Investor Rights Agreement
This Investor Rights Agreement (this "Agreement") is made and entered into
as of _________, 199_ by and among THE RATTLESNAKE HOLDING COMPANY, INC., a
Delaware corporation (the "Company"), and the stockholders who execute a copy of
this Agreement (individually, an "Investor, and collectively, the "Investors").
R E C I T A L S
A. The Investors have agreed to purchase from the Company, and the Company
has agreed to sell to the Investors, Units (the "Units) consisting of shares of
Series B Preferred Stock per value $.01, of the Company ("Series B Preferred
Stock") which are convertible into (the "Conversion Shares") Common Stock, per
value $.001 of the Company and warrants (the "Warrants") exercisable for the
purchase of Common Stock of the Company (the "Warrant Shares") on the terms and
conditions set forth in that certain Confidential Private Placement Memorandum,
dated October 27, 1998 (the "Memorandum");
B. Commonwealth Associates ("Commonwealth") named herein as an "Investor"
has received compensation in connection with the offering contemplated by the
Memorandum, including but not limited to, Units, Common Stock and Warrants to
purchase Common Stock of the Company and is entitled to participate in the
rights provided hereby. (The Common Stock issued to Commonwealth, and issuable
upon conversion of its Preferred Shares and exercise of Warrants held by it, are
referred to collectively as the "Commonwealth Shares").
C. The Conversion Shares, the Warrant Shares and the Commonwealth Shares
are referred to herein collectively as the "Registrable Securities".
D. The Memorandum provides that the Investors shall be granted certain
information registration rights as more fully set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. REGISTRATION RIGHTS.
1.1 Definitions. For purposes of this Section 1:
(a) Registration. The terms "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration or ordering
of effectiveness of such registration statement.
(b) Registrable Securities. The term "Registrable Securities" shall have
the meaning set forth in recital clause C hereof. Notwithstanding the foregoing,
"Registrable Securities" shall exclude any Registrable Securities sold by a
person in a transaction in which rights under this Section 1 are not assigned in
accordance with this Agreement or any Registrable Securities sold in a public
offering, whether sold pursuant to Rule 144 promulgated under the Securities
Act, or in a registered offering, or otherwise.
(c) Registrable Securities Then Outstanding. The number of shares of
"Registrable Securities then outstanding" shall mean the number of shares of
Common Stock of the Company that are Registrable Securities and are then issued
and outstanding.
(d) Holder. For purposes of this Section 1, the term "Holder" means: (1)
any person owning of record Registrable Securities that have not been sold to
the public or pursuant to Rule 144 promulgated under the Securities Act, or (2)
any permitted assignee of record of such Registrable Securities to whom rights
under this Section 1 have been duly assigned in accordance with this Agreement.
(e) SEC. The term "SEC" or "Commission" means the U.S. Securities and
Exchange Commission.
1.2 Mandatory Registration.
(a) Filing. The Company shall file a registration statement under the
Securities Act covering the registration of Registrable Securities within six
(6) months from the initial closing of the sale of the Units, and use its best
efforts to effect the registration within nine (9) months after the Original
Issue Date, under the Securities Act, of all Registrable Securities subject only
to the limitations of this Section 1.2.
(b) Underwriting. If the Holders of a majority of the Registrable
Securities ("Initiating Holders") intend to distribute the Registrable
Securities by means of an underwriting, then they shall so advise the Company.
In such event, the right of any Holder to include his Registrable Securities in
such registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall enter
into an underwriting agreement in customary form with the managing underwriter
or underwriters selected for such underwriting by the Holders of a majority of
the Registrable Securities being registered and reasonably acceptable to the
Company. Notwithstanding any other provision of this Section 1.2, if the
underwriter(s) advise(s) the Company in writing that marketing factors require a
limitation of the number of securities to be underwritten then the Company shall
so advise all Holders of Registrable Securities which would otherwise be
registered and underwritten pursuant hereto, and the number of Registrable
Securities that may be included in the underwriting shall be reduced as required
by the underwriter(s) and allocated among the Holders of Registrable Securities
on a pro rata basis according to the number of Registrable Securities then
outstanding held by each Holder requesting registration (including the
initiating Holders); provided, however, that the number of shares of Registrable
Securities to be included in such underwriting and registration shall not be
reduced unless all other securities of the Company other than Registrable
Securities are first entirely excluded from the underwriting and registration.
Any Registrable Securities excluded and withdrawn from such underwriting shall
be withdrawn from the registration.
(c) One Mandatory Registration. The Company shall be obligated to effect
only one (1) such registration pursuant to this Section 1.2.
(d) Expenses. All expenses incurred in connection with any registration
pursuant to this Section 1.2, including without limitation all federal and "blue
sky" registration, filing and qualification fees, printer's and accounting fees,
and fees and disbursements of counsel for the Company (but excluding
underwriters' discounts and commissions relating to shares sold by the Holders
and legal fees of counsel for the Holders), shall be borne by the Company. Each
Holder participating in a registration pursuant to this Section 1.2 shall bear
such Holder's proportionate share (based on the total number of shares sold in
such registration other than for the account of the Company) of all discounts,
commissions or other amounts payable to underwriter(s) or brokers, and the
Holders' legal fees, in connection with such offering by the Holders.
Notwithstanding the foregoing, the Company shall not be required to pay for any
expenses of any registration proceeding begun pursuant to this Section 1.2 if
the registration request is subsequently withdrawn at the request of the Holders
of a majority of the Registrable Securities to be registered, unless the Holders
of a majority of the Registrable Securities then outstanding agree that such
registration constitutes the use by the Holders of the one (1) demand
registration pursuant to this Section 1.2 (in which case such registration shall
also constitute the use by all Holders of Registrable Securities of the one (l)
such demand registration); provided, further, however, that if at the time of
such withdrawal, the Holders have learned of a material adverse change in the
condition, business, or prospects of the Company not known to the Holders at the
time of their request for such registration and have withdrawn their request for
registration with reasonable promptness after learning of such material adverse
change, then the Holders shall not be required to pay any of such expenses and
such registration shall not constitute the use of the one (1) demand
registration pursuant to this Section 1.2.
1.3 Piggyback Registrations. The Company shall notify all Holders of
Registrable Securities in writing at least thirty (30) days prior to filing any
registration statement under the Securities Act for purposes of effecting a
public offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to any registration
under Section 1.2 of this Agreement or to any employee benefit plan, acquisition
or a corporate reorganization) and will afford each such Holder an opportunity
to include in such registration statement all or any part of the Registrable
Securities then held by such Holder that are not currently included in another
registration statement. Each Holder desiring to include in any such registration
statement all or any part of the Registrable Securities held by such Holder
shall within twenty (20) days after receipt of the above-described notice from
the Company, so notify the Company in writing, and in such notice shall inform
the Company of the number of Registrable Securities such Holder wishes to
include in such registration statement. If a Holder decides not to include all
of its Registrable Securities in any registration statement thereafter filed by
the Company, such Holder shall nevertheless continue to have the right to
include any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth herein.
(a) Underwriting. If a registration statement under which the Company gives
notice under this Section 1.3 is for an underwritten offering, then the Company
shall so advise the Holders of Registrable Securities. In such event, the right
of any such Holder's Registrable Securities to be included in a registration
pursuant to this Section 1.3 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their Registrable Securities through such
underwriting shall enter into an underwriting agreement in customary form with
the managing underwriter or underwriters selected for such underwriting
(including a market stand-off agreement of up to 180 days if required by such
underwriter or underwriters). Notwithstanding any other provision of this
Agreement, if the managing underwriter(s) determine(s) in good faith that
marketing factors require a limitation of the number of shares to be
underwritten, then the managing underwriter(s) may exclude shares from the
registration and the underwriting, and the number of shares that may be included
in the registration and the underwriting shall be allocated, first to the
Company, and second, to each of the Holders requesting inclusion of their
Registrable Securities in such registration statement on a pro rata basis based
on the total number of Registrable Securities then held by each such Holder. If
any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company and the
underwriter(s), delivered at least ten (10) business days prior to the effective
date of the registration statement. Any Registrable Securities excluded or
withdrawn from such underwriting shall be excluded and withdrawn from the
registration. For any Holder that is a partnership, the Holder and the partners
and retired partners of such Holder, or the estates and family members of any
such partners and retired partners and any trusts for the benefit of any of the
foregoing persons, and for any Holder that is a corporation, the Holder and all
corporations that are affiliates of such Holder, shall be deemed to be a single
"Holder," and any pro rata reduction with respect to such "Holder" shall be
based upon the aggregate amount of shares carrying registration rights owned by
all entities and individuals included in such "Holder," as defined in this
sentence.
(b) Expenses. All expenses incurred in connection with a registration
pursuant to this Section 1.3 (excluding underwriters' and brokers' discounts and
commissions relating to shares sold by the Holders and legal fees of counsel for
the Holders), including, without limitation all federal and "blue sky"
registration, filing and qualification fees, printers' and accounting fees, and
fees and disbursements of counsel for the Company, shall be borne by the
Company.
(c) Not Mandatory Registration. Registration pursuant to this Section 1.3
shall not be deemed to be a mandatory registration as described in Section 1.2
above. Except as otherwise provided herein, there shall be no limit on the
number of times the Holders may request registration of Registrable Securities
under this Section 1.3.
1.4 Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities under this Agreement the Company
shall, as expeditiously as reasonably possible:
(a) Registration Statement. Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become effective, provided, however,
that the Company shall not be required to keep any such registration statement
effective for more than ninety (90) days.
(b) Amendments and Supplements. Prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement.
(c) Prospectuses. Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them that are included in such registration.
(d) Blue Sky. Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business.
(e) Underwriting. In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notification. Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
1.5 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 1.2, 1.3 or
1.4 that the selling Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them, and the intended
method of disposition of such securities as shall be required to timely effect
the Registration of their Registrable Securities, by way of a written
questionnaire fully completed and signed by or on behalf of the selling Holders.
1.6 Indemnification. In the event any Registrable Securities are included
in a registration statement under Sections 1.2, 1.3 or 1.4:
(a) By the Company. To the extent permitted by law; the Company will
indemnify and hold harmless each Holder, the partners, officers and directors of
each Holder, any underwriter (as determined in the Securities Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Securities Act or the Securities Exchange Act of 1934, as
amended, (the "1934 Act"), against any losses, claims, damages, or liabilities
(joint or several) to which they may become subject under the Securities Act,
the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation"):
(i) any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto;
(ii) 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 (iii) any violation or alleged violation by the Company of the
Securities Act, the 1934 Act, any federal or state securities law or any rule or
regulation promulgated under the Securities Act, the 1934 Act or any federal or
state securities law in connection with the offering covered by such
registration statement; and the Company will reimburse each such Holder,
partner, officer or director, underwriter or controlling person for any legal or
other expenses reasonably incurred by them, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 1.7(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by or on behalf of such
Holder, partner, officer, director, underwriter or controlling person of such
Holder.
(b) By Selling Holders. To the extent permitted by law, each selling Holder
will indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter
and any other Holder selling securities under such registration statement or any
of such other Holder's partners, directors or officers or any person who
controls such Holder within the meaning of the Securities Act or the 1934 Act,
against any losses, claims, damages or liabilities (joint or several) to which
the Company or any such director, officer, controlling person, underwriter or
other such Holder, partner or director, officer or controlling person of such
other Holder may become subject under the Securities Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by or on
behalf of such Holder expressly for use in connection with such registration;
and each such Holder will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, controlling person,
underwriter or other Holder, partner, officer, director or controlling person of
such other Holder in connection with investigating or defending any such loss,
claim, damage, liability or action: provided, however, that the indemnity
agreement contained in this Section 1.7(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; and provided, further, that the total amounts
payable in indemnity by a Holder under this Section 1.7(b) in respect of any
Violation shall not exceed the gross proceeds received by such Holder in the
registered offering out of which such Violation arises.
(c) Notice. Promptly after receipt by an indemnified party under this
Section 1.7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.7, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or likely conflict of interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall relieve such indemnifying party of
liability to the indemnified party under this Section 1.7 to the extent the
indemnifying party is prejudiced as a result thereof, but the omission so to
deliver written notice to the indemnified party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 1.7.
(d) Defect Eliminated in Final Prospectus. The foregoing indemnity
agreements of the Company and Holders are subject to the condition that, insofar
as they relate to any Violation made in a preliminary prospectus but eliminated
or remedied in the amended prospectus on file with the SEC at the time the
registration statement in question becomes effective or the amended prospectus
filed with the SEC pursuant to SEC Rule 424(b) (the "Final Prospectus"), such
indemnity agreement shall not inure to the benefit of any person if a copy of
the Final Prospectus was timely furnished to the indemnified party and was not
furnished to the person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the Securities Act.
(e) Contribution. In order to provide for just and equitable contribution
to joint liability under the Securities Act in any case in which either (i) any
Holder exercising rights under this Agreement, or any controlling person of any
such Holder, makes a claim for indemnification pursuant to this Section 1.7 but
it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 1.7 provides
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any such selling Holder or any such controlling
person in circumstances for which indemnification is provided under this
Section 1.7; then, and in each such case, the Company and such Holder will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportion so that such
Holder is responsible for the portion represented by the percentage that the
public offering price of its Registrable Securities offered by and sold under
the registration statement bears to the public offering price of all securities
offered by and sold under such registration statement, and the Company and other
selling Holders are responsible for the remaining portion; provided, however,
that, in any such case: (A) no such Holder will be required to contribute any
amount in excess of the public offering price of all such Registrable Securities
offered and sold by such Holder pursuant to such registration statement; and (B)
no person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to contribution from
any person or entity who was not guilty of such fraudulent misrepresentation.
(f) Survival. The obligations of the Company and Holders under this Section
1.7 shall survive until the third anniversary of the completion of any offering
of Registrable Securities in a registration statement, regardless of the
expiration of any statutes of limitation or extensions of such statutes.
1.7. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the SEC that may at any time permit the sale of
shares of Common Stock to the public without registration, after such time as a
public market exists for the Common Stock of the Company, the Company agrees to:
(a) Use its best efforts to facilitate the sale of shares of Common Stock
to the public, without registration under the Securities Act, pursuant to
Rule 144 under the Securities Act, provided that this shall not require the
Company to file reports under the Securities Act or the 1934 Act at any time
prior to the Company's being otherwise required to file such reports;
(b) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act at all times after
ninety (90) days after the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities to the
general public;
(c) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the 1934 Act (at
any time after it has become subject to such reporting requirements);
(d) During any period in which the Company is not subject to Section 13 or
15(d) of the 1934 Act, make available the information required to be provided by
Rule 144A(d)(4);
(e) So long as a Holder owns any shares of Common Stock which constitute
restricted securities under Rule 144, 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 Securities Act and the 1934
Act, a copy of the most recent annual or quarterly report of the Company, and
such other reports and documents so filed 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.
1.8 Termination of the Company's Obligations. The Company shall have no
obligations pursuant to Section 1 with respect to any Registrable Securities
proposed to be sold by a Holder in a registration pursuant to Section 1.2, 1.3
or 1.4 more than five (5) years after the date of this Agreement, or, if, in the
opinion of counsel to the Company, such Registrable Securities proposed to be
sold by a Holder may then be sold under Rule 144 in one transaction without
exceeding the volume limitations thereunder.
2. RESTRICTIONS ON TRANSFER.
2.1 Restrictions on Transferability. For purposes of this Section 2, the
term "Transfer" shall mean a sale, assignment, encumbrance, gift, pledge,
hypothecation or other disposition of the Shares or other any interest therein
and the term "Affiliate" shall mean, with respect to any person or entity,
another person or entity that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with
such person or entity. The Series B Preferred Stock or Conversion Shares and
Registrable Securities shall not be Transferred except upon compliance with the
provisions of the Securities Act, the Certificate of Incorporation of the
Company (the "Certificate") and this Agreement, and any attempted Transfer of
any of the same other than in accordance with the terms hereof and the
Certificate is void ab initio and transfers no right, title or interest in or to
such Securities, whether now owned or hereafter acquired, to the purported
transferee, buyer, donee, assignee or encumbrance holder. Each party to this
Agreement will cause any proposed transferee (other than a transferee of
securities sold pursuant to a registration or pursuant to Rule 144 under the
Securities Act) of such securities to agree to take and hold such securities
subject to the provisions and upon the conditions specified in this Agreement
and in the Certificate.
2.2 Restrictive Legends. Each certificate representing (i) the Preferred
Shares or (ii) any Registrable Securities, that is held by a party hereto shall
be stamped or otherwise imprinted with legends substantially in the following
form (in addition to any legend required under applicable state securities
laws):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). THE SECURITIES MAY NOT BE SOLD OR
OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT IN CONJUNCTION WITH AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE ACT, OR IN
COMPLIANCE WITH RULE 144 OR PURSUANT TO ANOTHER EXEMPTION THEREFROM. THE
SECURITIES ARE ALSO SUBJECT TO PROVISIONS OF THE CERTIFICATE OF INCORPORATION
AND AN INVESTOR RIGHTS AGREEMENT, WHICH CONTAIN RESTRICTIONS ON TRANSFER AND
CERTAIN VOTING AGREEMENTS. COPIES OF THE CERTIFICATE AND THE STOCKHOLDERS
AGREEMENT MAY BE OBTAINED FROM THE SECRETARY OF THE COMPANY.
2.3 Notice of Proposed Transfers; Securities Law Compliance. Prior to any
proposed Transfer of any Preferred Shares or Registrable Securities, unless
there is in effect a registration statement under the Securities Act covering
the proposed Transfer, the Holder thereof shall give written notice to the
Company of such Holder's intention to effect such Transfer. Each such notice
shall describe the manner and circumstances of the proposed Transfer in
sufficient detail, and shall be accompanied by either (i)a written opinion of
legal counsel who shall be reasonably satisfactory to the Company addressed to
the Company and reasonably satisfactory in form and substance to the Company's
counsel, to the effect that the proposed Transfer of such securities may be
effected without registration under the Securities Act, (ii) a "no action"
letter from the staff of the SEC to the effect that the distribution of such
securities without registration will not result in recommendation by the staff
of the SEC that action be taken with respect thereto, or (iii) such other
showing that may be reasonably satisfactory to legal counsel to the Company,
whereupon the Holder of such securities shall be entitled to Transfer such
securities in accordance with the terms of the notice delivered by the Holder to
the Company. Notwithstanding the foregoing, the requirements of clauses (i),
(ii), or (iii) above need not be satisfied with respect to the following
transactions: (A) transactions in compliance with Rule 144 so long as the
Company is furnished with satisfactory evidence of compliance with such Rule;
(B) Transfers by a Holder which is a partnership to a general partner, limited
partner, employee or affiliate of such partnership or a retired partner of such
partnership who retires after the date hereof, or to the estate of any such
partner or retired partner; (C) Transfers by a Holder which is a corporation to
any wholly-owned subsidiary or parent of such corporation, or to any
corporation, entity or other person which is an Affiliate of any such Holder.
3. ASSIGNMENT AND AMENDMENT.
3.1 Assignment. Notwithstanding anything herein to the contrary, the
registration rights of the Investor under Section 1 hereof may be assigned to
any Holder; provided, however, that no party may be assigned any of the
foregoing rights unless the Company is given written notice by the assigning
party at the time of such assignment stating the name and address of the
assignee and identifying the securities of the Company as to which the rights in
question are being assigned; and provided further that any such assignee shall
receive such assigned rights subject to all the terms and conditions of this
Agreement, including without limitation the provisions of this Section 3.
3.2 Amendment of Rights. Any provision of this Agreement may be amended and
the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and the Holders of majority of the Registrable Securities
then outstanding. Any amendment or waiver effected in accordance with this
Section 3.2 shall be binding upon the Investor, each Holder, each permitted
successor or assignee of such Investor or Holder and the Company.
4. GENERAL PROVISIONS.
4.1. Notices. Except as may be otherwise provided herein, all notices,
requests, waivers and other communications made pursuant to this Agreement shall
be in writing and shall be conclusively deemed to have been duly given (a) when
hand delivered to the other party; (b) when received when sent by facsimile at
the address and number set forth on Exhibit A hereto; (c) three business days
after deposit in the U.S. mail with first class or certified mail receipt
requested postage prepaid and addressed to the relevant party as set forth on
the signature page hereto; or (d) the next business day after deposit with a
national overnight delivery service, postage prepaid, addressed to the parties
as set forth below with next-business-day delivery guaranteed, provided that the
sending party receives a confirmation of delivery from the delivery service
provider.
Each person making a communication hereunder by facsimile shall promptly
confirm by telephone to the person to whom such communication was addressed each
communication made by it by facsimile pursuant hereto but the absence of such
confirmation shall not affect the validity of any such communication. A party
may change or supplement the addresses given above, or designate additional
addresses, for purposes of this Section 4.1 by giving the other party written
notice of the new address in the manner set forth above.
4.2 Entire Agreement. This Agreement, together with all the Exhibits
hereto, constitutes and contains the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings, duties or
obligations between the parties respecting the subject matter hereof.
4.3 Governing Law. This Agreement shall be governed by and construed
exclusively in accordance with the internal laws of the State of New York,
excluding that body of law relating to conflict of laws and choice of law except
as to corporate matters governed by the laws of the State of Delaware.
4.4 Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, then such provision(s) shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as if
such provision(s) were so excluded and shall be enforceable in accordance with
its terms.
4.5 Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
permitted successors and assigns, any rights or remedies under or by reason of
this Agreement.
4.6 Successors and Assigns. Subject to the provisions of Section 3, the
provisions of this Agreement shall inure to the benefit of, and shall be binding
upon, the successors and permitted assigns of the parties hereto.
4.7 Captions. The captions to sections of this Agreement have been inserted
for identification and reference purposes only and shall not be used to construe
or interpret this Agreement.
4.8 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
4.9 Adjustments for Stock Splits, Etc. Wherever in this Agreement there is
a reference to a specific number of Preferred Shares or Common Stock of the
Company, then, upon the occurrence of any subdivision, combination or stock
dividend of Preferred Shares or Common Stock, the specific number of shares so
referenced in this Agreement shall automatically be proportionally adjusted to
reflect the affect on the outstanding shares of such class or series of stock by
such subdivision, combination or stock dividend.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written
INVESTOR THE RATTLESNAKE HOLDING CO. INC.
----------------------- ---------------------------
By: By:
Name: Name:
Title:
Address: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000 Address: _______________________
