Exhibit 4.4
INVESTORS' RIGHTS AGREEMENT
This Investors' Rights Agreement (this "Agreement") is made __________,
2000, by and among Xx0.xxx Inc. (the "Company"), a Delaware corporation having
its principal address at 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000,
and those persons whose names appear at the end of this Agreement (collectively,
the "Holders" and individually, the "Holder"). Certain capitalized terms used in
this Agreement without definition shall have the meanings given them in Section
14.
PREAMBLE
The Holders have each acquired shares of the Company's Series C-__
Preferred Stock, par value $0.01(the "Preferred Stock"), and warrants (the
"Warrants") to acquire shares of the Company's Common Stock, par value $0.01 per
share, pursuant to separate Preferred Stock Unit Subscription Agreements (the
"Subscription Agreement"), each dated as of _______, 2000, between the Company
and the Holders respectively named in each such Subscription Agreement.
Pursuant to the Subscription Agreement, the Company and the Holders have
agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual agreements set
forth herein, the Company and the Holders hereby agree as follows:
1. Restrictions on Transferability. None of the Restricted Securities may
be sold, assigned, transferred, pledged or otherwise disposed of, whether or not
for value, except in compliance with the terms and conditions of this Agreement.
At such time as the Restricted Securities cease to be Restricted Securities
under the terms of this Agreement, the provisions of this Agreement shall no
longer apply to the shares of the Common Stock that theretofore were Restricted
Securities.
2. Restrictive Legend.
2.1 Shares of Stock. Each certificate representing Restricted Securities
that are Preferred Shares or Common Shares shall be stamped or otherwise
imprinted with a legend substantially in the following form (in addition to any
legend required under applicable state securities laws or otherwise):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), NOR UNDER ANY STATE SECURITIES LAW AND
SUCH SECURITIES MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION STATEMENT
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WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAW OR (2) THE COMPANY RECEIVES AN OPINION OF
COUNSEL TO THE COMPANY OR COUNSEL TO THE HOLDER OF SUCH SECURITIES,
WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE
COMPANY, THAT SUCH SECURITIES MAY BE PLEDGED, SOLD, ASSIGNED,
HYPOTHECATED, OR TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS.
THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
RESTRICTED AS DESCRIBED HEREIN.
THE SALE, ASSIGNMENT, TRANSFER, PLEDGE AND OTHER DISPOSITION OF THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE
INVESTORS' RIGHTS AGREEMENT (THE "INVESTORS' RIGHTS AGREEMENT"),
DATED ___________, 2000, AMONG THE COMPANY AND THE INVESTORS NAMED
THEREIN. A COPY OF THE INVESTORS' RIGHTS AGREEMENT IS ON FILE WITH
THE CORPORATE SECRETARY AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
CORPORATION. A COPY THEREOF MAY BE OBTAINED AT NO COST UPON WRITTEN
REQUEST THEREFOR MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO
THE CORPORATE SECRETARY AT THE PRINCIPAL OFFICES OF THE COMPANY.
2.2 Warrant Certificate. Each certificate representing the Warrants that
shall bear a legend substantially in the following form (in addition to any
legend required under applicable state securities laws or otherwise):
THIS WARRANT AND ANY SHARES ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), NOR UNDER ANY STATE SECURITIES LAW AND SUCH
SECURITIES MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION STATEMENT WITH
RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAW OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO
THE COMPANY OR COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH
COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT
SUCH SECURITIES MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED, OR
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT AND APPLICABLE STATE SECURITIES LAWS.
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THE TRANSFER OF THIS WARRANT AND THE SHARES ISSUABLE UPON THE
EXERCISE HEREOF ARE RESTRICTED AS DESCRIBED HEREIN.
THE SALE, ASSIGNMENT, TRANSFER, PLEDGE AND OTHER DISPOSITION OF THIS
WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
ARE RESTRICTED BY THE INVESTORS' RIGHTS AGREEMENT (THE "INVESTORS'
RIGHTS AGREEMENT"), DATED ____________, 2000, AMONG THE COMPANY AND
THE INVESTORS NAMES THEREIN. A COPY OF THE INVESTORS' RIGHTS
AGREEMENT IS ON FILE WITH THE CORPORATE SECRETARY AT THE PRINCIPAL
EXECUTIVE OFFICES OF THE COMPANY. A COPY THEREOF MAY BE OBTAINED AT
NO COST UPON WRITTEN REQUEST THEREFOR MADE BY THE HOLDER OF RECORD
OF THIS CERTIFICATE TO THE CORPORATE SECRETARY AT THE PRINCIPAL
OFFICES OF THE COMPANY.
2.3 Stop Transfer Instructions. The Holders consent to the Company's
making a notation on its records and giving instructions to any transfer agent
of the Restricted Securities in order to implement the restrictions on transfer
established in this Agreement.
3. Notice and Other Requirements of Transfer. The Holders will not sell,
assign, transfer, pledge or otherwise dispose of any Restricted Securities until
the first anniversary of the date of this Agreement (except in accordance with
Section 4 or Section 5 hereof), and thereafter the Holders will be permitted to
sell, assign, transfer, pledge or otherwise dispose of any Restricted Securities
if and only if:
a. the intended sale, assignment, transfer, pledge or other
disposition is permitted by the other provisions of this Agreement;
or
b. there is in effect a registration statement under the Securities
Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or
c. (i) the proposed sale, assignment, transfer, pledge or other
disposition is to an Affiliate, and (ii) the Affiliate transferee,
as a condition to the effectiveness of such sale, assignment,
transfer, pledge or other disposition, has executed a counterpart of
this Agreement expressly assuming the obligations of a Holder under
this Agreement; or
d. (i) the Holder has notified the Company of the proposed
disposition and has furnished the Company with a detailed statement
of the circumstances surrounding the proposed sale, pledge or other
disposition for value, including the name and address of the
intended transferee and identifying the Restricted Securities with
respect to which such rights are being assigned, and (ii) the
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intended transferee, as a condition to the effectiveness of such
disposition, has executed a counterpart of this Agreement expressly
assuming the obligations of the Holder under this Agreement; and, if
the Company requests, the Holder shall also furnish the Company with
an opinion of counsel, reasonably satisfactory to the Company, that
such intended disposition does not require registration of such
shares under the Securities Act.
4. Piggyback Registration.
4.1 Notice to Holder Required. If at any time or from time to time the
Company shall determine to register any shares of Common Stock for its own
account or the account of any person who holds securities of the Company that
are "restricted securities" under Rule 144, other than (a) a registration that
relates solely to the issue or sale, or the resale, of convertible debt
instruments of the Company or any of its subsidiaries, (b) a registration on
Form S-4 or S-8 or another form not generally available for registering the
Restricted Securities for sale to the public, or (c) any registration comprised
in whole or in substantial part of shares underlying stock options or restricted
shares issued under an incentive compensation plan that has been adopted by the
Company or its predecessor, the Company will give to each Holder notice as soon
as practicable prior to filing the registration statement and include in such
registration all the Restricted Securities specified in one or more written
requests which have been made within 15 days after receipt of such written
notice from the Company by each Holder, except as set forth in Section 4.2
4.2 Registered Public Offering Involving an Underwriting. If the
registration of shares of Common Stock is for a registered public offering
involving an underwritten offering, the Company shall so advise each Holder as a
part of the written notice given pursuant to Section 4.1. In such event, the
right of each Holder to registration pursuant to this Section shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of each Holder's Restricted Securities in the underwriting to the
extent provided herein. If any Holder proposes to distribute his securities
through such underwriting, the Holder shall (together with the Company and the
other holders of Common Stock 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 provision of Section 4.1, if the managing underwriter
determines that marketing factors require a limitation of the number of shares
to be underwritten, the managing underwriter may limit the number of Restricted
Securities to be included in the underwriting or may limit the number of
Restricted Securities to be included in such registration. The Company shall so
advise the Holders, and the number of shares of Restricted Securities and other
securities that may be included in the registration and underwriting shall be
allocated among each Holder and all other holders of Common Stock that hold
rights granted by the Company to cause shares of Common Stock held by them to be
included in such registration or underwriting, in proportion, as nearly as
practicable, to the respective amounts of Restricted Securities held by the
Holder and each other such holder that are requested to be included in the
registration or underwriting. To facilitate the allocation of shares in
accordance with the above provisions, the Company or the underwriter may round
the number of shares allocated to the Holders to the nearest one hundred shares.
If
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any Holder disapproves of the terms of any such underwriting, it may elect to
withdraw therefrom by written notice to the Company. Any Restricted Securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
5. Demand Registration
5.1 Notice of Registration. If by January 31, 2001 the Company has not
registered any shares of Common Stock and has not complied with its obligation
under Section 4.1 by giving the required timely notices to the Holders, any
Holder may thereafter demand that a registration statement be filed with the SEC
within 90 days after the date on which the Company has received such request,
subject to the provisions of this Section 5. Subject to the terms and conditions
set forth below in this Section 5.1 and Sections 5.2 through 5.4, upon the
Company's receipt from a Holder of a written request that the Company effect a
registration under the Securities Act with respect to its Restricted Securities,
the Company will, as expeditiously as possible, notify in writing all the
Holders of such request and use its diligent best efforts to effect all such
registrations (including, without limitation, the execution of an undertaking to
file post-effective amendments and appropriate qualifications and approvals
under the laws and regulations applicable to the Company of any applicable
governmental agencies and authorities, including applicable blue sky or other
state securities laws) as may be so requested and as would permit or facilitate
the sale and distribution of all or such portion of the Restricted Securities as
are specified in such request, together with any Restricted Securities held by
the other Holders who may desire to participate in such registrations; provided,
that (a) no Holder may make its request within six months following the
effectiveness of any registered public offering of Common Stock; (b) before
filing any such registration statement or any amendments or supplements thereto,
the Company will (i) furnish to the Holders of Restricted Securities which are
to be included in such registration copies of all such documents proposed to be
filed, which documents will be subject to the review of such Holders and their
counsel, and (ii) give the Holders of Restricted Securities to be included in
such registration statement and their representatives the opportunity to conduct
a reasonable investigation of the records and business of the Company and to
participate in the preparation of any such registration statement or any
amendments or supplements thereto; (c) the Company shall not be obligated to
take any action to effect such registration pursuant to Section 4.1 or this
Section 5.1 after the Company has effected one such registration pursuant to
this Section 5.1 at the request of the Holders; provided, that such registration
has been declared or ordered effective by the SEC and, if the method of
distribution is a registered public offering involving an underwritten offering,
all such shares registered thereby shall have been sold pursuant thereto; and
(d) the Company shall not be required to file any registration statement under
this Section 5.1 unless the holders of at least a majority of the issued and
outstanding shares of Series C-I Preferred Stock, Series C-II Preferred Stock
and Series C-III Preferred Stock (taken as a whole) shall have demanded in
writing that the Company file a registration statement under this Section 5.1.
With respect to any registration requested pursuant to this Section 5.1, the
Company may include in such registration any other shares of Common Stock,
subject to the restrictions set forth in Section 5.3, as to which it is
obligated to include such shares pursuant to agreements requiring such
registration.
5.2 Registration Statement. Subject to Section 5.1 above and the other
terms and
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conditions contained herein, the Company shall file a registration statement
covering the Restricted Securities so requested to be registered as soon as
practical, but in any event within 90 days after the later of (i) receipt of the
request or requests of the Holders or (ii) the date on which the Purchaser
agrees, pursuant to Section 5.3, on the terms and conditions of an underwriting,
if applicable, as evidenced by its acceptance of a letter of intent describing
such terms and conditions, whichever is later; provided, that if the Company
shall furnish to the Holders that have requested the registration a certificate
signed by the President of the Company stating that (x) in the good faith
judgment and upon unanimous consent of the Board of Directors it would have an
adverse effect on the Company and its stockholders for such registration
statement to be filed at the date filing would be required under Section 5.1 and
it is therefore desirable to defer the filing of such registration statement, in
which case the Company shall have an additional period of not more than 60 days
within which to file such registration statement (which additional period may be
extended to 90 days if such deferral will materially reduce the expenses of such
registration due to the elimination of the need for any special audits to be
performed in connection with such registration) or (y) due to circumstances not
within the Company's direct control the audit of the Company's financial
statements or of the financial statements of any entity or business acquired or
to be acquired by the Company is not complete, in which case the Company shall
have an additional period sufficient for the completion of such audit within
which to file such registration statement.
5.3 Registered Public Offering Involving an Underwriting. If the Holders
intend to distribute the Restricted Securities covered by their request under
Section 5.1 by means of an underwriting, they shall so advise the Company as a
part of their request made pursuant to Section 5.1. In such event, if so
requested in writing by the Company, the Holders shall negotiate in good faith
with a nationally recognized underwriter or underwriters selected by the Company
and reasonably satisfactory to the Holders with regard to the underwriting of
such requested registration. The right of the Holders to registration pursuant
to this Section 5.3 shall be conditioned upon participation by all Holders in
such underwriting to the extent provided herein. The Company shall (together
with all Holders proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected pursuant to this Section 5.3.
Notwithstanding any other provision of this Section 5.3, if the underwriter
advises the Company in writing with a copy to the Holders that marketing factors
require a limitation of the number of shares to be underwritten, the Company
shall so advise all Holders, and the Company will include in such registration
up to the maximum allowed by such underwriter of Restricted Securities and other
securities, as, allocated among the Holder and all other holders of Common Stock
that hold rights granted by the Company to cause shares of Common Stock held by
them to be included in such registration or underwriting, in proportion, as
nearly as practicable, to the respective amounts of Restricted Securities held
by the Holder and each other such holder that are requested to be included in
the registration or underwriting. To facilitate the allocation of shares in
accordance with the above provisions, the Company or the underwriter may round
the number of shares allocated to the Holders to the nearest one hundred shares.
If any Holder of Restricted Securities disapproves of the terms of the
underwriting, it may elect to withdraw therefrom by written notice to the
Company, the underwriter and the other Holders. In the event of any such
withdrawal, the Company will include in any such registration in lieu thereof
any additional
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shares of Restricted Securities which were requested to be included by a Holder
and which were excluded pursuant to the above-described underwriter limitation
up to the maximum set by such underwriter.
5.4 Best Efforts. The Company will use its best efforts to do any and all
other acts which may be necessary or advisable to enable each selling Holder to
dispose of the Restricted Securities being sold including, without limitation,
keeping the registration statement filed under Section 4.1 or 5.1 effective for
a period not in excess of one year and furnishing to each such seller (x) the
number of copies of the registration statement and of the exhibits and the
prospectus contained therein reasonably requested by each such Holder, and (y)
signed counterparts, addressed to each such Holder, of an opinion of the
Company's counsel and a "cold comfort" letter of the Company's independent
certified public accountants with respect to the matters customarily covered in
such documents delivered to underwriters in underwritten public offerings.
6. Nonpublic Information. Notwithstanding any other provision of this
Agreement, the Company's obligation to file a registration statement under
Section 4.1 or Section 5.1, or to cause a registration statement to become and
remain effective under either such Section, shall be suspended for a period not
to exceed 90 days (and for periods not exceeding, in the aggregate, 180 days in
any 12-month period) if there exists at the time material non-public information
relating to the Company which, in the reasonable opinion of the Company, should
not be disclosed.
7. Expenses of Registration. The Company will bear all reasonable expenses
incurred in connection with registrations pursuant to Section 4 and Section 5,
including without limitation all registration, filing and qualification fees,
printing expenses, fees and disbursements of counsel for the Company and
independent accounts for the Company and expenses of any special audits of the
Company's financial statements incidental to or required by such registration,
fees of the National Association of Securities Dealers, Inc., transfer taxes,
fees of transfer agents and registrars' fees, but the Company will not pay
underwriters' fees, discounts or commissions relating to the Restricted
Securities or any fees or expenses legal counsel for any or all of the Holders.
8. Registration Procedures. In the case of each registration effected by
the Company pursuant to this Agreement, the Company will keep each Holder (if it
participates therein) advised in writing as to the initiation of each
registration and as to the completion thereof.
9. Indemnification.
9.1 Indemnity by the Company. If the Company registers any Restricted
Securities held by the Holder under the Securities Act pursuant to Section 4 or
Section 5, the Company will indemnify and hold harmless the Holder, and each
other person, if any, who controls the Holder, against any losses, claims,
damages or liabilities, joint or several, to which the Holder, or such
controlling persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon
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any untrue statement or alleged untrue statement of any material fact contained
in any registration statement under which such Restricted Securities were
registered under the Securities Act, 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, or any violation by the Company of any rule or
regulation promulgated under the Securities Act or any state securities law
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, and will reimburse the Holder,
its officers, directors and partners, and each person controlling the Holder,
for any reasonable legal and any other expenses incurred in connection with
investigating, defending or settling any such claim, loss, damage, liability or
action, provided that the Company will not be liable in any such case to the
extent that any such claim, loss, damage or liability arises out of or is based
on any untrue statement or omission based upon written information furnished to
the Company by an instrument duly executed by the Holder specifically for use
therein.
9.2 Indemnity by the Holder. Each Holder will, if Restricted Securities
held by or issuable to the Holder are included in the securities as to which
such registration is being effected, indemnify and hold harmless the Company,
each of its directors, each officer who signs the registration statement, each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company and each underwriter within the
meaning of the Securities Act, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other document
made in writing by the Holder, or any omission (or alleged omission) by the
Holder 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, such directors, officers, partners, persons or underwriters for any
reasonable legal or any other expenses incurred by them in connection with
investigating, defending or settling any such claim, loss, damage, liability or
action, 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 such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to the Company by an instrument duly executed by the Holder specifically for use
therein; provided, that the total amount for which the Holder, its officers,
directors and partners, and any person controlling the Holder, shall be liable
under this Section 9.2 shall not in any event exceed the proceeds (net of
underwriting discounts and commissions) received by the Holder from the sale of
Restricted Securities sold by the Holder in such registration.
9.3 Notice by the Indemnified Party. Each party entitled to
indemnification under this Section 9 (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
claims as to which indemnity may be sought, and shall permit the Indemnifying
Party to assume the defense of any such claim or any litigation resulting
therefrom, provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or
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litigation, shall be approved by the Indemnified Party (whose approval shall
not be unreasonably withheld), and the Indemnified Party may participate in
such defense at such party's expense, 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 hereunder, unless such failure
resulted in actual detriment to the Indemnifying Party. 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 Party of a
release from all liability in respect of such claim or litigation.
9.4 Underwriting Agreement. Notwithstanding the foregoing, to the extent
that the provisions on indemnification contained in the underwriting agreements
entered into among the Holder, the Company and the underwriters in connection
with the underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall be controlling as
to the Restricted Securities included in the public offering; provided, that if,
as a result of this Section 9.4, the Holder, and any person controlling the
Holder, are held liable for an amount which exceeds the aggregate proceeds
received by the Holder from the sale of Restricted Securities included in a
registration, as provided in Section 9.2, pursuant to such underwriting
agreement (the "Excess Liability"), the Company shall reimburse any such Holders
for such Excess Liability.
9.5 Contribution. If the indemnification provided for in this Section is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party thereunder, 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
hand in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relevant fault of the Indemnifying Party and 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 to state a
material fact relates to information supplied by the Indemnifying Party or by
the Indemnified Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, the amount that the Holder shall be obligated to
contribute pursuant to this Section 9.5 shall be limited to an amount equal to
the proceeds to the Holder of the Restricted Securities sold pursuant to the
registration statement which gives rise to such obligation to contribute (less
the aggregate amount of any damages which the Holder has otherwise been required
to pay in respect of such loss, claim, damage, liability or action or any
substantially similar loss, claim, damage, liability or action arising from the
sale of such Restricted Securities).
9.6 Survival of Indemnity. The indemnification and contribution provided
by this Section shall be a continuing right to indemnification and shall survive
the registration and sale
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of any securities by any person entitled to indemnification under this
Agreement.
10. Lockup Agreement. In consideration for the Company's performance of
its obligations under this Agreement, the Holder will, in connection with any
registration of any Restricted Securities in an underwritten offering, at the
request of the Company or the underwriters managing any underwritten offering of
the Company's securities, agree not to sell, make any short sale of, loan, grant
any option for the purchase of, or otherwise dispose of any Restricted
Securities (other than those included in the registration) without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed 90 days) from the effective date of such
registration as the Company and the underwriters may specify, so long as
stockholders holding more than one percent (1%) of the Common Stock and all
officers and directors of the Company are bound by a comparable obligation.
11. Holders' Cooperation.
11.1 Information Regarding Holders. Each Holder shall promptly furnish to
the Company such information regarding the Holder and the distribution proposed
by the Holder as the Company may request in writing and as shall be required in
connection with any registration referred to herein.
11.2 Obligations of the Holders. The Holders will not (until further
notice by the Company) effect sales thereof (or deliver a prospectus to any
purchaser) after receipt of telegraphic or written notice from the Company to
suspend sales to permit the Company to correct or update a registration
statement or prospectus. At the end of the period during which the Company is
obligated to keep any registration statement filed under Section 4 or Section 5
current and effective as required by applicable law, the Holders shall
discontinue sales of shares pursuant to such registration statement upon receipt
of notice from the Company of its intention to remove from registration the
shares of Restricted Securities covered by such registration statement that
remain unsold, and the Holders shall notify the Company of the number of such
shares registered that remain unsold immediately upon receipt of such notice
from the Company.
12. Rule 144. With a view to making available to the Holders the benefits
of certain rules and regulations of the SEC which may permit the sale of the
Restricted Securities to the public without registration, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144; and
(b) use its best efforts to 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.
13. Representations and Warranties of the Company. The Company represents
and warrants to the Holders as follows:
13.1 The execution, delivery and performance of this Agreement by the
Company have
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been duly authorized by all requisite corporate action and will not violate any
provision of law, any order of any court or other agency of government, the
Certificate of Incorporation or Bylaws of the Company or any provision of any
indenture, agreement or other instrument to which it or any of its properties or
assets is bound, conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such indenture, agreement
or other instrument or result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any of the properties or assets of
the Company.
13.2 This Agreement has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to (i) applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and moratorium laws and other
laws of general application affecting enforcement of creditors' rights generally
and (ii) the availability of equitable remedies as such remedies may be limited
by equitable principles of general applicability (regardless of whether
enforcement is sought in a proceeding in equity or at law).
14. Definitions. As used in this Agreement, the following terms shall have
the following meanings:
a. "Affiliate" shall have the meaning given to it under Rule 405 of
the Securities Act.
b. "Commission" shall mean the U. S. Securities and Exchange
Commission, or any other federal agency at the time administering
the Securities Act.
c. "Common Stock" shall mean shares of the Company's Common Stock,
par value $0.01 per share.
d. "Common Stock Warrants" shall mean warrants to purchase shares of
the Common Stock.
e. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar United States statute and the rules and
regulations thereunder, all as the same shall be in effect at the
time.
f. "Holder" shall mean each person who executes this Agreement and
any other person who holds Restricted Securities and who has assumed
the obligations of the Holder under this Agreement pursuant to
Section 3(c).
g. "Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration
or ordering of the effectiveness of such registration statement, and
compliance with applicable state securities laws of such states in
which any of the Holders notifies the Company of his intention to
offer Restricted Securities.
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h. "Restricted Securities" shall mean the shares of Common Stock
underlying the Preferred Stock, the Warrants and the shares of
Common Stock issuable upon due exercise of the Warrants, in each
case only to the extent the same have not been sold to the public.
As to any particular Restricted Securities, such securities shall
cease to be Restricted Securities when (i) a registration statement
with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have
been disposed of under such registration statement, (ii) such
securities shall have become eligible for resale pursuant to Rule
144(k) and any restrictive legend on certificates representing such
securities shall have been removed, (iii) such securities shall have
been otherwise transferred or disposed of, and (x) new certificates
therefor not bearing a legend restricting further transfer shall
have been delivered by the Company, and (y) subsequent transfer or
disposition of them shall not require their registration or
qualification under the Securities Act or any similar state law then
in force or compliance with Rule 144, or (iv) such securities shall
have ceased to be outstanding. Notwithstanding the foregoing,
Restricted Securities shall not include otherwise Restricted
Securities (i) sold by a person in a transaction in which his rights
under this Agreement are not properly assigned; or (ii) (A) sold to
or through a broker or dealer or underwriter in a public
distribution or a public securities transaction, or (B) sold in a
transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof if all
transfer restrictions, and restrictive legends with respect thereto,
if any, are removed upon the consummation of such sale.
i. "Rule 144" shall mean Rule 144 under the Securities Act or any
successor or similar rule as may be enacted by the Commission from
time to time.
j. "Rule 145" shall mean Rule 145 under the Securities Act or any
successor or similar rule as may be enacted by the Commission from
time to time.
k. "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar United States statute and the rules and
regulations thereunder, all as the same shall be in effect at the
time.
15. Miscellaneous.
15.1 Amendments. This Agreement may be amended only by a written
instrument executed by the Holders and the Company.
15.2 Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute a single instrument.
15.3 Notices, Etc. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
given personally, sent by facsimile transmission or sent by prepaid air courier
or certified or express mail, postage prepaid.
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Any such notice shall be deemed to have been given (a) when received, if
delivered in person, sent by facsimile transmission and confirmed in writing
within three business days thereafter or sent by prepaid air courier or (b)
three business days following the mailing thereof, if mailed by certified United
States first class mail, postage prepaid, in any such case if to the Company, at
its address set forth above, and, if to the Holder, to the address of the Holder
set forth in Schedule I to the Subscription Agreement (or to such other address
or addresses as a party may have advised the other in the manner provided in
this Section 15.3).
15.4 Assignability. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Neither this Agreement nor any
rights, duties or obligations hereunder shall be assigned by any party hereto
without the prior written consent of the other parties hereto, except that
vested rights to receive payment or to initiate legal action with respect to
causes of action that have accrued hereunder shall be assignable by devise,
descent or operation of law.
15.5 Severability. If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
15.6 Governing Law; Venue. This Agreement shall be governed by and
construed under the laws of the State of New York without regard to principles
of conflict of law. Each of the parties hereby (i) irrevocably consents and
agrees that any legal or equitable action or proceeding arising under or in
connection with this Agreement shall be brought exclusively in the Federal or
state courts sitting in New York, New York, and any court to which an appeal may
be taken in any such litigation, and (ii) by execution and delivery of this
Agreement, irrevocably submits to and accepts, with respect to any such action
or proceeding, for itself and in respect of its properties and assets, generally
and unconditionally, the jurisdiction of the aforesaid courts, and irrevocably
waives any and all rights such party may now or hereafter have to object to such
jurisdiction.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
THE COMPANY:
XX0.XXX INC.
By:
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Name:
Title:
THE HOLDERS:
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