EX-4.2 3 g70218ex4-2.txt REGISTRATION RIGHTS AGREEMENT JUNE 13, 2001 1 EXHIBIT 4.2 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of June 13, 2001, by and among SPECTRX, INC., a Delaware corporation (the "Company"), and those purchasers of the Company's common stock set forth on Schedule I hereto (the "Purchasers"). This Agreement is made pursuant to the Stock Purchase Agreement, dated as of June 13, 2001 (the "Stock Purchase Agreement"), by and between the Company and the Purchasers, pursuant to which the Company is issuing to the Purchasers 395,633 shares (the "Common Shares") of its common stock, $.001 par value per share (the "Common Stock") and warrants to purchase 79,127 shares of the Common Stock (the "Warrants"). The execution and delivery of this Agreement is a condition to the closing (the "Closing") under the Stock Purchase Agreement. In consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1. REGISTRATION RIGHTS (a) Filing of Form S-3 "Resale" Registration Statement. Within 30 days following the date of the Closing, the Company shall use its best efforts to file with the Securities and Exchange Commission (the "Commission") a "resale" registration statement on Form S-3 pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Securities Act") (together with any exhibits, amendments or supplements thereto, and any documents incorporated by reference therein, the "Registration Statement") with respect to (i) the Common Shares, (ii) the shares of Common Stock issuable pursuant to the exercise of the Warrants (the "Warrant Shares"), (iii) the shares of Common Stock issuable pursuant to the exercise of the Additional Warrants (as defined in Section 1(d)) (the "Additional Warrant Shares") and (iv) any securities of the Company issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, the Common Shares, the Warrant Shares or the Additional Warrant Shares. The securities described in the preceding sentence are collectively referred to herein as the "Registrable Securities"; provided, that the term "Registrable Securities" shall not include securities sold pursuant to the Registration Statement or transferred to a person other than a Permitted Transferee as defined in Section 8(a) herein. The Registration Statement may include securities of the Company other than Registrable Securities. 2 (b) Effectiveness of Registration Statement. The Company shall, subject to Section 6 hereof, use its best efforts to cause the Registration Statement to become effective as soon as practicable after the filing thereof, and shall use its best efforts to keep the Registration Statement continuously effective from the date such Registration Statement becomes effective until the earliest of (i) the date on which all such Securities have been disposed of in accordance with such Registration Statement, (ii) the date on which all Registrable Securities are eligible to be sold pursuant to Rule 144(k) and (iii) the second anniversary of the date such Registration Statement becomes effective (the "Termination Date"). (c) Supplements; Amendments. In the event that any securities are issued in respect of the Common Shares, the Warrant Shares or the Additional Warrant Shares, the Company shall cause such additional securities that become Registrable Securities to be registered under the Securities Act. (d) Additional Warrants. (i) If the Company does not file the Registration Statement on or before the date that is 30 days after the date of the Closing, then for each 30 day period between 30 days after the date of the Closing and the date the Registration Statement is filed, the Company hereby covenants and agrees to grant to each Purchaser a warrant to purchase a number of shares of Common Stock equal to 5% of the number of Common Shares issued to each Purchaser pursuant to the Stock Purchase Agreement (an "Additional Warrant"). (ii) If the Registration Statement does not become effective on or before the date that is 90 days after the date of the Closing, then for each 30 day period between 90 days after the date of the Closing and the date the Registration Statement first becomes effective, the Company hereby covenants to grant to each Purchaser an Additional Warrant. (iii) Any Additional Warrants issued pursuant to immediately preceding subsections (i) and (ii) shall be in a form substantially identical (including the exercise price) to Exhibit A of the Stock Purchase Agreement. (iv) Notwithstanding the foregoing, in no event will the Company be required, pursuant to this Section 1(d), to issue Additional Warrants for more than an aggregate of 79,127 shares of Common Stock. 2. EXPENSES The Company shall bear all expenses, fees and costs incurred in connection with the preparation, filing, distribution and effectiveness of the Registration Statement and any supplements or amendments thereto, whether or not the Registration Statement becomes effective, and whether all, none or some of the Registrable Securities are sold pursuant to the Registration Statement, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, fees and state securities, or "blue sky," fees and expenses and the expense of any special audits incident to or required by, or in connection with the filing and effectiveness of the Registration Statement (but excluding the 2 3 compensation of regular employees of the Company, which shall be paid in any event by the Company), and the Holder shall pay all selling commissions, brokerage fees and stock transfer taxes applicable to the securities sold by such holder. 3. REGISTRATION PROCEDURES The Company will promptly advise the Purchasers and their permitted transferees ("the Holders") of the filing and effectiveness of the Registration Statement and, at the Company's expense, will: (a) furnish to each Holder copies of the Registration Statement (excluding exhibits thereto) and any prospectus forming a part thereof and any amendments and supplements thereto (including all documents incorporated or deemed incorporated by reference therein prior to the effectiveness of the Registration Statement and including each preliminary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, which documents, other than documents incorporated or deemed incorporated by reference, will be subject to the review of the Holders for a period of at least two (2) business days, and the Company shall not file the Registration Statement or such prospectus or any amendment or supplement to the Registration Statement or prospectus if any Holder shall reasonably object within two (2) business days after the receipt thereof; a Holder shall be deemed to have reasonably objected to such filing only if the Registration Statement, amendment, prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission with respect to such Holder or its plan of resale; (b) furnish to each Holder one conformed copy of the Registration Statement and of each amendment and supplement thereto (in each case excluding exhibits) and such number of copies of the prospectus forming a part of the Registration Statement (including each preliminary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, and such other documents, including, without limitation, documents incorporated or deemed to be incorporated by reference prior to the effectiveness of such registration statement, as each of the Holders from time to time may reasonably request; (c) to the extent practicable, promptly upon the filing of any document that is to be incorporated by reference into the Registration Statement or prospectus forming a part thereof subsequent to the effectiveness thereof, and in any event no later than five (5) business days after such document is filed with the Commission, provide copies of such document to the Holders, if requested, and make representatives of the Company available for discussion of such document and other customary due diligence matters; (d) make available, at reasonable times for inspection by the Holders, and any attorney, accountant, financial adviser or other representative (collectively, "Representatives") retained by the Holders, subject to the recipient's prior agreement to keep such information confidential and not use or disclose it, all financial and other records, pertinent corporate documents and properties of the Company and cause the officers, directors and employees of the Company to supply all information reasonably requested by the Holders or their respective Representatives in connection with the preparation, filing and effectiveness of the Registration Statement; 3 4 (e) use its reasonable best efforts (i) to register or qualify all Registrable Securities covered by the Registration Statement under state securities, or "blue sky," laws of such States of the United States of America as the Holders of Registrable Securities covered by the Registration Statement shall reasonably request, (ii) to keep such registration or qualification in effect for so long as the Registration Statement remains in effect, and (iii) to take any other action which may be reasonably necessary or advisable to enable the Holders to consummate the disposition in such jurisdictions of the securities to be sold by the Holders, consistent with the plan of distribution described in the prospectus included in the Registration Statement, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction where it is not so qualified, or to subject itself to taxation in any such jurisdiction, or to execute a general consent to service of process in effecting such registration, qualification or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act or applicable rules or regulations thereunder; (f) subject to Section 6 hereof, promptly notify each Holder of Registrable Securities covered by the Registration Statement (i) upon discovery that, or upon the happening of any event as a result of which, the prospectus forming a part of the 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 or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of proceedings for that purpose, (iii) of any request by the Commission for (A) amendments to the Registration Statement or any document incorporated or deemed to be incorporated by reference in the Registration Statement or (B) supplements to the prospectus forming a part of the Registration Statement, or (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 of any proceeding for such purpose, and at the request of any such Holder promptly prepare and file an amendment to the Registration Statement or a supplement to the prospectus as the Company may deem necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include 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 the light of the circumstances under which they were made, not misleading and furnish to each Holder a reasonable number of copies of such supplement to, or amendment of, such prospectus and, in the event of a stop order, use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of any the Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction; (g) if requested by any Holder, promptly incorporate in the Registration Statement by filing a Form 8-K or filing a supplement to the prospectus, if necessary, to reflect any change in the information regarding the Holder; (h) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least 12 months, but not more than 18 months, beginning with the first full calendar month after the effective date of the Registration 4 5 Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder; (i) use its best efforts to cause all Registrable Securities included in the Registration Statement to be listed on the Nasdaq National Market or each securities exchange on which securities of the same class are then listed, or, if not then listed on any securities exchange, to be eligible for trading in any over-the-counter market or trading system in which securities of the same class are then traded. 4. INDEMNIFICATION (a) Indemnification by the Company. The Company will indemnify: (i) each of the Holders, as applicable, (ii) any underwriter (as defined in the Securities Act) for a Holder, (iii) each of the officers, directors, trustees, members and partners of each of the Holders and any underwriter for a Holder, and (iv) each individual, partnership, joint stock company, corporation, trust, unincorporated organization, government agency or political subdivision (each of the foregoing, a "Person") controlling each of the Holders or any underwriter for a Holder (each of (i) through (iv), an "Indemnified Person"), with respect to the Registration Statement, against all expenses, claims, losses, damages and liabilities (including in settlement of litigation) (or actions, investigations or proceedings in respect thereof) (collectively, a "Claim") arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in the Registration Statement or any prospectus, offering circular or other document (including any related registration statement, notification or the like) incident to the registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any violation (or alleged violation) by the Company of the Securities Act, the Exchange Act or any other law, including any state securities law, or any rule or regulation thereunder, and will reimburse each Indemnified Person promptly as such expenses are incurred, for any legal and any other expenses reasonably incurred in connection with investigating or defending any such Claim; provided, however, that the Company will not be liable to any Indemnified Person to the extent that any such Claim arises out of or is based on any untrue statement or omission based upon and in conformity with written information furnished to the Company by the Holders or their representatives and stated to be specifically for use in the Registration Statement. This indemnity obligation will remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Persons and will survive any transfer of the Registrable Securities by the Holders. (b) Indemnification by the Holders. Each of the Holders will, if Registrable Securities held by it are included in the securities as to which such Registration Statement is being effected, indemnify the Company, each of its directors and officers, and each Person who controls the 5 6 Company, against all Claims arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in the Registration Statement or any prospectus, offering circular or other document made by or on behalf of such Holder, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements by or on behalf of such Holder therein, in light of the circumstances in which they were made, not misleading, and will reimburse the Company, its directors, officers, partners, members or control Persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such Claim, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in the Registration Statement or any prospectus, offering memorandum or other document in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Holder and stated to be specifically for use therein; provided, however, that the obligations of each of the Holders hereunder shall be limited to an amount equal to the net proceeds to such Holder of securities sold as contemplated herein. (c) Procedures. Each party entitled to indemnification under this Agreement (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any Claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such Claim; provided that counsel for the Indemnifying Party, who shall conduct the defense of such Claim, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party's expense (unless the Indemnified Party shall have reasonably concluded that there may be a conflict of interest between the Indemnifying Party and the Indemnified Party in such action, in which case the fees and expenses of one such counsel for all Indemnified Parties shall be at the expense of the Indemnifying Party), and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement except to the extent that the Indemnifying Party is prejudiced thereby. No Indemnifying Party, in the investigation or defense of any such Claim shall, except with the consent of each Indemnified Party (which consent shall not be unreasonably withheld or delayed), consent to entry of any judgment or enter into any settlement or compromise which does not include an unconditional release of the Indemnifying Party from all liability in respect to such Claim. Each Indemnified Party shall furnish such information regarding itself or the Claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with the investigation and defense of such Claim. (d) Contribution. If the indemnification provided for in this Agreement is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any Claim, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other 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 of the Indemnified Party 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 Indemnifying Party or by the Indemnified 6 7 Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. Contribution (together with any indemnification or other obligations under this Section 4) by any Holder (including any Indemnified Person associated with such Holder) shall be limited in amount to the net amount of proceeds received by such Holder from the sale of Registrable Securities by it. 5. PROVISION OF INFORMATION BY THE HOLDERS Each of the Holders whose Registrable Securities are included in the Registration Statement shall furnish to the Company such information regarding such Holder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification or compliance referred to in this Agreement, and shall promptly notify the Company if such information becomes incorrect or misleading, or requires amendment or updating. Each of the Holders agrees that the plan of distribution included in any prospectus relating to the Registrable Securities shall be as set forth in Schedule III hereto and that such Holder will not sell any Securities in any manner other than as provided therein. Each Holder represents and warrants to the Company that the information regarding such Holder set forth on Schedule II is accurate and complete in all material respects. 6. HOLDBACK; POSTPONEMENT Notwithstanding the other provisions of this Agreement, if the Board of Directors of the Company determines in good faith that it is in the best interests of the Company (i) not to disclose the existence of facts surrounding any proposed or pending acquisition, disposition, strategic alliance or financing transaction involving the Company, or (ii) for any purpose, to suspend the registration rights set forth herein, the Company may, by prompt notice to the Holders, (A) suspend the rights of the Holders to make sales pursuant to the Registration Statement, and/or (B) postpone the preparation, filing and effectiveness of the Registration Statement, in each case for such a period of time as the Board of Directors may reasonably determine; provided that such periods of suspension may not exceed 90 days in the aggregate in any consecutive 12 month period. 7. RULE 144 REPORTING With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Registrable Securities to the public without registration, until the second anniversary of the date the Closing, the Company agrees to: (i) Make and keep adequate current public information available, as those terms are understood and defined in Rule 144 under the Act; (ii) Use its best efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Act and the Securities Exchange Act of 1934, as amended; and (iii) So long as a Holder owns any Registrable Securities to furnish to the Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144, and of the Act and 7 8 the Securities Exchange Act of 1934, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the company and other information in the possession of or reasonably obtainable by the Company as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration. 8. MISCELLANEOUS (a) Assignment. The registration rights set forth herein may be assigned, in whole or in part, to any transferee of Registrable Securities permitted in accordance with the Stock Purchase Agreement, which transferee, upon registration on the Company's or its transfer agent's books and records as a holder of record of Registrable Securities, shall be considered thereafter to be a Holder and shall be bound by all obligations and limitations of this Agreement and the Stock Purchase Agreement, provided, however that assignment will only be available if (i) such transfer may otherwise be effected in accordance with applicable securities laws and (ii) such assignee or transferee acquires at least 150,000 shares of Registrable Securities or is an affiliate (as such term is defined in Rule 144 under the Securities Act) of a Holder (a "Permitted Transferee"). (b) Interpretation. (i) Directly or Indirectly. Where any provision in this Agreement refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person. (ii) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. (iii) Section Headings. The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof. (c) Notices. (i) All communications under this Agreement shall be in writing and shall be delivered by facsimile or by hand or mailed by overnight courier or by registered or certified mail, postage prepaid: (A) if to the Company, to SpectRx, Inc., 6025A Unity Drive, Norcross, Georgia 30071, facsimile (770) 242-8639, Attention: Thomas H. Muller, Jr. or at such other address as it may have furnished in writing to the Purchasers; (B) if to the Purchasers, at the addresses listed on Schedule I hereto, or at such other addresses as may have been furnished the Company in writing. 8 9 (ii) Any notice so addressed shall be deemed to be given (A) if delivered by facsimile or by hand, on the date of such delivery, (B) if mailed by overnight mail service, on the first business day following the date of such mailing, or (C) if mailed by registered or certified mail, on the third business day after the date of such mailing. (d) Reproduction of Documents. This Agreement and all documents relating thereto, including, without limitation, any consents, waivers and modifications which may hereafter be executed may be reproduced by the Purchasers by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and the Purchasers may destroy any original document so reproduced. The parties hereto agree and stipulate that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by the Investors in the regular course of business) and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. (e) 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. (f) Entire Agreement; Amendment and Waiver. This Agreement constitutes the entire understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understanding among such parties as to same. This Agreement may be amended, and the observance of any term of this Agreement may be waived only with the written consent of the Company and the Holders of a majority of the then outstanding Registrable Securities. (g) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. (h) Remedies. Each Holder of Registrable Securities, 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 Agreement. 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 Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. (i) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of the remaining provisions contained herein shall not be in any way impaired thereby, and shall remain in full force and effect, it being intended and understood that all of the rights and privileges of each of the Holders shall be enforceable to the fullest extent permitted by law. (j) No Grant of Registration Rights to Third Parties. The Company hereby covenants and agrees that it will not grant registration rights to or register any securities of any third party before the Registration Statement becomes effective that would adversely affect the ability of the 9 10 Company to register the Registrable Securities subject to the terms and conditions of this Agreement. (k) Termination of Registration Rights. All rights of the Holders under this Agreement shall terminate on the Termination Date. (l) Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to the Holders, upon any breach or default of the Company under this Agreement, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach or default, or any acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character by a Holder of any breach or default under this Agreement, or any waiver by a Holder of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in writing and that all remedies, either under this Agreement, or by law or otherwise afforded to a Holder, shall be cumulative and not alternative. (m) Attorneys' Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. [SIGNATURES ON FOLLOWING PAGE] 10 11 IN WITNESS WHEREOF, the undersigned, thereunto duly authorized, have executed this Agreement as of the date first set forth above. SPECTRX, INC. By: /S/ Thomas H. Muller, Jr. --------------------------------------------- Name: Thomas H. Muller, Jr. ------------------------------------- Title: Executive Vice President & CFO ----------------------------------- PURCHASERS: SPECIAL SITUATIONS FUND III, L.P. By: /S/ David Greenhouse --------------------------------------------- Name: David Greenhouse ------------------------------------- Title: Managing Director ----------------------------------- SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P. By: /S/ David Greenhouse --------------------------------------------- Name: David Greenhouse ------------------------------------- Title: Managing Director ----------------------------------- 11 12 SCHEDULE I THE PURCHASERS
NAME ADDRESS -------------------------------------------- --------------------------- Special Situations Fund III, L.P. c/o Special Situations Fund 153 E. 53rd Street New York, New York 10022 Special Situations Private Equity Fund, L.P. c/o Special Situations Fund 153 E. 53rd Street New York, New York 10022
12 13 SCHEDULE II HOLDER INFORMATION Special Situations III Fund, L.P. Name in which shares are registered: Special Situations Fund III, L.P. ---------------------------- Name of beneficial owner, if different: ------------------ The following describes the nature of any position, office or other material relationship which the Holder has had within the past three years with SpectRx, Inc. and any of its affiliates: None -------------------------------------------------------------------------------- The following is the number of shares of any class of stock of SpectRx, Inc. (indicating the class) and each other right, option or warrant to acquire any shares of any class of stock of SpectRx, Inc. beneficially owned (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the Holder, prior to the investment under the Stock Purchase Agreement: None -------------------------------------------------------------------------------- The Holder intends to offer the following number of shares of common stock of SpectRx, Inc. under the Registration Statement: 237,380 shares, plus 47,476 shares underlying warrants -------------------------------------------------------------------------------- Special Situations Private Equity Fund, L.P. Name in which shares are registered:Special Situations Private Equity Fund, L.P. -------------------------------------------- Name of beneficial owner, if different: ------------------ The following describes the nature of any position, office or other material relationship which the Holder has had within the past three years with SpectRx, Inc. and any of its affiliates: None -------------------------------------------------------------------------------- The following is the number of shares of any class of stock of SpectRx, Inc. (indicating the class) and each other right, option or warrant to acquire any shares of any class of stock of SpectRx, Inc. beneficially owned (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the Holder, prior to the investment under the Stock Purchase Agreement: None -------------------------------------------------------------------------------- The Holder intends to offer the following number of shares of common stock of SpectRx, Inc. under the Registration Statement: 158,253 shares, plus 31,651 shares underlying warrants -------------------------------------------------------------------------------- 13 14 SCHEDULE III PLAN OF DISTRIBUTION Any or all of the shares offered by the selling stockholders may be offered for sale and sold by or on behalf of the selling stockholders from time to time in varying amounts, including in block transactions, on the Nasdaq Stock Market or the over-the-counter market, in privately negotiated transactions, or otherwise (other than underwritten offerings), at prices prevailing in such market or as may be negotiated at the time of the sale. The shares may be sold by the selling stockholders directly to one or more purchasers, through agents designated from time to time or to or through broker-dealers designated from time to time. In the event the shares are publicly offered through broker-dealers or agents, the selling stockholders may enter into agreements with respect thereto. Such broker-dealers or agents may receive compensation in the form of discounts, concessions or commissions from the selling stockholders and/or the purchasers of the shares. The selling stockholders and any such broker-dealers or agents that participate in the distribution of the shares may be deemed to be underwriters within the meaning of the Securities Act, and any profit on the sale of the shares by them and any discounts, commissions or concessions received by them may be deemed to be underwriting discounts and commissions under the Securities Act. Any such broker-dealers and agents may engage in transactions with, and perform services for, the Company. At the time a particular offer of shares is made by the selling stockholders, to the extent required, a prospectus supplement will be distributed which will set forth the aggregate number of shares being offered, and the terms of the offering, including the public offering price thereof, the name or names of any broker-dealers or agents, any discounts, commissions and other items constituting compensation from, and the resulting net proceeds to, the selling stockholders. In order to comply with the securities laws of certain states, sales of shares offered hereby to the public in such states may be made only through broker-dealers who are registered or licensed in such states. Sales of shares offered hereby must also be made by the selling stockholders in compliance with other applicable state securities laws and regulations. 14