Exhibit 10.46
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
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This REGISTRATION RIGHTS AGREEMENT, dated as of June 17, 2003 (as the same
from time to time may be amended, supplemented or waived, the "Agreement"), by
and between Nobel Learning Communities, Inc., a Delaware corporation (the
"Company") and the parties set forth on Schedule A attached hereto (the
"Investors").
BACKGROUND:
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WHEREAS, the parties hereto are parties to a Series E Convertible Preferred
Stock Purchase Agreement, dated the date hereof (the "Purchase Agreement"),
pursuant to which the Investors purchased shares of Series E Convertible
Preferred Stock from the Company (together with any additional shares that may
be issued to the holders thereof as dividends, the "Preferred Shares"); and
WHEREAS, one of the conditions to the consummation of the transactions
contemplated by the Purchase Agreement is the execution and delivery of this
Agreement to provide for registration rights for the Preferred Shares purchased
by the Investors.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and the purchase of the Preferred Shares by the Investors, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"Common Stock" shall mean Common Stock, $0.001 par value, of the Company,
as constituted as of the date of this Agreement.
"Conversion Shares" shall mean shares of Common Stock issued upon
conversion of the Preferred Shares.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
or any similar successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Registration Expenses" shall mean the expenses so described in Section 7.
"Restricted Stock" shall mean the Conversion Shares, excluding (a) shares
which have been registered under the Securities Act pursuant to an effective
registration statement filed thereunder and disposed of in accordance with the
registration statement covering them, (b)
shares which have been publicly sold pursuant to Rule 144 under the Securities
Act, or (c) shares which are eligible to be publicly sold in a single
transaction under paragraph (k) of Rule 144.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in Section 7.
2. Restrictive Legend. Each certificate representing Preferred Shares or
Conversion Shares shall, except as otherwise provided in this Section 2 or in
Section 3, be stamped or otherwise imprinted with a legend substantially in the
following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS
BEEN REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE."
A certificate shall not bear such legend if in the written opinion of counsel
satisfactory to the Company, the securities being sold thereby may be publicly
sold without registration under the Securities Act.
3. Notice of Proposed Transfer. Prior to any proposed transfer of any
Preferred Shares or Conversion Shares (other than under the circumstances
described in Sections 4 or 5), the holder thereof shall give written notice to
the Company of its intention to effect such transfer. Each such notice shall
describe the manner of the proposed transfer and, if requested by the Company,
shall be accompanied by an opinion of counsel satisfactory to the Company to the
effect that the proposed transfer may be effected without registration under the
Securities Act, whereupon the holder thereof shall be entitled to transfer such
stock in accordance with the terms of its notice. Each certificate for Preferred
Shares or Conversion Shares transferred as above provided shall bear the legend
set forth in Section 2, except that such certificate shall not bear such legend
if the opinion of counsel referred to above is to the effect that the transferee
and any subsequent transferee would be entitled to transfer such securities in a
public sale without registration under the Securities Act. The restrictions
provided for in this Section 3 shall not apply to securities which are not
required to bear the legend prescribed by Section 2 in accordance with the
provisions of that Section.
4. Required Registration.
(a) Subject to the limitation expressed in Section 5(b), at any time
after the first anniversary of the date of this Agreement, the holders of
Restricted Stock constituting at least 50% of the total shares of Restricted
Stock then outstanding may request the Company to register under the Securities
Act all or any portion of the shares of Restricted Stock held by such requesting
holder or holders for sale in the manner specified in such notice, provided that
the shares of Restricted Stock for which registration has been requested shall
constitute at least 50% of the total shares of Restricted Stock originally
issued if such holder or holders shall request the registration of less than all
shares of Restricted Stock then held by such holder or holders. For
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purposes of this Section 4 and Sections 5, 12(a) and 12(d), the term "Restricted
Stock," shall be deemed to include the number of shares of Restricted Stock
which would be issuable to a holder of Preferred Shares upon conversion of all
Preferred Shares held by such holder at such time, provided, however, that the
only securities which the Company shall be required to register pursuant hereto
shall be shares of Common Stock, and provided further, however, that, in any
underwritten public offering contemplated by this Section 4 or Section 5, the
holders of Preferred Shares shall be entitled to sell such Preferred Shares to
the underwriters for conversion and sale of the shares of Common Stock issued
upon conversion thereof. Notwithstanding anything to the contrary contained
herein, no request may be made under this Section 4 within 120 days after the
effective date of a registration statement filed by the Company covering a firm
commitment underwritten public offering in which the holders of Restricted Stock
shall have been entitled to join pursuant to Sections 5 and in which there shall
have been effectively registered all shares of Restricted Stock as to which
registration shall have been requested. The rights provided in this Section 4
may not be exercised more than once in any twelve (12) month period.
(b) Following receipt of any notice under this Section 4, the Company
shall immediately notify all holders of Restricted Stock from whom notice has
not been received and shall use its best efforts to register under the
Securities Act, for public sale in accordance with the method of disposition
specified in such notice from requesting holders, the number of shares of
Restricted Stock specified in such notice (and in all notices received by the
Company from other holders within 30 days after the giving of such notice by the
Company). If such method of disposition shall be an underwritten public
offering, the holders of a majority of the shares of Restricted Stock to be sold
in such offering may designate the managing underwriter of such offering,
subject to the approval of the Company, which approval shall not be unreasonably
withheld or delayed. The Company shall not be obligated to register Restricted
Stock pursuant to this Section 4 on more than two occasions (for both sections)
(at least one of the two occasions can be for a "shelf registration"); provided,
however, that such obligation shall be deemed satisfied only when a registration
statement covering all shares of Restricted Stock specified in notices received
as aforesaid, for sale in accordance with the method of disposition specified by
the requesting holders, shall have become effective and, if such method of
disposition is a firm commitment underwritten public offering, 75% of all such
shares shall have been sold pursuant thereto.
(c) The Company may include in any registration requested pursuant to
this Section 4 hereof any shares of Common Stock for sale for its own account or
for the account of any other person entitled to "piggy-back" or "incidental
rights" as of the date hereof , provided that such inclusion shall not affect
the number of Restricted Stock that can be sold in the related offering. In
connection with an underwritten offering, if the managing underwriter advises
the Company in writing that in its opinion the number of Restricted Stock
requested by the holders of Restricted Stock to be registered exceeds the number
which can be sold in such offering, the Company shall include in such
registration statement the number of Restricted Stock that, in the opinion of
the managing underwriter, can be sold as follows: (i) first, the Restricted
Stock requested to be registered, pro rata among the holders of Restricted Stock
that have requested their Restricted Stock to be registered, (ii) second, Common
Stock requested to be registered by holders of existing registration rights on
the date hereof and (iv) third, any other Common Stock requested to be included
in such registration.
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5. Incidental Registration.
(a) If the Company at any time (other than pursuant to Section 4)
proposes to register any of its securities under the Securities Act for sale to
the public, whether for its own account or for the account of other security
holders or both (except with respect to registration statements on Forms X-0,
X-0 or another form not available for registering the Restricted Stock for sale
to the public), each such time it will give written notice to all holders of
outstanding Restricted Stock of its intention so to do. Upon the written request
of any such holder, received by the Company within 30 days after the giving of
any such notice by the Company, to register any of its Restricted Stock (which
request shall state the intended method of disposition thereof), the Company
will use its best efforts to cause the Restricted Stock as to which registration
shall have been so requested to be included in the securities to be covered by
the registration statement proposed to be filed by the Company, all to the
extent requisite to permit the sale or other disposition by the holder (in
accordance with its written request) of such Restricted Stock so registered. In
the event that any registration pursuant to this Section 5 shall be, in whole or
in part, an underwritten public offering of Common Stock, the number of shares
of Restricted Stock to be included in such an underwriting may be reduced (pro
rata among the requesting holders based upon the number of shares of Restricted
Stock owned by such holders and the shares of Common Stock held by the persons
or entities referred to in clauses (ii) and (iii) of the proviso to this
sentence) if and to the extent that the managing underwriter advises the Company
that marketing factors require a limitation of the number of shares of Common
Stock to be underwritten in such registration, provided, however, that such
number of shares of Restricted Stock shall not be reduced if any shares are to
be included in such underwriting for the account of any person other than (i)
the Company, (ii) requesting holders of Restricted Stock or (iii) any other
holders of Common Stock who as of the date hereof, are entitled to contractual
"piggyback" or "incidental" rights to be included in the registration statement.
Notwithstanding the provisions of this Section 5(a), if the registration was
initiated by the Company at the request of a person or persons entitled to
demand rights as of the date hereof exercising such demand rights, priority in
underwriter cutbacks with respect to such registration shall be governed by the
provisions of their particular agreement providing for such demand rights,
provided that the holders of Restricted Stock that have requested inclusion of
their Restricted Stock to be included therein shall have priority over any other
persons holding securities requested to be included in such registration.
Whenever a registration statement is deemed (pursuant to the provisions of
Section 4) to be a registration statement initiated by the Company and therefore
governed by the provisions of this Section 5, such registration statement shall
nevertheless be deemed to count as a registration statement required to be filed
by the Company under Section 4 if the registration statement covers all shares
of Restricted Stock specified in the notices from the requesting holders thereof
for sale in accordance with the method of disposition specified in such notice,
becomes effective and, if such method of disposition is a firm commitment
underwritten public offering, 75% of all such shares are sold pursuant thereto.
(b) Notwithstanding anything herein to the contrary, the Company
shall not be required to file any registration statement registering the
Restricted Stock upon the demand of the holders of the Restricted Stock made
under Section 4 of this Agreement during the period beginning on the date of the
Company's receipt of a notice from requesting holders pursuant to
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Section 4 or Section 6 of the Registration Rights Agreement by and among the
Company, Edison Venture Fund II, L.P. and Edison Venture Fund, II-Pa., L.P. and
ending on the date on which the distribution of the securities included in such
registration has been completed.
6. Registration Procedures. If and whenever the Company is required by
the provisions of Sections 4 or 5 to use its best efforts to effect the
registration of any shares of Restricted Stock under the Securities Act, the
Company will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement
(which, in the case of an underwritten public offering pursuant to Section 4,
shall be on Form S-1 or S-3 or such other form of general applicability
satisfactory to the managing underwriters selected as herein provided) with
respect to such securities and use its best efforts to cause such registration
statement to become and remain effective for the period of the distribution
contemplated thereby (determined as hereinafter provided);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in Section 6(a) and comply with the provisions of the
Securities Act with respect to the disposition of all Restricted Stock covered
by such registration statement in accordance with the sellers' intended method
of disposition set forth in such registration statement for such period;
(c) furnish to each seller of Restricted Stock and to each
underwriter such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public sale or other
disposition of the Restricted Stock covered by such registration statement;
(d) use its best efforts to register or qualify the Restricted Stock
covered by such registration statement under the securities or "blue sky" laws
of such jurisdictions as the sellers of Restricted Stock or, in the case of an
underwritten public offering, the managing underwriter reasonably shall request,
provided, however, that the Company shall not for any such purpose be required
to qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service of
process in any such jurisdiction;
(e) use its best efforts to list the Restricted Stock covered by such
registration statement with any securities exchange on which the Common Stock of
the Company is then listed;
(f) immediately notify each seller of Restricted Stock and each
underwriter under such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of (i)
the happening of any event of which the Company has knowledge as a result of
which the prospectus contained 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 light of the circumstances then existing, (ii) any
request by the Commission for amendments or supplements to the registration
statement or the prospectus or for additional information, (iii) the issuance by
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the Commission of any stop order suspending the effectiveness of the
registration statement or the initiation of any proceedings for that purpose, or
(iv) the receipt by the Company of any notification with respect to the
suspension of the qualification of the Restricted Stock for sale in any
jurisdiction or the initiation of any proceeding for such purposes, whereupon
each such seller shall refrain from making any sales of Restricted Stock in any
jurisdiction in which such sales may not be made until such seller has either
received from the Company a prospectus supplement describing such event or has
been advised in writing by the Company that the use of the prospectus may be
resumed;
(g) if the offering is underwritten and at the request of any seller
of Restricted Stock, use its best efforts to furnish on the date that Restricted
Stock is delivered to the underwriters for sale pursuant to such registration:
(i) an opinion dated such date of counsel representing the Company for the
purposes of such registration, addressed to the underwriters and to such seller,
stating that such registration statement has become effective under the
Securities Act and that (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the Securities
Act, (B) the registration statement, the related prospectus and each amendment
or supplement thereof comply as to form in all material respects with the
requirements of the Securities Act (except that such counsel need not express
any opinion as to financial statements contained therein) and (C) to such other
effects as reasonably may be requested by counsel for the underwriters or by
such seller or its counsel and (ii) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to such registration as such underwriters reasonably may request;
and
(h) make available for inspection by each seller of Restricted Stock,
any underwriter participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained by such seller
or underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such registration
statement.
For purposes of Section 6(a) and 6(b) and of Section 4(c), the period of
distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Restricted Stock in any other registration shall be deemed to extend until
the earlier of (1) the sale of all Restricted stock covered thereby, or (2) 120
days after the effective date thereof.
In connection with each registration hereunder, the sellers of Restricted Stock
will furnish to the Company in writing such information with respect to
themselves and the proposed distribution
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by them as the Company may reasonably request or as shall be necessary in order
to assure compliance with federal and applicable state securities laws.
In connection with each registration pursuant to Sections 4 or 5 covering an
underwritten public offering, the Company and each seller agree to enter into a
written agreement with the managing underwriter selected in the manner herein
provided in such form and containing such provisions as are customary in the
securities business for such an arrangement between such underwriter and
companies of the Company's size and investment stature.
7. Expenses. All expenses incurred by the Company in complying with
Sections 4 or 5, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for the Company, reasonable and documented fees and expenses
of one counsel to the participating Investors not to exceed $25,000 in the
aggregate, fees and expenses (including counsel fees) incurred in connection
with complying with state securities or "blue sky" laws, fees of the National
Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents
and registrars, and costs of insurance for the sellers of Restricted Stock, but
excluding any Selling Expenses, are called "Registration Expenses". All
underwriting discounts, selling commissions and fees of counsel to participating
sellers applicable to the sale of Restricted Stock are called "Selling
Expenses"; provided however, that the Company will pay the reasonable and
documented fees and expenses of one counsel to the participating Investors not
to exceed $25,000 in the aggregate.
The Company will pay all Registration Expenses in connection with each
registration statement under Sections 4 or 5. All Selling Expenses in connection
with each registration statement under Sections 4 or 5 shall be borne by the
participating sellers in proportion to the number of shares sold by each, or by
such participating sellers other than the Company (except to the extent the
Company shall be a seller) as they may agree.
8. Indemnification and Contribution.
(a) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Sections 4 or 5, the Company will indemnify
and hold harmless each seller of such Restricted Stock thereunder, each
underwriter of such Restricted Stock thereunder and each other person, if any,
who controls such seller or underwriter within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to
which such seller, underwriter or controlling person 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 any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such Restricted Stock was registered
under the Securities Act pursuant to Sections 4 or 5, 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, and will reimburse each such seller, each
such underwriter and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, provided, however,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based
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upon an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by or on behalf of any
such seller, any such underwriter or any such controlling person in writing
specifically for use in such registration statement or prospectus.
(b) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Sections 4 or 5, each seller of such
Restricted Stock thereunder, severally and not jointly, will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, against all losses,
claims, damages or liabilities, joint or several, to which the Company or such
officer, director, underwriter or controlling person 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 any
untrue statement or alleged untrue statement of any material fact contained in
the registration statement under which such Restricted Stock was registered
under the Securities Act pursuant to Sections 4 or 5, 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, and will reimburse the Company and each such
officer, director, underwriter and controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, provided, however,
that such seller will be liable hereunder in any such case if and only to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with information pertaining to
such seller, as such, furnished in writing to the Company by or on behalf of
such seller specifically for use in such registration statement or prospectus,
and provided, further, however, that the liability of each seller hereunder
shall be limited to the proportion of any such loss, claim, damage, liability or
expense which is equal to the proportion that the public offering price of the
shares sold by such seller under such registration statement bears to the total
public offering price of all securities sold thereunder, but not in any event to
exceed the proceeds received by such seller from the sale of Restricted Stock
covered by such registration statement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may have
to such indemnified party other than under this Section 8 and shall only relieve
it from any liability which it may have to such indemnified party under this
Section 8 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 8 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense
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thereof other than reasonable costs of investigation and of liaison with counsel
so selected, provided, however, that, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, the indemnified party shall have the right to select a separate counsel
and to assume such legal defenses and otherwise to participate in the defense of
such action, with the expenses and fees of such separate counsel and other
expenses related to such participation to be reimbursed by the indemnifying
party as incurred.
(d) 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 of
Restricted Stock exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 8 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 8 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
8; then, and in each such case, each indemnitor, in lieu of indemnifying the
indemnitee, shall contribute to the amount paid or payable by such indemnitee as
a result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative fault of
the indemnitor and the indemnitee in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault of such indemnitor and indemnitee shall be determined by
reference to, among other things whether the untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
relates to information supplied by such indemnitor or by such indemnitee, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable by
an indemnitee as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such indemnitee in
connection with investigating or defending any such action or claim. No person
or entity guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
or entity who was not guilty of such fraudulent misrepresentation. The
obligations of the sellers and any underwriters in this Section 8(d) to
contribute shall be several in proportion to the percentage of principal amount
of Restricted Stock registered or underwritten, as the case may be, by them and
not jointly and shall be subject to the limitations set forth in the last
sentence of Section 8(b).
9. Changes in Common Stock or Preferred Shares. If, and as often as,
there is any change in the Common Stock or the Preferred Shares by way of a
stock split, stock dividend, combination or reclassification, or through a
merger, consolidation, reorganization or recapitalization, or by any other
means, appropriate adjustment shall be made in the provisions hereof so that the
rights and privileges granted hereby shall continue with respect to the Common
Stock or the Preferred Shares as so changed.
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10. 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 Restricted Stock 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 under the Securities Act;
(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; and
(c) furnish to each holder of Restricted Stock forthwith upon request
a written statement by the Company as to its compliance with the reporting
requirements of such Rule 144 and of the Securities Act and the Exchange 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 such holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing such holder to sell any Restricted Stock without
registration.
11. Representations and Warranties of the Company. The Company represents
and warrants to the Investors as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have 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 Charter or By-laws of the Company or any provision of any
indenture, agreement or other instrument to which it or any or 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.
(b) 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.
12. Miscellaneous.
(a) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto (including, without
limitation, transferees of any Preferred Shares or Restricted Stock), whether so
expressed or not, provided, however, that registration rights conferred herein
on the holders of Preferred Shares or Restricted Stock shall only inure to the
benefit of a transferee of Preferred Shares or Restricted Stock if (i) there is
transferred to such transferee at least 10% of the total shares of Restricted
Stock originally issued pursuant to the Purchase Agreement to the direct or
indirect transferor of such transferee or (ii) such transferee is a partner,
shareholder or affiliate of a party hereto.
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(b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered in person, mailed by
certified or registered mail, return receipt requested, or sent by facsimile,
addressed as follows:
if to the Company or any other party hereto, at the address of such
party set forth in the applicable Purchase Agreement;
if to any subsequent holder of Preferred Shares or Restricted Stock,
to it at such address as may have been furnished to the Company in writing by
such holder;
or, in any case, at such other address or addresses as shall have been
furnished in writing to the Company (in the case of a holder of Preferred Shares
or Restricted Stock) or to the holders of Preferred Shares or Restricted Stock
(in the case of the Company) in accordance with the provisions of this
paragraph.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without giving regard to any conflict to
any provisions regarding conflicts of law.
(d) This Agreement may not be amended or modified, and no provision
hereof may be waived, without the written consent of the Company and the holders
of at least two-thirds of the outstanding shares of Restricted Stock; provided,
however, that no consent of the holders of Restricted Stock shall be required
for the amendment of the signature pages or Schedule A hereto to reflect
Subsequent Investors (as defined in the Purchase Agreement).
(e) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(f) The obligations of the Company to register shares of Restricted
Stock under Sections 4 or 5 shall terminate on June 17, 2013.
(g) If requested in writing by the underwriters for an underwritten
public offering of securities of the Company, each holder of Restricted Stock
who is a party to this Agreement shall agree not to offer, sell, transfer or
otherwise dispose of any shares of Restricted Stock or any other shares of
Common Stock (other than shares of Restricted Stock or other shares of Common
Stock being registered in such offering), (and shall not effect any short sale
of, any loan of, or any grant of any option for the purchase of, any Common
Stock), directly or indirectly, without the consent of such underwriters, during
the seven (7) days prior to or within 90 days following the effective date of
the registration statement relating to such offering (or such shorter period of
time that is sufficient and appropriate, in the opinion of the managing
underwriter, in order to complete the sale and distribution of securities
included in such registration); provided, however, that all persons or entities
entitled to registration rights with respect to shares of Common Stock who are
not parties to this Agreement, all other persons or entities selling shares of
Common Stock in such offering, all persons holding in excess of 1% of the
capital stock of the Company on a fully diluted basis and all executive officers
and directors of the Company shall also have agreed not to sell publicly their
Common Stock under the circumstances and pursuant to the terms set forth in this
Section 12. The Company may impose
11
stop transfer instructions with respect to the Common Stock subject to the
foregoing restriction during such restricted period.
(h) Notwithstanding the provisions of Section 6(a), the Company's
obligation to file a registration statement, or cause such registration
statement to become and remain effective, shall be suspended for a period not to
exceed 90 days in any 12-month period if the Company determines in good faith
that 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, and no sales of Restricted Stock shall be made by the holders during
such period.
(i) The Company shall not grant to any third party any registration
rights more favorable than any of those contained herein, so long as any of the
registration rights under this Agreement remains in effect.
(j) 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
12
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first above written.
NOBEL LEARNING COMMUNITIES, INC.
By: /s/ Xxxx X. Xxxxx
------------------------------------
Title: Vice Chairman
CAMDEN PARTNERS STRATEGIC FUND
II-A, L.P.
By: Camden Partners Strategic II, LLC,
its general partner
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Member
CAMDEN PARTNERS STRATEGIC FUND
II-B, L.P.
By: Camden Partners Strategic II, LLC,
its general partner
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Member
13
SCHEDULE A
LIST OF INVESTORS
Camden Partners Strategic Fund II-A, L.P.
Camden Partners Strategic Fund II-B, L.P.
