificate of Designation or limitations on exercise set forth
in the Warrant). Registrable Securities shall include any Registrable Securities
issuable upon conversion of any Preferred Stock or exercise of any Long Term
Warrants which are issued upon any exercise of any Short Term Warrants, only
following the exercise of such Short Term Warrant.

“Registration
Statement” means
the registration statements required to be filed hereunder and any additional
registration statements contemplated by Section 3(c), including (in each case)
the Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement. 

“Rule
415” means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same purpose and
effect as such Rule.

2

“Rule
424” means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same purpose and
effect as such Rule.

“Selling
Shareholder Questionnaire” shall
have the meaning set forth in Section 3(a).

2.
Shelf
Registration

(a) On or
prior to each Filing Date, the Company shall prepare and file with the
Commission a “Shelf” Registration Statement covering the resale of 130% of the
Registrable Securities on such Filing Date for an offering to be made on a
continuous basis pursuant to Rule 415. The Registration Statement shall be on
Form S-3 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance herewith) and shall contain (unless
otherwise directed by the Holders) substantially the “Plan
of Distribution”
attached hereto as Annex
A. Subject
to the terms of this Agreement, the Company shall use its best efforts to cause
the Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event prior to the
applicable Effectiveness Date, and shall use its best efforts to keep such
Registration Statement continuously effective under the Securities Act until all
Registrable Securities covered by such Registration Statement have been sold or
may be sold without volume restrictions pursuant to Rule 144(k) as determined by
the counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company’s transfer agent and the affected
Holders (the “Effectiveness
Period”). The
Company shall telephonically request effectiveness of a Registration Statement
as of 5:00 pm Eastern Time on a Trading Day. The Company shall immediately
notify the Holders via facsimile of the effectiveness of the Registration
Statement on the same Trading Day that the Company telephonically confirms
effectiveness with the Commission, which shall be the date requested for
effectiveness of the Registration Statement. The Company shall, by 9:30 am
Eastern Time on the Trading Day after the Effective Date (as defined in the
Purchase Agreement), file a Form 424(b)(5) with the Commission. Failure to so
notify the Holder within 1 Trading Day of such notification shall be deemed an
Event under Section 2(b).

(b) If:
(i) a Registration Statement is not filed on or prior to its Filing Date (if the
Company files a Registration Statement without affording the Holders the
opportunity to review and comment on the same as required by Section 3(a), the
Company shall not be deemed to have satisfied this clause (i)), or (ii) the
Company fails to file with the Commission a request for acceleration in
accordance with Rule 461 promulgated under the Securities Act, within five
Trading Days of the date that the Company is notified (orally or in writing,
whichever is earlier) by the Commission that a Registration Statement will not
be “reviewed,” or not subject to further review, or (iii) prior to its
Effectiveness Date, the Company fails to file a pre-effective amendment and
otherwise respond in writing to comments made by the Commission in respect of
such Registration Statement within 10 calendar days after the receipt of
comments by or notice from the Commission that such amendment is required in
order for a Registration Statement to be declared effective, or (iv) a
Registration Statement filed or required to be filed hereunder is not declared
effective by the Commission by its Effectiveness Date, or (v) after the
Effectiveness Date, a Registration Statement ceases for any reason to remain
continuously effective as to all Registrable Securities for which it is required
to be effective, or the Holders are not permitted to utilize the Prospectus
therein to resell such Registrable Securities for 10 consecutive calendar days
but no more than an aggregate of 25 calendar days during any 12-month period
(which need not be consecutive Trading Days) (any such failure or breach being
referred to as an “Event”, and
for purposes of clause (i) or (iv) the date on which such Event occurs, or for
purposes of clause (ii) the date on which such five Trading Day period is
exceeded, or for purposes of clause (iii) the date which such 10 calendar day
period is exceeded, or for purposes of clause (v) the date on which such 10 or
25 calendar day period, as applicable, is exceeded being referred to as
“Event
Date”), then
in addition to any other rights the Holders may have hereunder or under
applicable law, on each such Event Date and on each monthly anniversary of each
such Event Date (if the applicable Event shall not have been cured by such date)
until the applicable Event is cured, the Company shall pay to each Holder an
amount in cash, as partial liquidated damages and not as a penalty, equal to
2.0% of the aggregate purchase price paid by such Holder pursuant to the
Purchase Agreement for any Registrable Securities then held by such Holder. If
the Company fails to pay any partial liquidated damages pursuant to this Section
in full within seven days after the date payable, the Company will pay interest
thereon at a rate of 18% per annum (or such lesser maximum amount that is
permitted to be paid by applicable law) to the Holder, accruing daily from the
date such partial liquidated damages are due until such amounts, plus all such
interest thereon, are paid in full. The partial liquidated damages pursuant to
the terms hereof shall apply on a daily pro-rata basis for any portion of a
month prior to the cure of an Event.

3

3.
Registration
Procedures

In
connection with the Company’s registration obligations hereunder, the Company
shall:

(a)  Not less
than five Trading Days prior to the filing of each Registration Statement or any
related Prospectus or any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by
reference), the Company shall, (i) furnish to each Holder copies of all such
documents proposed to be filed, which documents (other than those incorporated
or deemed to be incorporated by reference) will be subject to the review of such
Holders, and (ii) cause its officers and directors, counsel and independent
certified public accountants to respond to such inquiries as shall be necessary,
in the reasonable opinion of respective counsel to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities shall reasonably object in good faith, provided that, the Company is
notified of such objection in writing no later than 4 Trading Days after the
Holders have been so furnished copies of such documents. Each Holder agrees to
furnish to the Company a completed Questionnaire in the form attached to this
Agreement as Annex B (a “Selling
Shareholder Questionnaire”) not
less than two Trading Days prior to the Filing Date or by the end of the fourth
Trading Day following the date on which such Holder receives draft materials in
accordance with this Section.

 

4

(b)  (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to a Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep a Registration Statement continuously
effective as to the applicable Registrable Securities for the Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of the
Registrable Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement (subject to the terms of this
Agreement), and as so supplemented or amended to be filed pursuant to Rule 424;
(iii) respond as promptly as reasonably possible to any comments received from
the Commission with respect to a Registration Statement or any amendment thereto
and as promptly as reasonably possible provide the Holders true and complete
copies of all correspondence from and to the Commission relating to a
Registration Statement; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration Statement
during the applicable period in accordance (subject to the terms of this
Agreement) with the intended methods of disposition by the Holders thereof set
forth in such Registration Statement as so amended or in such Prospectus as so
supplemented.

 

(c)  If during
the Effectiveness Period, the number of Registrable Securities at any time
exceeds 85% of the number of shares of Common Stock then registered in a
Registration Statement, then the Company shall file as soon as reasonably
practicable but in any case prior to the applicable Filing Date, an additional
Registration Statement covering the resale by the Holders of not less than 130%
of the number of such Registrable Securities. Additionally, the Company must
file an additional Registration Statement within 30 calendar days following the
exercise of any Short Term Warrant.

(d)  Notify
the Holders of Registrable Securities to be sold (which notice shall, pursuant
to clauses (ii) through (vi) hereof, be accompanied by an instruction to suspend
the use of the Prospectus until the requisite changes have been made) as
promptly as reasonably possible (and, in the case of (i)(A) below, not less than
five Trading Days prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than one Trading Day following the day
(i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed; (B) when the
Commission notifies the Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders); and (C) with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective; (ii) of any request by the Commission or any other
Federal or state governmental authority for amendments or supplements to a
Registration Statement or Prospectus or for additional information; (iii) of the
issuance by the Commission or any other federal or state governmental authority
of any stop order suspending the effectiveness of a Registration Statement
covering any or all of the Registrable Securities or the initiation of any
Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; (v) of the occurrence of any event or passage of time that makes the
financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in a Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to a
Registration Statement, Prospectus or other documents so that, in the case of a
Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading; and
(vi) the occurrence or existence of any pending corporate development with
respect to the Company that the Company believes may be material and that, in
the determination of the Company, makes it not in the best interest of the
Company to allow continued availability of the Registration Statement or
Prospectus; provided that any and all of such information shall remain
confidential to each Holder until such information otherwise becomes public,
unless disclosure by a Holder is required by law; provided,
further,
notwithstanding each Holder’s agreement to keep such information confidential,
the Holders make no acknowledgement that any such information is material,
non-public information. 

 

5

(e)  Use its
best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of
(i) any order suspending the effectiveness of a Registration Statement, or (ii)
any suspension of the qualification (or exemption from qualification) of any of
the Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.

(f)  Furnish
to each Holder, without charge, at least one conformed copy of each such
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Person, and
all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission.

(g)  Promptly
deliver to each Holder, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request in connection with
resales by the Holder of Registrable Securities. Subject to the terms of this
Agreement, the Company hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the selling Holders in connection
with the offering and sale of the Registrable Securities covered by such
Prospectus and any amendment or supplement thereto, except after the giving on
any notice pursuant to Section 3(d).

(h)  Prior to
any resale of Registrable Securities by a Holder, use its commercially
reasonable efforts to register or qualify or cooperate with the selling Holders
in connection with the registration or qualification (or exemption from the
Registration or qualification) of such Registrable Securities for the resale by
the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep each
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by each Registration Statement; provided, that the Company
shall not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified, subject the Company to any material tax in
any such jurisdiction where it is not then so subject or file a general consent
to service of process in any such jurisdiction.

6

(i)  If NASDR
Rule 2710 requires any broker-dealer to make a filing prior to executing a sale
by a Holder, make an Issuer Filing with the NASDR, Inc. Corporate Financing
Department pursuant to NASDR Rule 2710(b)(10)(A)(i) and respond within five
Trading Days to any comments received from NASDR in connection therewith, and
pay the filing fee required in connection therewith.

(j)  If
requested by the Holders, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase Agreement,
of all restrictive legends, and to enable such Registrable Securities to be in
such denominations and registered in such names as any such Holders may
request.

(k)  Upon the
occurrence of any event contemplated by this Section 3, as promptly as
reasonably possible under the circumstances taking into account the Company’s
good faith assessment of any adverse consequences to the Company and its
stockholders of the premature disclosure of such event, prepare a supplement or
amendment, including a post-effective amendment, to a Registration Statement or
a supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither a Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If the
Company notifies the Holders in accordance with clauses (ii) through (vi) of
Section 3(d) above to suspend the use of any Prospectus until the requisite
changes to such Prospectus have been made, then the Holders shall suspend use of
such Prospectus. The Company will use its best efforts to ensure that the use of
the Prospectus may be resumed as promptly as is practicable. The Company shall
be entitled to exercise its right under this Section 3(j) to suspend the
availability of a Registration Statement and Prospectus, subject to the payment
of partial liquidated damages pursuant to Section 2(b), for a period not to
exceed 60 days (which need not be consecutive days) in any 12 month
period.

 

(l)  Comply
with all applicable rules and regulations of the Commission.

(m)  The
Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by such
Holder and, if required by the Commission, the person thereof that has voting
and dispositive control over the Shares. During any periods that the Company is
unable to meet its obligations hereunder with respect to the registration of the
Registrable Securities solely because any Holder fails to furnish such
information within three Trading Days of the Company’s request, any liquidated
damages that are accruing at such time as to such Holder only shall be tolled
and any Event that may otherwise occur solely because of such delay shall be
suspended as to such Holder only, until such information is delivered to the
Company.

7

4.
Registration
Expenses. All
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
Trading Market on which the Common Stock is then listed for trading, (B) in
compliance with applicable state securities or Blue Sky laws reasonably agreed
to by the Company in writing (including, without limitation, fees and
disbursements of counsel for the Company in connection with Blue Sky
qualifications or exemptions of the Registrable Securities and determination of
the eligibility of the Registrable Securities for investment under the laws of
such jurisdictions as requested by the Holders) and (C) if not previously paid
by the Company in connection with an Issuer Filing, with respect to any filing
that may be required to be made by any broker through which a Holder intends to
make sales of Registrable Securities with NASD Regulation, Inc. pursuant to the
NASD Rule 2710, so long as the broker is receiving no more than a customary
brokerage commission in connection with such sale, (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the holders of a majority of the
Registrable Securities included in a Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company, (v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any broker or similar commissions or, except to the extent
provided for in the Transaction Documents, any legal fees or other costs of the
Holders.

5.
Indemnification

(a)
Indemnification
by the Company. The
Company shall, notwithstanding any termination of this Agreement, indemnify and
hold harmless each Holder, the officers, directors, agents, brokers (including
brokers who offer and sell Registrable Securities as principal as a result of a
pledge or any failure to perform under a margin call of Common Stock),
investment advisors and employees of each of them, each Person who controls any
such Holder (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, agents and employees of
each such controlling Person, to the fullest extent permitted by applicable law,
from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable attorneys’ fees) and expenses
(collectively, “Losses”), as
incurred, arising out of or relating to any untrue or alleged untrue statement
of a material fact contained in a Registration Statement, any Prospectus or any
form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (i) such
untrue statements or omissions are based solely upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder’s proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in a
Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose) or (ii) in the case of an occurrence
of an event of the type specified in Section 3(d)(ii)-(vi), the use by such
Holder of an outdated or defective Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated or defective and prior to
the receipt by such Holder of the Advice contemplated in Section 6(d). The
Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding arising from or in connection with the transactions
contemplated by this Agreement of which the Company is aware.

8

(b)
Indemnification
by Holders. Each
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of
such controlling Persons, to the fullest extent permitted by applicable law,
from and against all Losses, as incurred, to the extent arising out of or based
solely upon: (x) such Holder’s failure to comply with the prospectus delivery
requirements of the Securities Act or (y) any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, any Prospectus, or
any form of prospectus, or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading (i) to the extent, but only to the extent,
that such untrue statement or omission is contained in any information so
furnished in writing by such Holder to the Company specifically for inclusion in
such Registration Statement or such Prospectus or (ii) to the extent that (1)
such untrue statements or omissions are based solely upon information regarding
such Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder’s proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in
the Registration Statement (it being understood that the Holder has approved
Annex A hereto for this purpose), such Prospectus or such form of Prospectus or
in any amendment or supplement thereto or (2) in the case of an occurrence of an
event of the type specified in Section 3(d)(ii)-(vi), the use by such Holder of
an outdated or defective Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated or defective and prior to the receipt
by such Holder of the Advice contemplated in Section 6(d). In no event shall the
liability of any selling Holder hereunder be greater in amount than the dollar
amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification
obligation.

(c)
Conduct
of Indemnification Proceedings. If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified
Party”), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying
Party”) in
writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have prejudiced the Indemnifying Party.

9

An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall reasonably believe
that a material conflict of interest is likely to exist if the same counsel were
to represent such Indemnified Party and the Indemnifying Party (in which case,
if such Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
the reasonable fees and expenses of one separate counsel shall be at the expense
of the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such
Proceeding.

Subject
to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten Trading Days of written notice thereof to the
Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is not entitled to
indemnification hereunder, determined based upon the relative faults of the
parties.

(d)
Contribution. If the
indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified
Party or insufficient to hold an Indemnified Party harmless for any Losses, then
each Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in this Agreement, any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.

10

The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, except in the case of fraud by
such Holder.

The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.

6.
Miscellaneous

(a)  Remedies. In the
event of a breach by the Company or by a Holder, of any of their obligations
under this Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under this
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and each Holder
agree that monetary damages would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

(b)  No
Piggyback on Registrations. Except
as set forth on Schedule
6(b) attached
hereto, neither the Company nor any of its security holders (other than the
Holders in such capacity pursuant hereto) may include securities of the Company
in the Registration Statement other than the Registrable Securities. The Company
shall not file any other registration statements until the initial Registration
Statement required hereunder is declared effective by the Commission, provided
that this Section 6(b) shall not prohibit the Company from filing amendments to
registration statements already filed.

11

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

(d)  Discontinued
Disposition. Each
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the kind
described in Section 3(d), such Holder will forthwith discontinue disposition of
such Registrable Securities under a Registration Statement until such Holder’s
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement, or until it is advised in writing (the “Advice”) by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company will use its best efforts to ensure that the
use of the Prospectus may be resumed as promptly as it practicable. The Company
agrees and acknowledges that any periods during which the Holder is required to
discontinue the disposition of the Registrable Securities hereunder shall be
subject to the provisions of Section 2(b).

(e)  Piggy-Back
Registrations. If at
any time during the Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the
Securities Act of any of its equity securities, other than on Form S-4 or Form
S-8 (each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with the stock option or other employee benefit plans, then the
Company shall send to each Holder a written notice of such determination and, if
within fifteen days after the date of such notice, any such Holder shall so
request in writing, the Company shall include in such registration statement all
or any part of such Registrable Securities such holder requests to be
registered; provided, that, the Company shall not be required to register any
Registrable Securities pursuant to this Section 6(e) that are eligible for
resale pursuant to Rule 144(k) promulgated under the Securities Act or that are
the subject of a then effective Registration Statement.

(f)  Amendments
and Waivers. The
provisions of this Agreement, including the provisions of this sentence, may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and each Holder of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders and that does not directly or indirectly affect the rights of
other Holders may be given by Holders of all of the Registrable Securities to
which such waiver or consent relates; provided,
however, that
the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding sentence.

(g)  Notices. Any and
all notices or other communications or deliveries required or permitted to be
provided hereunder shall be delivered as set forth in the Purchase Agreement.

12

(h)  Successors
and Assigns. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of each of the parties and shall inure to the benefit of each
Holder. The Company may not assign its rights or obligations hereunder without
the prior written consent of all of the Holders of the then-outstanding
Registrable Securities. Each Holder may assign their respective rights hereunder
in the manner and to the Persons as permitted under the Purchase
Agreement.

(i)  No
Inconsistent Agreements. Neither
the Company nor any of its subsidiaries has entered, as of the date hereof, nor
shall the Company or any of its subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities, that would
have the effect of impairing the rights granted to the Holders in this Agreement
or otherwise conflicts with the provisions hereof. Except as set forth on
Schedule
6(i), neither
the Company nor any of its subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its securities
to any Person that have not been satisfied in full.

(j)  Execution
and Counterparts. This
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.

(k)  Governing
Law. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be determined with the provisions of the Purchase
Agreement.

(l)  Cumulative
Remedies. The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.

(m)  Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

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

13

(o)  Independent
Nature of Holders’ Obligations and Rights. The
obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible in
any way for the performance of the obligations of any other Holder hereunder.
Nothing contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto, shall be
deemed to constitute the Holders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Holders
are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Holder shall be entitled to
protect and enforce its rights, including without limitation the rights arising
out of this Agreement, and it shall not be necessary for any other Holder to be
joined as an additional party in any proceeding for such purpose.

********************

 

14

IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.

  

	
      DDS
      TECHNOLOGIES USA, INC.

       

	
      By:__________________________________________

      Name:

      Title:

[SIGNATURE
PAGE OF HOLDERS FOLLOWS]

 

15

[HOLDER’S
SIGNATURE PAGE TO DDSU RRA]

Name of
Holder: __________________________

Signature
of Authorized Signatory of Holder:
__________________________

Name of
Authorized Signatory: _________________________

Title of
Authorized Signatory: __________________________

[SIGNATURE
PAGES CONTINUE]

 

16

ANNEX
A

Plan
of Distribution

 

Each
Selling Stockholder (the “Selling
Stockholders”) of the
common stock (“Common
Stock”) of DDS
Technologies USA, Inc., a Nevada corporation (the “Company”) and
any of their pledgees, assignees and successors-in-interest may, from time to
time, sell any or all of their shares of Common Stock on the Trading Market or
any other stock exchange, market or trading facility on which the shares are
traded or in private transactions. These sales may be at fixed or negotiated
prices. A Selling Stockholder may use any one or more of the following methods
when selling shares:

 

	·  	
      ordinary
      brokerage transactions and transactions in which the broker-dealer
      solicits purchasers;

 

	·  	
      block
      trades in which the broker-dealer will attempt to sell the shares as agent
      but may position and resell a portion of the block as principal to
      facilitate the transaction;

 

	·  	
      purchases
      by a broker-dealer as principal and resale by the broker-dealer for its
      account;

 

	·  	
      an
      exchange distribution in accordance with the rules of the applicable
      exchange;

 

	·  	
      privately
      negotiated transactions;

 

	·  	
      settlement
      of short sales entered into after the effective date of the registration
      statement of which this prospectus is a part;

 

	·  	
      broker-dealers
      may agree with the Selling Stockholders to sell a specified number of such
      shares at a stipulated price per share;

 

	·  	
      a
      combination of any such methods of sale;

 

	·  	
      through
      the writing or settlement of options or other hedging transactions,
      whether through an options exchange or otherwise;
or

 

	·  	
      any
      other method permitted pursuant to applicable
law.

 

The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act of 1933, as amended (the “Securities
Act”), if
available, rather than under this prospectus.

 

Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated, but,
except as set forth in a supplement to this Prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in compliance with
NASDR Rule 2440; and in the case of a principal transaction a markup or markdown
in compliance with NASDR IM-2440. 

 

17

In
connection with the sale of the Common Stock or interests therein, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the Common
Stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of the Common Stock short and deliver these
securities to close out their short positions, or loan or pledge the Common
Stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).

 

The
Selling Stockholders and any broker

 

The
Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares. The Company has agreed to indemnify
the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act. 

 

Because
Selling Stockholders may be deemed to be “underwriters” within the meaning of
the Securities Act, they will be subject to the prospectus delivery requirements
of the Securities Act. In addition, any securities covered by this prospectus
which qualify for sale pursuant to Rule 144 under the Securities Act may be sold
under Rule 144 rather than under this prospectus. Each Selling Stockholder has
advised us that they have not entered into any written or oral agreements,
understandings or arrangements with any underwriter or broker-dealer regarding
the sale of the resale shares. There is no underwriter or coordinating broker
acting in connection with the proposed sale of the resale shares by the Selling
Stockholders.

 

We agreed
to keep this prospectus effective until the earlier of (i) the date on which the
shares may be resold by the Selling Stockholders without registration and
without regard to any volume limitations by reason of Rule 144(e) under the
Securities Act or any other rule of similar effect or (ii) all of the shares
have been sold pursuant to the prospectus or Rule 144 under the Securities Act
or any other rule of similar effect. The resale shares will be sold only through
registered or licensed brokers or dealers if required under applicable state
securities laws. In addition, in certain states, the resale shares may not be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with.

 

18

Under
applicable rules and regulations under the Exchange Act, any person engaged in
the distribution of the resale shares may not simultaneously engage in market
making activities with respect to the Common Stock for a period of two business
days prior to the commencement of the distribution. In addition, the Selling
Stockholders will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including Regulation M, which may limit
the timing of purchases and sales of shares of the Common Stock by the Selling
Stockholders or any other person. We will make copies of this prospectus
available to the Selling Stockholders and have informed them of the need to
deliver a copy of this prospectus to each purchaser at or prior to the time of
the sale.

 

19

Annex
B

 

DDS
TECHNOLOGIES USA, INC.

 

Selling
Securityholder Notice and Questionnaire

 

The
undersigned beneficial owner of common stock, par value $0.0001 per share (the
“Common
Stock”), of
DDS Technologies USA, Inc., a Nevada corporation (the “Company”), (the
“Registrable
Securities”)
understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (the “Registration
Statement”) for
the registration and resale under Rule 415 of the Securities Act of 1933, as
amended (the “Securities
Act”), of
the Registrable Securities, in accordance with the terms of the Registration
Rights Agreement, dated as of April __, 2005 (the “Registration
Rights Agreement”), among
the Company and the Purchasers named therein. A copy of the Registration Rights
Agreement is available from the Company upon request at the address set forth
below. All capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Registration Rights Agreement.

 

Certain
legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Registration Statement and the related
prospectus.

 

NOTICE

 

The
undersigned beneficial owner (the “Selling
Securityholder”) of
Registrable Securities hereby elects to include the Registrable Securities owned
by it and listed below in Item 3 (unless otherwise specified under such Item 3)
in the Registration Statement.

 

 

20

The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:

 

QUESTIONNAIRE

 

1. Name.

 

	
      
	
      (a)
	
      Full
      Legal Name of Selling Securityholder

	 	 	______________________________________________________________________________________________________________ 

 

	
      
	
      (b)
	
      Full
      Legal Name of Registered Holder (if not the same as (a) above) through
      which Registrable Securities Listed in Item 3 below are
    held:

	 	 	_____________________________________________________________________________________________________________ 

 

	
      
	
      (c)
	
      Full
      Legal Name of Natural Control Person (which means a natural person who
      directly or indirectly alone or with others has power to vote or dispose
      of the securities covered by the questionnaire):

	 	 	_____________________________________________________________________________________________________________ 

 

 

2.
Address for Notices to Selling Securityholder:

 

	 
	 
	 
	
      Telephone:________________________________________________________________________________________________________________________________ 

	
      Fax:______________________________________________________________________________________________________________________________________ 

	
      Contact
      Person:_____________________________________________________________________________________________________________________________ 

3.
Beneficial Ownership of Registrable Securities:

 

	
      
	
      (a)
	
      Type
      and Number of Registrable Securities beneficially
owned:

 

	 
	 
	 
	 

 

 

21

4.
Broker-Dealer Status:

 

	
      
	
      (a)
	
      Are
      you a broker-dealer?

 

Yes r   No  o

 

	
      
	
      (b)
	
      If
      “yes” to Section 4(a), did you receive your Registrable Securities as
      compensation for investment banking services to the
    Company.

 

 

	
      
	
      Note:
	
      If
      no, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
Statement.

 

	
      
	
      (c)
	
      Are
      you an affiliate of a broker-dealer?

 

Yes r No r

 

	
      
	
      (d)
	
      If
      you are an affiliate of a broker-dealer, do you certify that you bought
      the Registrable Securities in the ordinary course of business, and at the
      time of the purchase of the Registrable Securities to be resold, you had
      no agreements or understandings, directly or indirectly, with any person
      to distribute the Registrable Securities?

 

Yes r  No r

 

	
      
	
      Note:
	
      If
      no, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
Statement.

 

5.
Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.

 

Except
as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.

 

	
      
	
      (a)
	
      Type
      and Amount of Other Securities beneficially owned by the Selling
      Securityholder:

 

	 
	 
	 

 

 

22

6.
Relationships with the Company:

 

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

 

State any
exceptions here:

 

	 
	 
	 

 

The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
at any time while the Registration Statement remains effective.

 

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

 

IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
and Questionnaire to be executed and delivered either in person or by its duly
authorized agent.

 

Dated:
_______________________                                                                                     
  Beneficial
Owner:________________________________  

                                                         
By:____________________________________________

                                                      
Name:

                                                      
Title: 

PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:

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