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Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this
“Agreement”) is made and entered into as of _______,
2006 (the “Effective Date”), among
Zynex Medical Holdings Inc. ,
a Nevada corporation (the “Company”) and ________ or
his designees (the “Purchaser”). Capitalized terms not
otherwise herein defined shall have the meanings ascribed to them
in the Securities Purchase Agreement between the Company and the
Purchaser dated _______, 2006, as may be amended from time to time
(the “Purchase Agreement”).
RECITALS
WHEREAS ,
the Purchaser has entered into the Purchase Agreement with the
Company pursuant to which the Purchaser has agreed to purchase
Common Stock in the amount set forth in such Purchase Agreement
(the “Shares”). Pursuant to the Purchase Agreement, the
Company has also agreed to issue Warrants to the Purchaser to
purchase Common Stock in the amount set forth in the Purchase
Agreement (the “Warrant Shares”).
WHEREAS ,
as a condition to the purchase of the Common Stock and the
potential exercise of Warrants by the Purchaser, the parties have
agreed to enter into this Agreement.
AGREEMENT
THEREFORE,
the parties hereto, in consideration of the foregoing, the
mutual covenants and agreements hereinafter set forth, and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, agree as
follows:
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1.
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Definitions
and Interpretation
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a.
Certain
Definitions
As
used in this Agreement, the following capitalized terms shall
have the following meanings:
(i)
“1933
Act” means the Securities Act of 1933, as
amended.
(ii)
“1934
Act” means the Securities Exchange Act of 1934, as
amended.
(iii)
“Common
Stock” means shares of the Company’s Common Stock,
$.001 par value.
(iv)
“Other
Purchasers” means other parties that purchased
Securities from the Company on substantially the same terms
and in the same offering by the Company and Broker as the
Securities are being purchased by the Purchaser.
(v)
“Registrable
Securities” means (i) the Shares, (ii) the Warrant
Shares and (iii) any shares or other securities of the Company
issued or issuable with respect thereto upon any stock split,
stock dividend, recapitalization or similar event, excluding
shares or other securities sold or transferred pursuant to an
effective registration statement, sold or otherwise
transferred pursuant to Rule 144 under the 1933 Act, sold or
otherwise transferred pursuant to a transfer not requiring
registration under the 1933 Act, held by Purchaser or an Other
Purchaser who at such time is not an Affiliate of the Company
and that are eligible for sale pursuant to Rule 144(k) under
the 1933 Act, and held by Purchaser or an Other Purchaser who
at such time is an Affiliate of the Company if all of such
shares or other securities are eligible for sale pursuant to
Rule 144 under the 1933 Act and could be sold in one
transaction in accordance with the volume limitations
contained in Rule 144(e)(1)(i) under the 1933
Act.
(vi)
“Registration
Expenses” means any and all expenses incident to
performance of or compliance with this Agreement, including
all applicable registration and filing fees imposed by the SEC
and any securities exchange or market on which the Registrable
Securities are required to be listed and/or quoted, as the
case may be, all fees and expenses incurred in connection with
compliance with state securities or “blue sky”
laws (including reasonable fees and disbursements of counsel)
in connection with qualification of any of the Registrable
Securities under any state securities or blue sky laws, all
expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing the
Registration Statement, any Prospectus, certificates and other
documents relating to the performance of and compliance with
this Agreement, all fees and expenses incurred in connection
with the listing, if any, of any of the Registrable Securities
on any securities exchange or exchanges, and the fees and
disbursements of counsel for the Company and of the
independent public accountants of the Company. Registration
Expenses shall specifically exclude underwriting discounts and
commissions, the fees and disbursements of counsel
representing Purchaser or any underwriter or agent acting on
behalf of Purchaser (other than the Broker), and transfer
taxes, if any, relating to the sale or disposition of
Registrable Securities by Purchaser, all of which shall be
borne by Purchaser in all cases.
(vii)
“Registration
Statement” means a registration statement of the Company
(and any other entity required to be a registrant pursuant to
the requirements of the 1933 Act) covering all or a part of
the Registrable Securities under the 1933 Act for which the
Company is eligible, including all amendments (including
post-effective amendments), exhibits and materials
incorporated by reference therein.
(viii)
“SEC”
means the United States Securities and Exchange
Commission.
(ix)
“Selling
Expenses” shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable
Securities and all fees and disbursements of counsel for the
Purchaser.
(x)
“Shelf
Registration Statement” shall mean a Registration
Statement on Form SB-2 (or any successor form) filed pursuant
to Rule 415 of Regulation C promulgated under the 1933 Act (or
any successor rule) covering the Shares and the Warrant
Shares.
b.
Rules
of Interpretation
(i)
Each
term defined in the singular form in Section 1.a or elsewhere
in this Agreement means the plural thereof whenever the plural
form is used, and each term defined in the plural form means
the singular thereof whenever the singular form is used. The
use of a pronoun of any gender is applicable to all
genders.
(ii)
Unless
otherwise specified therein, all terms defined in this
Agreement have the meanings as so defined herein when used in
any other certificate, report or document made or delivered
pursuant hereto.
(iii)
A
reference to any agreement, document or instrument refers to
the agreement, document or instrument as amended or modified
and in effect from time to time in accordance with the terms
thereof and as permitted herein.
(iv)
Except
as otherwise specified, a reference to any applicable law
refers to the law as amended, modified, codified, replaced or
reenacted, in whole or in part, and in effect from time to
time, and to any rules and regulations promulgated thereunder;
and a reference to any section or other provision of any
applicable law refers to that provision of the law from time
to time in effect and constituting the substantive amendment,
modification, codification, replacement or reenactment of the
referenced section or other provision.
c.
Construction
The
headings preceding the text of the sections of this Agreement
and the exhibits hereto are for convenience only and shall not
be deemed part of this Agreement. The language used in this
Agreement shall be deemed to be the language chosen by the
parties to this Agreement to express their mutual intent, and
no rule of strict construction shall be applied against any
party.
2.
Registration
Rights
a.
Agreement
to Register Registrable Securities
(i)
The
Company shall use its commercially reasonable efforts to (a)
file within ninety (90) days of the Closing Date a Shelf
Registration Statement to register 100% of the Registrable
Securities issued to the Purchaser in connection with the
Purchase Agreement and the Registrable Securities issued to
the Other Purchasers, and thereafter to cause the Shelf
Registration Statement to be declared effective by the SEC as
to resales by the Purchasers and the Other Purchasers; and
(b) cause the Shelf Registration Statement to remain
effective for the shorter of the period expiring (A)
twenty-four (24) months following the Closing Date or (B) the
date on which all shares comprising the Registrable Securities
of the Purchaser and the other Purchasers may be sold pursuant
to Rule 144 under the 1933 Act in any three-month period in
one transaction in accordance with the volume limitations
contained in Rule 144(e)(1)(i). The Company shall promptly:
(x) notify the Purchaser after it has received notice of
the time when the Shelf Registration Statement has been
declared effective or any supplement to any prospectus forming
a part of the Shelf Registration Statement has been filed;
(y) notify the Purchaser of any request by the SEC for
the amending or supplementing of the Shelf Registration
Statement or prospectus or if additional information is
required to be filed in connection with the Shelf Registration
Statement, and shall use its commercially reasonable efforts
to prepare and file with the SEC such amendment or supplement
or such additional information; and (z) notify the Purchaser
of the Company’s receipt of, or knowledge of the
issuance of, any stop order by the SEC suspending the
effectiveness of any the Shelf Registration Statement and use
the Company’s commercially reasonable efforts to prevent
the issuance of any stop order or to obtain its withdrawal if
such stop order has been issued. The Purchaser shall not, nor
shall the Purchaser be entitled to, resell any such shares in
reliance upon the Shelf Registration Statement after the Shelf
Registration Statement is no longer effective.
(ii)
Notwithstanding
subsection (i) above, the Company shall not be required to
take any action with respect to the registration or the
declaration or continuation of effectiveness of the Shelf
Registration Statement for a period not to exceed sixty (60)
days (a “Suspension Period”) following notice to
the Purchaser and the Other Purchasers from the Company (a
“Suspension Notice”) of the Company’s
determination in good faith of the existence of any state of
facts or the happening of any event (including without
limitation pending negotiations relating to, or the
consummation of a transaction, or the occurrence of any event
which in the opinion of the Company might require additional
disclosure of material, non-public information by the Company
in the Shelf Registration Statement as to which the Company
believes it has a bona fide business purpose for preserving
confidentiality or which renders the Company unable to comply
with the published rules and regulations of the SEC
promulgated under the Securities Act or the Exchange Act, as
in effect at any relevant time) which might reasonably result
in (a) the Shelf Registration Statement, any amendment or
post-effective amendment thereto, or any document
incorporated
therein by reference containing an untrue statement of a
material fact or omitting to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading, or (b) the prospectus issued under the
Shelf Registration Statement, any prospectus supplement, or
any document incorporated therein by reference including an
untrue statement of material fact or omitting to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading. Upon receipt of a Suspension Notice
from the Company, the Purchaser will forthwith discontinue
disposition of all such shares pursuant to the Shelf
Registration Statement until receipt from the Company of
copies of prospectus supplements or amendments prepared by or
on behalf of the Company, together with a notification that
the Suspension Notice is no longer in effect, and, if so
directed by the Company, the Purchaser will deliver to the
Company all copies in their possession of the prospectus
covering such shares current at the time of receipt of any
Suspension Notice. No more than two (2) such Suspension
Periods shall occur in any twelve (12) month period. In the
event that the Company shall exercise its right to delay or
suspend the filing or effectiveness of the Shelf Registration
hereunder, the applicable time period during which the Shelf
Registration Statement is to remain effective shall be
extended by a period of time equal to the duration of the
Suspension Period.
(iii)
The
Purchaser shall complete the Selling Security Holder Notice
and Questionnaire to be distributed after the Closing Date.
The Purchaser shall notify the Company as promptly as
practicable of any inaccuracy or change in information
previously furnished by the Purchaser to the Company or of the
occurrence of any event as a result of which any prospectus
included in the Registration Statement contains or would
contain an untrue statement of a material fact regarding the
Purchaser’s intended method of distribution of shares of
the Company Stock or omits to state any material fact
regarding the Purchaser’s intended method of
distribution of shares of the Company Stock necessary to make
the statements therein, in light of the circumstances then
existing, not misleading, and promptly to furnish to the
Company any additional information required to correct and
update any previously furnished information or required so
that such prospectus shall not contain, with respect to the
Purchaser or the distribution of such shares, an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances then existing, not misleading.
b.
All
Registration Expenses incurred in connection with any
registration, qualification or compliance pursuant to this
Section 2 shall be borne by the Company, and all Selling
Expenses shall be borne by the Purchaser and the Other
Purchasers pro rata on the basis of the number of their
Registrable Securities so registered.
c.
At
its expense, for two years after the Closing Date the Company
will:
(i)
Prepare
and file with the SEC such amendments and supplements to the
Shelf Registration Statement and the
prospectus
used in connection with such registration statement as may be
necessary to comply with the provisions of the 1933 Act with
respect to the disposition of all securities covered by such
Shelf Registration Statement for the period set forth in
subsection (a) above.
(ii)
Furnish
such number of prospectuses and other documents incident
thereto, including any amendment of or supplement to the
prospectus, as a Purchaser from time to time may reasonably
request;
(iii)
Cause
all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the
Company are then listed;
(iv)
Provide
a transfer agent and registrar for all Registrable Securities
and a CUSIP number for all such Registrable Securities, in
each case not later than the
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