Exhibit 10.6
REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into as of November __, 2007 by and between HC INNOVATIONS, INC., a
Delaware corporation (the "COMPANY"), and Kenneth D. Lame Living Trust (the
"HOLDER").
BACKGROUND
The Holder has agreed to purchase from the Company, and the Company has
agreed to sell to the Holder Twelve-Month 10% Secured Convertible Notes
(collectively, the "Notes") and a Warrant to purchase shares of the Company's
Common Stock (collectively, the "WARRANTS") on the terms and conditions set
forth in Subscription Agreement, Note, and Security Agreement, each dated of
even date herewith by and between the Company and the Holder, as amended from
time to time (collectively, the "OFFERING DOCUMENTS").
The principal and interest under the Note may convert into shares of
the Company's Common Stock, $0.001 par value per share (the "Note Shares").
Further, the Holder will receive a Warrant, entitling the Holder to
purchase shares of Common Stock (each, a "WARRANT SHARE").
This Agreement grants certain registration rights to the Holders with
respect to the Note Shares and Warrants that are exercised prior to the
expiration thereof, upon the terms and subject to the conditions as hereinafter
set forth.
The parties agree as follows:
1. CERTAIN DEFINITIONS. As used herein, the following terms shall
have the following respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
"MATURITY DATE" shall mean the date that is twelve months from the date
of issuance of the Note.
"REGISTRABLE SECURITIES" shall mean: (i) the Common Stock issued or
issuable to each Holder or its permitted transferee or designee (a) upon
conversion of the Notes or exercise of the Warrants; provided that all such
shares shall cease to be Registrable Securities at such time as they have been
sold under a Registration Statement or pursuant to Rule 144 under the Securities
Act or otherwise or at such time as they are eligible to be sold pursuant to
Rule 144(k). The rights to cause the Company to register Registrable Securities
pursuant to this Agreement only may be assigned by a Holder to a permitted
transferee or assignee of the securities held by such Holder, as may be
restricted by other agreements between the Company and the Holder.
"RESTRICTED STOCK" shall mean the Note Shares and/or the Warrant Shares
the certificates for which are required to bear the legend set forth in Section
2 hereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
2. RESTRICTIVE LEGEND. The Note Shares and the Warrant Shares and
each certificate representing such Restricted Stock and, except as otherwise
provided in Section 3 hereof, each certificate issued upon exchange or transfer
of any such securities shall be stamped or otherwise imprinted with a legend
substantially in the following form:
"THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR THE
COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE COMPANY THAT AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS
AVAILABLE."
3. NOTICE OF PROPOSED TRANSFER. Prior to any proposed transfer of
any Restricted Stock (other than under the circumstances described in Section 4
hereof), the Holder shall give written notice to the Company of its intention to
effect such transfer. Each such notice shall describe the manner of the proposed
transfer and, if requested by the Company, shall be accompanied by an opinion of
counsel satisfactory to the Company to the effect that the proposed transfer may
be effected without registration under the Securities Act, whereupon such Holder
shall be entitled to transfer such securities in accordance with the terms of
its notice. All Restricted Stock transferred as above provided shall bear the
legend set forth in Section 2, except that such securities shall not bear such
legend if (i) such transfer is in accordance with the provisions of Rule 144 (or
any other rule permitting public sale without registration under the Securities
Act) or (ii) the opinion of counsel referred to above is to the further effect
that the transferee and any subsequent transferee (other than an affiliate of
the Company) would be entitled to transfer such securities in a public sale
without registration under the Securities Act.
4. REGISTRATION REQUIREMENTS. (a) The Company shall use its best
efforts to effect the registration of the Registrable Securities (including,
without limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act) as would permit or facilitate the sale or distribution
of all the Registrable Securities in the manner (including manner of sale) and
in all states reasonably requested by the Holder. Such best efforts by the
Company shall include, without limitation, the following:
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(i) The Company shall prior to the Maturity Date (the "REQUIRED
FILING DATE") prepare and file a registration statement with the Commission
pursuant to Rule 415 under the Securities Act ("RULE 415") on Form SB-2 or Form
S-3 under the Securities Act (or in the event that the Company is ineligible to
use such form, such other form as the Company is eligible to use under the
Securities Act provided that any other form shall be converted into an S-3 as
soon as Form S-3 becomes available to the Company) covering resales by the
Holders as selling stockholders (not underwriters) of the Registrable Securities
(a "REGISTRATION STATEMENT"), which Registration Statement, to the extent
allowable under the Securities Act and the rules promulgated thereunder
(including Rule 416), shall state that such Registration Statement also covers
such indeterminate number of additional shares of Common Stock as may become
issuable upon conversion of the Bridge Notes and exercise of the Warrants
pursuant to the issuance of Common Stock to pay interest on the Bridge Notes or
pursuant to the applicable anti-dilution provisions. The number of shares of
Common Stock initially included in such Registration Statement shall be no less
than 100% of the maximum number of shares of Common Stock which may be included
in a Registration Statement without exceeding registration limitations imposed
by the SEC pursuant to Rule 415 (the "RULE 415 AMOUNT") in a comment letter
addressed to the Company; PROVIDED that the Company shall use its commercially
reasonable efforts to contest such limitation, but in any event not less than
approximately 6,970,664 shares of Common Stock. Thereafter, the Company shall
use its best efforts to cause such Registration Statement and other filings to
be declared effective, as soon as possible, and in any event no later than the
180th day following the Maturity Date (or not later than the 210th day following
the Closing Date if the SEC reviews such Registration Statement) or such later
date specified in the last sentence of this Section 4(a)(i) for the
effectiveness of a registration statement (the "REQUIRED EFFECTIVE DATE"). In
the event that less than all of the Registrable Securities are included in a
Registration Statement as a result of the limitations described in this
paragraph, then the Company will (i) reduce on a proportionate basis the number
of Registrable Securities of each Holder included in such Registration Statement
and (ii) file additional Registration Statements, each registering the Rule 415
Amount, SERIATIM, until all of the Registrable Securities have been registered.
The Required Filing Date and the Required Effective Date of each such additional
Registration Statement shall be thirty (30) days and ninety (90) days,
respectively, after the first day such Registration Statement may be filed
without objection by the SEC based on Rule 415. Without limiting the foregoing,
the Company will promptly respond to all SEC comments, inquiries and requests,
and shall request acceleration of effectiveness at the earliest possible date.
Notwithstanding the foregoing, if a closing with respect to a Qualified
Financing (as defined in the Subscription Agreement) occurs prior to the
Maturity Date, then the Holder may elect in lieu of filing any Registration
Statement required by this Agreement to include the Registrable Securities in
the registration statements to be filed pursuant to the registration rights
granted to the purchasers in the Qualified Financing on a PARI PASSU basis;
provided that such registration rights (i) require the filing of an initial
registration registering at least the Rule 415 Amount within 90 days of the
closing of such Qualified Financing, (ii) require the Company use its best
efforts to have such initial registration statement declared effective within 90
days of the filing of such registration statement, and (iii) require the filing
and effectiveness of subsequent registration statements to occur within 30 days
and 90 days, respectively, of the first day such registration statement may be
filed without objection by the SEC based on Rule 415.
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(b) PIGGYBACK REGISTRATION. Holder's rights under this Agreement
commence upon the Company closing on the Holder's investment as described in the
Offering Documents and terminates on the fifth (5th) anniversary of this
Agreement, unless earlier terminated pursuant to Section 9(a) hereof (the
"PIGGYBACK REGISTRATION PERIOD"). If the Company at any time during the
Piggyback Registration Period proposes to register any of its securities under
the Securities Act for sale to the public, whether for its own account or for
the account of other security holders or both (other than a Registration
Statement associated with the merger of the Company with a public company or
similar transaction or in connection a Registration Statement for an initial
public offering of the Company's Common Stock or a registration on Form S-3,
Form-S-4, Form S-8 or other limited purpose form), then in each instance, it
will give written notice to all Holders of Restricted Stock of its intention to
file a Registration Statement, PROVIDED, HOWEVER, that for the purposes of this
sentence, the Company shall treat the Holders in the same manner and IN PARI
PASSU with all other holders of unregistered capital stock of the Company who
(i) have registration rights with respect to such stock or (ii) presently or at
any time hereafter are officers, directors, or 5% shareholders of the Company,
or any affiliate, successor, or assign thereof. Upon the written request of any
such Holders, given within 20 days after the date of any such notice, to
register any of its Restricted Stock (which request shall state the intended
method of disposition thereof), the Company will use its best efforts to cause
the Restricted Stock as to which registration shall have been so requested to be
included in the securities to be covered by the Registration Statement proposed
to be filed by the Company all to the extent requisite to permit the sale or
other disposition by the Holders (in accordance with their written request) of
such Restricted Stock so registered. The Company may withdraw any such
Registration Statement before it becomes effective or postpone the offering of
securities contemplated by such Registration Statement without any obligation to
the Holders of any Restricted Stock.
In the event that any registration pursuant to this Section 4 shall be,
in whole or in part, an underwritten public offering of Common Stock, any
request by Holders pursuant to this Section 4 to register Restricted Stock shall
specify that such Restricted Stock is to be included in the underwriting on the
same terms and conditions as the shares of Common Stock otherwise being sold
through underwriters under such registration. The number of shares of Restricted
Stock to be included in such an underwriting may be cut back (PRO RATA among the
requesting common stock holders requesting inclusion) if and to the extent that
the managing underwriter shall be of the opinion that such inclusion would
adversely affect the marketing of the securities to be sold by the Company
therein.
Notwithstanding anything to the contrary contained in this Section 4,
in the event that there is an underwritten offering of securities of the Company
pursuant to a registration covering Restricted Stock and a selling Holder owning
more than five percent (5%) of Restricted Stock does not elect to sell his, her,
or its Restricted Stock to the underwriters of the Company's securities in
connection with such offering, such Holder shall refrain from selling such
Restricted Stock not registered pursuant to this Section 4 during the period of
distribution of the Company's securities by such underwriters and the period in
which the underwriting syndicate participates in the after market; PROVIDED,
HOWEVER, that such Holder may sell his Restricted Stock with consent from any
such underwriter; FURTHER, PROVIDED, HOWEVER, that such Holder shall, in any
event, be
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entitled to sell its Restricted Stock in connection with such registration
commencing on the 180th day after the effective date of such Registration
Statement.
5. REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of Section 4 hereof to use its best efforts to effect
the registration of any shares of Restricted Stock under the Securities Act, the
Company will, as expeditiously as possible:
(a) prepare and file with the Commission a Registration Statement
(which, in the case of an underwritten public offering pursuant to Section 4
hereof, shall be on Form S-1, Form SB-2, or other form of general applicability
satisfactory to the managing underwriter selected as therein provided) with
respect to such securities and use its best efforts to cause such Registration
Statement to become and remain effective for the period of the distribution
contemplated thereby (determined as hereinafter provided);
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective for
the period specified in Section 5 (a) above and as to comply with the provisions
of the Securities Act with respect to the disposition of all Restricted Stock
covered by such Registration Statement in accordance with the sellers' intended
method of disposition set forth in such Registration Statement for such period;
(c) furnish to each seller and to each underwriter such number of
copies of the Registration Statement and the prospectus included therein
(including each preliminary prospectus) as such persons may reasonably request
in order to facilitate the public sale or other disposition of the Restricted
Stock covered by such Registration Statement;
(d) use its best efforts to register or qualify the Restricted
Stock covered by such Registration Statement under the securities or blue sky
laws of such jurisdictions as the sellers of Restricted Stock or, in the case of
an underwritten public offering, the managing underwriter shall reasonably
request;
(e) immediately notify each seller under such Registration
Statement and each underwriter, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus contained in such Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein not misleading in
the light of the circumstances then existing;
(f) use its best efforts to furnish, at the request of any seller,
on the date that Restricted Stock is delivered to the underwriters for sale
pursuant to such registration: (i) an opinion dated such date of counsel
representing the Company for the purposes of such registration, addressed to the
underwriters in a form and substance as is customarily given to underwriters in
an underwritten public offering, and (ii) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters in a
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form and substance as is customarily given by independent public accountants to
underwriters in an underwritten public offering; and
(g) make available for inspection by any underwriter participating
in any distribution pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by such underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all information
reasonably requested by any such underwriter, attorney, accountant, or agent in
connection with such Registration Statement.
For purposes of Sections 5 (a) and (b) above, the period of
distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Restricted Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Restricted Stock covered thereby or nine months
after the effective date thereof.
In connection with each registration hereunder, the selling Holders of
Restricted Stock will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as shall be
necessary in order to assure compliance with Federal and applicable state
securities laws or as the Company may reasonably request.
In connection with each registration pursuant to Section 4 hereof
covering an underwritten public offering, the Company agrees to enter into a
written agreement with the managing underwriter selected in the manner herein,
in such form and containing such provisions as are customary in the securities
business for such an arrangement.
6. EXPENSES. All expenses incurred by the Company in complying
with Section 4 hereof, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees of the National Association
of Securities Dealers, Inc., fees of transfer agents and registrars, but
excluding any Selling Expenses, are herein called "REGISTRATION EXPENSES". All
underwriting discounts and selling commissions and transfer taxes applicable to
the sale of Restricted Stock are herein called "SELLING EXPENSES".
The Company will pay all Registration Expenses in connection with each
Registration Statement filed pursuant to Section 4 hereof. All Selling Expenses
incurred in connection with any sale of Restricted Stock by any participating
seller shall be borne by such participating seller or by such persons other than
the Company (except to the extent the Company shall be a seller) as they may
agree.
7. INDEMNIFICATION. In the event of a registration of any of the
Restricted Stock under the Securities Act pursuant to Section 4 hereof, the
Company will indemnify and hold harmless each seller of such Restricted Stock
thereunder and each underwriter of such Restricted Stock thereunder and each
other person, if any, who controls such seller or underwriter within
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the meaning of the Securities Act, against any and all losses, claims, damages,
expenses, or liabilities, joint or several, to which such seller or underwriter
or controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereto arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement under
which such Restricted Stock was registered under the Securities Act pursuant to
Section 4, any preliminary prospectus or final prospectus contained therein, or
any amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each such seller, each such underwriter and each such controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability,
expense, or action; PROVIDED, HOWEVER, that the Company will not be liable in
any such case if and to the extent that any such loss, claim, damage, or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished by such seller, such underwriter or such controlling person in writing
specifically for use in such Registration Statement or prospectus.
In the event of a registration of any of the Restricted Stock under the
Securities Act pursuant to Section 4 hereof, each seller of such Restricted
Stock thereunder, severally and not jointly, will indemnify and hold harmless
the Company and each person, if any, who controls the Company within the meaning
of the Securities Act, each officer of the Company who signs the Registration
Statement, each director of the Company, each underwriter and each person who
controls any underwriter within the meaning of the Securities Act, against all
losses, claims, damages, expenses, or liabilities, joint or several, to which
the Company or such officer or director or underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages, expenses, or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement under which such
Restricted Stock was registered under the Securities Act pursuant to Section 4,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company and each such officer, director, underwriter, and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability, or action, and PROVIDED, HOWEVER, that such seller will be liable
hereunder in any such case if and only to the extent that any such loss, claim,
damage, or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as such, furnished
in writing to the Company by such seller specifically for use in such
Registration Statement or prospectus; PROVIDED, FURTHER, HOWEVER, that the
liability of each seller hereunder shall be limited to the proportion of any
such loss, claim, damage, liability, or expense which is equal to the proportion
that the public offering price of the shares sold by such seller under such
Registration Statement bears to the total public offering price of
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all securities sold thereunder, but not to exceed the proceeds received by such
seller from the sale of Restricted Stock covered by such Registration Statement.
Promptly after receipt by an indemnified party hereunder of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party under this Section 7. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying party
of the announcement thereof, the indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel reasonably satisfactory to such indemnified party,
and, after notice from the indemnifying party to such indemnified party of its
election to assume and undertake the defense thereof, the indemnifying party
shall not be liable to such indemnified party under this Section 7 for any legal
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation and of liaison with
counsel so selected; PROVIDED, HOWEVER, that, if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, the indemnified party shall have the right to select a separate counsel
and to assume such legal defenses and otherwise to participate in the defense of
such action, with the expenses and fees of such separate counsel and other
expenses related to such participation to be reimbursed by the indemnifying
party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the
right to retain its own counsel in any such action, but the fees and
disbursements of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party shall have failed to retain counsel for the
indemnified person as aforesaid or (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of such counsel.
It is understood that the indemnifying party shall not, in connection with any
action or related actions in the same jurisdiction, be liable for the fees and
disbursements of more than one separate firm qualified in such jurisdiction to
act as counsel for the indemnified party. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
If the indemnification provided for in the first two paragraphs of this Section
7 is unavailable to or insufficient to hold harmless an indemnified party under
such paragraphs in respect of any losses, claims, damages or liabilities or
actions in respect thereof referred to therein, then each indemnifying party
shall in lieu of indemnifying such indemnified party contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or actions in such proportion as appropriate to reflect the
relative fault of the Company, on the one hand, and the sellers of such
Restricted Stock, on the other, in connection with the statement or omissions
which resulted in such losses, claims, damages, liabilities, or actions, as well
as any other relevant equitable considerations including
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the failure to give any notice under the third paragraph of this Section 7. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, on the one hand, or by the sellers of such Restricted Stock, on the
other, and to the parties' relative intent, knowledge, access to information,
and opportunity to correct or prevent such statement or omission.
The Company and the sellers of Restricted Stock agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by PRO RATA allocation (even if all of the sellers of Restricted Stock were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities, or action in
respect thereof, referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this and the immediately preceding paragraph, the sellers of such
Restricted Stock shall not be required to contribute any amount in excess of the
amount, if any, by which the total price at which the Restricted Stock sold by
each of them was offered to the public exceeds the amount of any damages which
they would have otherwise been required to pay by reason of such untrue or
alleged untrue statement of omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation. The indemnification of underwriters provided for
in this Section 7 shall be on such other terms and conditions as are at the time
customary and reasonably required by such underwriters.
8. RULE 144 REPORTING. From and after the date hereof, the
Company agrees with the Holders of Restricted Stock as follows:
(a) The Company shall file with the Commission in a timely manner
all reports and other documents as the Commission may prescribe under Section
13(a) or 15(d) of the Securities Exchange Ac of 1934, as amended (the "EXCHANGE
ACT").
(b) The Company shall furnish to such Holder of Restricted Stock
forthwith upon request (i) a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 (at any time from and
after 90 days following the effective date of the first Registration Statement
of the Company for an offering of its Common Stock to the general public), and
of the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), (ii) a copy of the most recent annual
or quarterly report of the Company and (iii) such other reports and documents so
filed as a Holder may reasonably request to avail itself of any rule or
regulation of the Commission allowing a Holder of Restricted Stock to sell any
such securities without registration.
9. MISCELLANEOUS.
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(a) The rights arising under Section 4 shall terminate on the
fifth (5th) anniversary of this Agreement, or if earlier, when (i) the Holder of
the Restricted Stock is no longer an "affiliate" as used in Rule 144 and (ii)
the Holder of the Restricted Stock is permitted to sell all Restricted Stock
then held by it pursuant to Rule 144(k). Section 7 shall survive the execution
and delivery of this Agreement, the termination of the registration rights
granted herein and the last registration of the Registrable Securities
(b) All covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so expressed
or not. Without limiting the generality of the foregoing, the registration
rights conferred herein on the Holders of Restricted Stock shall inure to the
benefit of any and all subsequent permitted holders from time to time of the
Restricted Stock for so long as the certificates representing the Restricted
Stock shall be required to bear the legend specified in Section 2 hereof.
(c) NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing, with copies to all the other
parties hereto, and shall be deemed to have been duly given when (i) if
delivered by hand, upon receipt, (ii) if sent by facsimile, upon receipt of
proof of sending thereof, (iii) if sent by nationally recognized overnight
delivery service (receipt requested), the next business day or (iv) if mailed by
first-class registered or certified mail, return receipt requested, postage
prepaid, four days after posting in the U.S. mails, in each case if delivered to
the following addresses:
If to the Company: HC Innovations, Inc.
10 Progress Drive, Suite 200
Shelton, CT 06484
Attention: David Chess, MD, CEO
Telephone: (203) 925-9600
With a copy to: Gersten Savage, LLP
600 Lexington Avenue
New York, New York 10022
Attention: Jay M. Kaplowitz, Esq.
Telephone: (212) 752-9700
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If to the Holder:
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(d) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
(e) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT
ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH
COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE
AND ANY CLAIM THAT THE SUCH COURTS ARE AN INCONVENIENT FORUM. EACH PARTY HEREBY
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF
BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN
SECTION 9(C), SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING.
(f) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and may not be modified or amended
except in writing by both parties.
(g) This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date and year first written above.
THE COMPANY:
HC Innovations, Inc.
By:
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Name:
Title:
HOLDER:
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By:
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Name:
Title:
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