REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of May 5, 1998
(this "Agreement"), is made by and among AMERICAN ELECTROMEDICS
CORP., a Delaware corporation, with headquarters located at 13
Columbia Drive, Suite 18, Amherst, New Hampshire 03031 (the
"Company"), the purchasers listed on Exhibit A attached hereto
(each, a "Purchaser," and collectively, the "Purchasers") and
West End Capital LLC ("West End").
W I T N E S S E T H:
WHEREAS, pursuant to a Securities Purchase Agreement, dated
as of May 5, 1998, among the Purchasers and the Company (the
"Securities Purchase Agreement"), the Company has agreed to issue
and sell to the Purchasers, shares of 5% convertible preferred
stock, par value $0.01 per share (the "Series A Preferred
Stock"), and has agreed to issue 50,000 three-year warrants (the
"Warrants") to West End (which for the purposes of the rights
conveyed to holders of Warrants pursuant to this Agreement shall
be deemed to be a Purchaser);
WHEREAS, pursuant to the terms of the Series A Preferred
Stock and the Warrants, (i) upon the conversion of the Series A
Preferred Stock and (ii) upon exercise of the Warrants, the
Company will issue to the Purchasers shares of common stock, par
value $.10 per share (such shares are referred to herein as the
"Shares"); and
WHEREAS, to induce the Purchasers to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as
amended (the "Securities Act"), and applicable state securities
laws.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and each of the Purchasers hereby
agrees as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms
shall have the following meanings:
(i) "Purchaser" means the Purchasers identified on
Exhibit A hereto, or any transferee or assignee who agrees to
become bound by the provisions of this Agreement in accordance
with Section 9 hereof.
(ii) "Register," "Registered," and "Registration" refer
to a registration effected by preparing and filing a Registration
Statement or Statements in compliance with the Securities Act and
pursuant to Rule 415 under the Securities Act or any successor
rule providing for offering securities on a continuous basis
("Rule 415"), and the declaration or ordering of effectiveness of
such Registration Statement by the United States Securities and
Exchange Commission (the "Commission").
(iii) "Registrable Securities" means the Shares.
(iv) "Registration Statement" means a registration
statement of the Company under the Securities Act.
Capitalized terms used herein and not otherwise defined
herein shall have the meanings set forth in the Securities
Purchase Agreement.
2. REGISTRATION.
(a) MANDATORY REGISTRATION. Within thirty (30) days
of the Initial Closing Date, the Company shall file with the
Commission a Registration Statement on Form SB-2 covering (a)
resales of the Warrants and (b) at least one and one-half (1.5)
times the sum of: (i) the number of Shares that are issuable upon
conversion of the Series A Preferred Stock on the date of filing,
without regard to any limitation on any holder's ability to
convert the Series A Preferred Stock, and (ii) 50,000 Shares
issuable upon exercise of the Warrants, or an amendment to any
pending Registration Statement on Form SB-2 of the Company, and
such Registration Statement or amended Registration Statement, as
the case may be, shall state that, in accordance with Rule 416
under the Securities Act, it also covers such indeterminate
number of additional Shares as may become issuable upon
conversion of the Series A Preferred Stock or the Warrants
resulting from any adjustment in the applicable Conversion Price
of the Series A Preferred Stock or the Exercise Price of the
Warrants, as the case may be, or to prevent dilution resulting
from stock splits or stock dividends. If at any time one and
one-half (1.5) times the number of Shares into which the Series A
Preferred Stock may be converted exceeds the difference between
the total number of Shares registered and 50,000 (as adjusted in
accordance with the terms of the Warrants), the Company shall,
within ten (10) business days after receipt of a written notice
from any Purchaser, either (i) amend the Registration Statement
filed by the Company pursuant to the preceding sentence, if such
Registration Statement has not been declared effective by the
Commission at that time, to register all Ordinary Shares into
which the Series A Preferred Stock may be converted, or (ii) if
such Registration Statement has been declared effective by the
Commission at that time, file with the Commission an additional
Registration Statement on Form SB-2 to register the number of
Shares into which the Series A Preferred Stock may be converted
that exceed the number of Shares already registered. The Company
shall use its best efforts to cause such Registration Statement
or amended Registration Statement, as the case may be, to become
effective within ninety (90) days following the Initial Closing
Date (or, if the Commission elects to conduct a review of such
Registration Statement, one hundred twenty (120) days following
the Initial Closing Date). The failure of the Company to cause
such Registration Statement to become effective during such
respective time periods shall have the effect set forth in the
Certificate of Designation relating to the Series A Preferred
Stock. The Company shall keep the Registration Statement
effective pursuant to Rule 415 at all times until such date as is
the earlier of (i) the date on which all of the Registrable
Securities have been sold and (ii) the date on which the
Registrable Securities (in the opinion of counsel to the
Purchasers) may be immediately sold without restriction
(including without limitation as to volume by each holder
thereof) without registration under the Securities Act (the
"Registration Period").
(b) PIGGYBACK REGISTRATION. (i) If at any time or
from time to time, the Company shall determine to register any of
its securities, for its own account or the account of any of its
shareholders, other than a Registration relating solely to
employee share option plans or pursuant to an acquisition
transaction on Form S-4, the Company will:
(A) provide to the Purchasers written notice
thereof as soon as practicable prior to filing the Registration
Statement; and
(B) include in such Registration and in any
underwriting involved therein, all of the Registrable Securities
specified in a written request by the Purchasers made within
fifteen (15) days after receipt of such written notice from the
Company.
(ii) If the Registration is for a registered public
offering involving an underwriting, the Company shall so advise
the Purchasers as a part of the written notice given pursuant to
this Section. In such event, the rights of the Purchasers
hereunder shall include participation in such underwriting and
the inclusion of the Registrable Securities in the underwriting
to the extent provided herein. To the extent that a Purchaser
proposes to distribute its securities through such underwriting,
such Purchaser shall (together with the Company and any other
securityholders of the Company distributing their securities
through such underwriting) enter into an underwriting agreement
in customary form with the underwriter or underwriters selected
for such underwriting by the Company. Notwithstanding any other
provision of this Section, if the managing underwriter of such
underwriting determines that marketing factors require a
limitation of the number of shares to be offered in connection
with such underwriting, the managing underwriter may limit the
number of Registrable Securities to be included in the
Registration and underwriting. If any Purchaser disapproves of
the terms of any such underwriting, it may elect to withdraw
therefrom by written notice to the Company. Any Registrable
Securities so excluded or withdrawn from such underwriting shall
be withdrawn from such Registration.
(c) ELIGIBILITY FOR FORM SB-2. The Company represents
and warrants that it meets all of the requirements for the use of
Form SB-2 for the Registration of the sale by the Purchaser and
any transferee who purchases the Registrable Securities, and the
Company shall file all reports required to be filed by the
Company with the Commission in a timely manner, and shall take
such other actions as may be necessary to maintain such
eligibility for the use of Form SB-2.
(d) PRIORITY IN FILING. The Company covenants that
beginning on the Closing Date and until such time as a
Registration Statement pursuant to Section 2(a) of this agreement
has been filed and become effective, the Company will not file
any other registration statement without the written consent of
the Purchasers or their representative.
3. OBLIGATIONS OF THE COMPANY. In connection with the
registration of the Registrable Securities, the Company shall do
each of the following:
(a) Prepare and file with the Commission such
amendments (including post-effective amendments) and supplements
to the Registration Statement and the prospectuses used in
connection with the Registration Statement as may be necessary to
keep the Registration effective at all times during the
Registration Period, and, during the Registration Period, comply
with the provisions of the Securities Act with respect to the
disposition of all of the Warrants and all of the Registrable
Securities of the Company covered by the Registration Statement
until such time as all of the Warrants and such Registrable
Securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof as set
forth in the Registration Statement;
(b) Furnish to Purchaser whose Registrable Securities
are included in the Registration Statement, and its legal counsel
identified to the Company, promptly after the same is prepared
and publicly distributed, filed with the Commission, or received
by the Company, a copy of the Registration Statement, each
preliminary prospectus, each final prospectus, and all amendments
and supplements thereto and such other documents, as such
Purchaser may reasonably request in order to facilitate the
disposition of the Warrants and its Registrable Securities;
(c) Use reasonable efforts to (i) register and qualify
the Warrants and the Registrable Securities covered by the
Registration Statement under such other securities or blue sky
laws of such jurisdictions as the Purchasers who hold a majority
in interest of the Registrable Securities being offered may
reasonably request, (ii) prepare and file in those jurisdictions
such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof at all times
during the Registration Period, (iii) take such other actions as
may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration
Period and (iv) take all other actions reasonably necessary or
advisable to qualify the Warrants and the Registrable Securities
for sale in such jurisdictions, provided that in connection
therewith, the Company shall not be required to qualify as a
foreign corporation or to file a general consent to the service
of process in any jurisdiction.
(d) As promptly as practicable after becoming aware of
such event, notify each Purchaser of the occurrence of any event
of which the Company has knowledge, as a result of which the
prospectus included in the Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein in order
to make the statements therein, in light of the circumstances
under which they were made, not misleading, and to use its best
efforts to promptly prepare a supplement or amendment to the
Registration Statement or other appropriate filing with the
Commission to correct such untrue statement of omission, and to
deliver a number of copies of such supplement or amendment to
each Purchaser as such Purchaser may reasonably request;
(e) As promptly as practicable after becoming aware of
such event, notify each Purchaser who holds Warrants or
Registrable Securities being sold (or, in the event of an
underwritten offering, the managing underwriters) of the issuance
by the Commission or any stop order or other suspension of the
effectiveness of the Registration Statement at the earliest
possible time, and to use its best efforts to promptly obtain the
withdrawal of such stop order or other suspension of
effectiveness;
(f) If the offering is underwritten, at the request of
a Purchaser, to furnish on the date that Registrable Securities
are 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 and to any Purchaser selling
Registrable Securities in connection with such underwriting,
stating that such registration statement has become effective
under the Securities Act and that (A) to the best knowledge of
such counsel, no stop order suspending the effectiveness thereof
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities
Act and (B) the registration statement, the related prospectus
and each amendment or supplement thereof comply as to form in all
material respects with the requirements of the Securities Act
(except that such counsel need not express any opinion as to
financial statements or other financial data contained therein)
and (ii) a letter dated such date from the Company's independent
public accountants addressed to the underwriters and to such
Purchasers, stating that they are independent public accountants
within the meaning of the Securities Act and that, in the opinion
of such accountants, the financial statements of the Company
included in the registration statement or the prospectus, or any
amendment or supplement thereof, comply as to form in all
material respects with the applicable accounting requirements of
the Securities Act, and such letter shall additionally cover such
other financial matters (including information as to the period
ending no more than five (5) business days prior to the date of
such letter) with respect to such registration as such
underwriters may reasonably request.
(g) Cooperate with the Purchasers who hold Registrable
Securities being offered to facilitate the timely preparation and
delivery of certificates for the Registrable Securities to be
offered pursuant to the Registration Statement and to enable such
certificates for the Registrable Securities to be in such
denominations or amounts, as the case may be, as the Purchasers
may reasonably request, and registered in such names as the
Purchasers may request; and, within three (3) business days after
a Registration Statement which includes Registrable Securities is
ordered effective by the Commission, the Company shall deliver,
and shall cause legal counsel selected by the Company to deliver,
to the transfer agent for the Registrable Securities (with copies
to the Purchasers whose Registrable Securities are included in
such Registration Statement) an appropriate instruction and
opinion of such counsel; and
4. OBLIGATIONS OF THE PURCHASERS. In connection with the
registration of the Registrable Securities, the Purchasers shall
have the following obligations:
(a) Take all other reasonable actions necessary to
expedite and facilitate the disposition by the Purchasers of the
Warrants and the Registrable Securities pursuant to the
Registration Statement.
(b) It shall be a condition precedent to the
obligations of the Company to complete the registration pursuant
to this Agreement of the Warrants and the Registrable Securities
of each Purchaser that such Purchaser shall furnish to the
Company such information regarding itself, the Warrants and the
Registrable Securities held by it, and the intended method of
disposition of the Registrable Securities held by it, as shall be
reasonably required to effect the registration of such Warrants
and such Registrable Securities, and such Purchaser shall execute
such documents in connection with such registration as the
Company may reasonably request. At least five (5) days prior to
the first anticipated filing date of the Registration Statement,
the Company shall notify such Purchaser of the information the
Company requires from such Purchaser (the "Requested
Information") if such Purchaser elects to have any of its
Warrants and its Registrable Securities included in the
Registration Statement. If, at least two (2) business days prior
to the filing date, the Company has not received the Requested
Information from a Purchaser, then the Company may file the
Registration Statement without including the Warrants and the
Registrable Securities of such Purchaser;
(c) The Purchaser, by such Purchaser's acceptance of
the Warrants or the Registrable Securities, agrees to cooperate
with the Company as reasonably requested by the Company in
connection with the preparation and filing of any Registration
Statement hereunder, unless such Purchaser has notified the
Company in writing of such Purchaser's election to exclude all of
such Purchaser's Warrants or Registrable Securities from such
Registration Statement; and
(d) Each Purchaser agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind
described in Section 3(d) or 3(e) above, such Purchaser will
immediately discontinue disposition of its Warrants or
Registrable Securities pursuant to the Registration Statement
covering such Warrants or Registrable Securities until such
copies of the supplemented or amended prospectus contemplated by
Section 3(d) or 3(e) shall be furnished to such Purchaser.
(e) If the offering is underwritten, at the request of
the managing underwriters, each Purchaser or his permitted
assignee holding more than one percent (1%) of the Company's
voting securities shall agree not to sell or otherwise transfer
or dispose of any Registrable Securities of the Company held by
such Purchaser (other than those included in the registration)
for a period specified by the underwriters not to exceed ninety
(90) days following the effective date of the Registration
Statement, provided that all officers and directors of the
Company and holders of at least one percent (1%) of the Company's
voting securities enter into similar agreements. The obligations
described in this Section 4(e) shall not apply to a Registration
relating solely to employee share option plans or an acquisition
transaction registered on Form S-4.
5. EXPENSES OF REGISTRATION. All expenses, other than
underwriting discounts and commissions and other fees and
expenses of investment bankers and other than brokerage
commissions, incurred in connection with registrations, filings
or qualifications pursuant to Section 3, but including, without
limitation, all registration, listing, and qualifications fees,
printing and accounting fees, and the fees and disbursements of
counsel for the Company, and the fees of one counsel to the
holders of Warrants and Registrable Securities not exceeding
$2,500, shall be borne by the Company.
6. INDEMNIFICATION. In the event any Warrants or
Registrable Securities are included in a Registration Statement
under this Agreement:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Purchaser who holds such
Warrants or Registrable Securities, the directors, if any, of
such Purchaser, the officers, if any, of such Purchaser, each
person, if any, who controls any Purchaser within the meaning of
the Securities Act or the Exchange Act (each, an "Indemnified
Person"), against any losses, claims, damages, liabilities or
expenses (joint or several) incurred (collectively, "Claims") to
which any of them may become subject under the Securities Act,
the Exchange Act or otherwise, insofar as such Claims (or actions
or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: (i) any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement or any post-effective amendment thereof or
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they
were made, not misleading, (ii) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary
prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as
amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the Commission) or the
omission or alleged omission to state therein any material fact
necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading,
or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state or foreign securities
law or any rule or regulation under the Securities Act, the
Exchange Act or any state or foreign securities law (the matters
in foregoing clauses (i) through (iii) being, collectively,
"Violations"). The Company shall, subject to the provisions of
Section 6(b) below, reimburse each Purchaser, promptly as such
expenses are incurred and are due and payable, for any reasonable
legal and other costs, expenses and disbursements in giving
testimony or furnishing documents in response to a subpoena or
otherwise, including without limitation, the reasonable costs,
expenses and disbursements, as and when incurred, of
investigating, preparing or defending any such action, suit,
proceeding or investigation (whether or not in connection with
litigation in which such Purchaser is a party), incurred by it in
connection with the investigation or defense of any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a) shall
not (i) apply to any Claim arising out of or based upon a
Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf
of any Indemnified Person expressly for use in connection with
the preparation of the Registration Statement or any such
amendment thereof supplement thereto; (ii) with respect to any
preliminary prospectus, inure to the benefit of any such person
from whom the person asserting any such Claim purchased the
Warrants or Registrable Securities that are the subject thereof
(or to the benefit of any person controlling such person) if the
untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the final prospectus, as
then amended or supplemented, if such final prospectus was timely
made available by the Company pursuant to Section 3(b) hereof;
(iii) be available to the extent that such Claim is based upon a
failure of the Purchaser to deliver or to cause to be delivered
the prospectus made available by the Company, if such prospectus
was timely made available by the Company pursuant to Section 3(b)
hereof; or (iv) apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent
of the Company, which consent shall not be unreasonably withheld.
Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of the Warrants or
Registrable Securities by the Purchaser pursuant to Section 9.
Each Purchaser will indemnify the Company and its officers and
directors against any Claims arising out of or based upon a
Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company, by or on behalf
of such Purchaser, expressly for use in connection with the
preparation of the Registration Statement, subject to such
limitations and conditions are applicable to the Indemnification
provided by the Company to this Section 6.
(b) Promptly after receipt by an Indemnified Person
under this Section 6 of notice of the commencement of any action
(including any governmental action), such Indemnified Person
shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate
in, and to the extent that the indemnifying party so desires,
jointly with any other indemnifying party similarly notified, to
assume control of the defense thereof with counsel mutually
satisfactory to the indemnifying party and the Indemnified Person,
provided, however, that an Indemnified Person shall have the right
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to retain its own counsel with the fees and expenses to be paid by
the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such
counsel of the Indemnified Person and the indemnifying party
would be inappropriate due to actual or potential differing
interests between such Indemnified Person and any other party
represented by such counsel in such proceeding. In such event,
the Company shall pay for only one separate legal counsel for the
Purchasers, and such legal counsel shall be selected by the
Purchasers holding a majority in interest of the Registrable
Securities included in the Registration Statement to which the
Claim relates. The failure to deliver written notice to an
indemnifying party within a reasonable time after the
commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person
under this Section 6, except to the extent that the indemnifying
party is materially prejudiced in its ability to defend such
action. The indemnification required by this Section 6 shall be
made by periodic payments of the amount thereof during the course
of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.
(c) No indemnifying party, in the defense of any such
claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such
Indemnified Person of an unconditional and irrevocable release
from all liability in respect of such claim or litigation.
(d) Notwithstanding the foregoing, to the extent that
any provisions relating to indemnification or contribution
contained in the underwriting agreements entered into among the
Company, the underwriters and any Purchasers in connection with
the underwritten public offering are in conflict with the
foregoing provisions, the provisions in such underwriting
agreements shall be controlling as to the Registrable Securities
included in the public offering; provided, however, that if, as a
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result of this Section 6(d), any Purchaser, its officers, directors,
partners or any person controlling such Purchaser is held liable
for an amount which exceeds the aggregate proceeds received by such
Purchaser from the sale of Registrable Securities included in a
registration, pursuant to such underwriting agreement (the
"Excess Liability"), the Company shall reimburse such Purchaser
for such Excess Liability.
7. CONTRIBUTION. To the extent any indemnification by an
indemnifying party is prohibited or limited under applicable law,
the indemnifying party agrees to contribute to the amount paid or
payable by such indemnified party as a result of such loss,
claim, damage, liability or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying
party on the one hand and the Indemnified Person on the other
hand in connection with the statements or omissions which
resulted in such Claim, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and
the Indemnified Person shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the
Indemnified Person, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission. Notwithstanding the forgoing, (a) no
contribution shall be made under circumstances where the payor
would not have been liable for indemnification under the fault
standards set forth in Section 6, (b) no seller of Warrants or
Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any seller of Warrants or
Registrable Securities who was not guilty of such fraudulent
misrepresentation and (c) contribution by any seller of Warrants
or Registrable Securities shall be limited in amount to the net
proceeds received by such seller from the sale of such Warrants
or Registrable Securities. The Company and each Purchaser agree
that it would not be just and equitable if contribution pursuant
to this Section 7 were determined by pro rata allocation (even if
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the Purchasers and any underwriters were treated as one entity for
such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to
in this Section.
8. REPORTS UNDER EXCHANGE ACT. With a view to making
available to the Purchasers the benefits of Rule 144 promulgated
under the Securities Act or any other similar rule or regulation
of the Commission that may at any time permit the Purchasers to
sell securities of the Company to the public without registration
("Rule 144"), the Company agrees to:
(a) make and keep public information available, as
those terms are understood and defined in Rule 144;
(b) file with the Commission in a timely manner all
reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) furnish to each Purchaser, so long as such
Purchaser owns Warrants or Registrable Securities, promptly upon
request, (i) a written statement by the Company that it has
complied with the reporting requirements of the Securities Act
and the Exchange Act, (ii) a copy of the most recent annual or
periodic report of the Company and such other reports and
documents so filed by the Company and (iii) such other
information as may be reasonably requested to permit the
Purchasers to sell such securities pursuant to Rule 144 without
registration.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to
have the Company register Warrants or Registrable Securities
pursuant to this Agreement shall be automatically assigned by
each Purchaser to any transferee (other than entities that are
specifically identified as the Company's competitors under the
caption "Competition" in the Company's 1997 Annual Report) of all
or any portion of the shares of Series A Preferred Stock or the
Warrants held by such Purchaser if: (a) such Purchaser agrees in
writing with the transferee or assignee to assign such rights,
and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment; (b) the Company is, within
a reasonable time after such transfer or assignment, furnished
with written notice of (i) the name and address of such
transferee or assignee and (ii) the Securities with respect to
which such registration rights are being transferred or assigned;
(c) at or before the time the Company receives the written notice
contemplated by clause (b) of this sentence, the transferee or
assignee agrees in writing with the Company to be bound by all of
the provisions contained herein; and (d) the transfer of the
relevant Securities complies with the restrictions set forth in
Section 4 of the Securities Purchase Agreement. In the event of
any delay in filing the Registration Statement as a result of
such assignment, the Company shall not be liable for any damages
arising from such delay.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of
this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of
the Company and the Purchasers who hold a majority in interest of
the Registrable Securities. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon each
Purchaser and the Company.
11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of
Warrants or Registrable Securities whenever such person or entity
owns of record such Warrants or Registrable Securities. If the
Company receives conflicting instructions, notices or elections
from two or more persons or entities with respect to the same
Warrants or Registrable Securities, the Company shall act upon
the basis of the instructions, notice or election received from
the registered owner of such Warrants or Registrable Securities.
(b) Any notice required or permitted hereunder shall
be given in writing (unless otherwise specified herein) and shall
be effective upon personal delivery, via facsimile (upon receipt
of confirmation of error-free transmission) or two business days
following deposit of such notice with an internationally
recognized courier service, with postage prepaid and addressed to
each of the other parties thereunto entitled at the following
addresses, or at such other addresses as a party may designate by
ten days advance written notice to each of the other parties
hereto.
COMPANY: AMERICAN ELECTROMEDICS CORP.
Amherst, New Hampshire 03031
ATT: Michael Pieniazek
Tel.: (603) 880-6300
Fax: (603) 880-8977
WITH COPIES TO:
REID & PRIEST LLP
40 West 57th Street
New York, New York 10019
ATT.: Bruce Rich
Tel.: 212-603-6780
Fax: 212-603-2001
PURCHASERS: At the addresses set forth on the signature
page of this Agreement, as such addresses may
be updated from time to time by each of the
Purchasers.
WITH COPIES TO:
WEST END CAPITAL LLC
One World Trade Center
Suite 4563
New York, New York 10048
ATT.: Daniel Saks
Tel.: 212-775-9299
Fax.: 212-775-9311
MORRISON & FOERSTER LLP
1290 Avenue of the Americas
New York, New York 10104
ATT.: Ira Greenstein
Tel.: 212-468-8000
Fax: 212-468-7900
(c) Failure of any party to exercise any right or
remedy under this Agreement or otherwise, or delay by a party in
exercising such right or remedy, shall not operate as a waiver
thereof.
(d) This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York,
except for provisions with respect to internal corporate matters
of the Company which shall be governed by the corporate laws of
the State of Delaware. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any
part of the City of New York or the state courts of the State of
New York sitting in the City of New York in connection with any
dispute arising under this Agreement and hereby waives, to the
maximum extent permitted by law, any objection, including any
objection based on forum non conveniens, to the bringing of any
such proceeding in such jurisdictions. This Agreement may be
signed in one or more counterparts, each of which shall be deemed
an original. The headings of this Agreement are for convenience
of reference and shall not form part of, or affect the
interpretation of, this Agreement. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction,
such validity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other
jurisdiction. Subject to the provisions of Section 10 hereof,
this Agreement may be amended only by an instrument in writing
signed by the party to be charged with enforcement. This
Agreement supersedes all prior agreements and understandings
among the parties hereto with respect to the subject matter
hereof.
(e) This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter
hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth, or referred to herein
and in the other Primary Documents. This Agreement supersedes
all prior agreements and understandings among the parties hereto
with respect to the subject matter hereof.
(f) Subject to the requirements of Section 9 hereof,
this Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to
the masculine, feminine or neuter, singular or plural, as the
context may require.
(h) The Company acknowledges that any failure by the
Company to perform its obligations under Section 2(a), or any
delay in such performance could result in direct damages to the
Purchaser, and the Company agrees that, in addition to any other
liability the Company may have by reason of any such failure or
delay, the Company shall be liable for all direct damages caused
by any such failure or delay, unless same is the result of force
majeure. Neither party shall be liable for consequential
damages.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed.
"COMPANY"
AMERICAN ELECTROMEDICS CORP.
By: /s/ Michael T. Pieniazek
---------------------------
Name: Michael T. Pieniazek
Title: President
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed.
"PURCHASERS"
JUBILEE INVESTORS LLC
By: WEST END CAPITAL LLC, Manager
By: /s/ Daniel Saks
-------------------------
Name: Daniel Saks
Title: Managing Director
WEST END CAPITAL LLC
By: /s/ Daniel Saks
-------------------------
Name: Daniel Saks
Title: Managing Director
EXHIBIT A TO REGISTRATION RIGHTS AGREEMENT
------------------------------------------
PURCHASERS
-----------------------------------------------------
SHARES OF
SERIES A
PREFERRED NUMBER OF
STOCK WARRANTS
PURCHASER PURCHASED PURCHASED
--------- --------- ---------
-----------------------------------------------------
Jubilee Investors LLC 3,000 shares N/A
c/o West End Capital
LLC
One World Trade
Center, Suite 4563
New York, New York
10048
------------------------------------------------------
West End Capital LLC N/A $50,000
One World Trade
Center, Suite 4563
New York, New York
10048
-------------------------------------------------------