REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement")
is made and entered into as of 13th day of August, 2004 by
and among eNucleus, Inc., a corporation organized and
existing under the laws of the State of Delaware
("eNucleus" or the "Company"), and Xxxxxx Partners LP, a
New York limited partnership ("Investor"). Unless defined
otherwise, capitalized terms herein shall have the
identical meaning as in the Stock Purchase Agreement (as
defined below).
PRELIMINARY STATEMENT
WHEREAS, pursuant to the Stock Purchase Agreement, of
even date herewith (the "Stock Purchase Agreement"), by and
among eNucleus and the Investor, as part of the
consideration, the Investor shall receive Shares of
eNucleus; and
WHEREAS, the ability of the Investor to sell its
shares of Common Stock is subject to certain restrictions
under the 1933 Act; and
WHEREAS, as a condition to the Stock Purchase
Agreement, eNucleus has agreed to provide the Investor with
a mechanism that will permit the Investor, subject to a
market stand-off agreement, to sell its Shares of Common
Stock in the future.
NOW, THEREFORE, in consideration of the premises and
of the mutual covenants and agreements, and subject to the
terms and conditions herein contained, the parties hereto
hereby agree as follows:
ARTICLE I
INCORPORATION BY REFERENCE, SUPERSEDER
1.1 Incorporation by Reference. The foregoing recitals,
Schedule A and the Exhibits attached hereto and referred to
herein, are hereby acknowledged to be true and accurate,
and are incorporated herein by this reference.
1.2 Superseder. This Agreement, to the extent that it
is inconsistent with any other instrument or understanding
among the parties governing the affairs of the Company,
shall supersede such instrument or understanding to the
fullest extent permitted by law. A copy of this Agreement
shall be filed at the Company's principal office.
ARTICLE II
DEMAND REGISTRATION RIGHTS
2.1 "Registrable Shares" means and includes the Shares of
eNucleus issued to the Investor pursuant to the Stock
Purchase Agreement. As to any particular Registrable
Shares, such securities will cease to be Registrable Shares
when (a) they have been effectively registered under the
1933 Act and disposed of in accordance with the
registration statement covering them, (b) they are or may
be freely traded without registration pursuant to Rule 144
under the 1933 Act (or any similar provisions that are then
in effect), or (c) they have been otherwise transferred and
new certificates for them not bearing a restrictive legend
have been issued by eNucleus and eNucleus shall not have
"stop transfer" instructions against them. "Shares" shall
mean, collectively, the shares of Common Stock of the
Company being issued pursuant to the Stock Purchase
Agreement and those shares of Common Stock issuable to the
Investor upon exercise of the Warrants being issued
pursuant to the Stock Purchase Agreement.
2.2 Registration of Registrable Securities. The Company
shall prepare and file within thirty (30) days following
the date hereof (the "Filing Date") a registration
statement (the "Registration Statement") covering the
resale of the Registrable Securities. The Company shall use
its best efforts to cause the Registration Statement to be
declared effective by the SEC on the earlier of (i) 120
days following the Closing Date with respect to the
Registration Statement, (ii) ten (10) days following the
receipt of a "No Review" or similar letter from the SEC or
(iii) the first day following the day the SEC determines
the Registration Statement is eligible to be declared
effective (the "Required Effectiveness Date"). Nothing
contained herein shall be deemed to limit the number of
Registrable Securities to be registered by the Company
hereunder. As a result, should the Registration Statement
not relate to the maximum number of Registrable Securities
acquired by (or potentially acquirable by) the holders of
the Shares of eNucleus issued to the Investor pursuant to
the Stock Purchase Agreement, the Company shall be required
to promptly file a separate registration statement
(utilizing Rule 462 promulgated under the Exchange Act,
where applicable) relating to such Registrable Securities
which then remain unregistered. The provisions of this
Agreement shall relate to any such separate registration
statement as if it were an amendment to the Registration
Statement.
2.3 Demand Registration. Subject to the limitations of
Section 2.2, at any time, holders of the majority of the
Shares as of the date of the Stock Purchase Agreement may
request the registration, once and only once, under the
1933 Act of all or part of the Registrable Shares then
outstanding (a "Demand Registration"). Subject to the
conditions of Section 3, the Company shall use its best
efforts to file such registration statement under the 1933
Act as promptly as practicable after the date any such
request is received by the Company and to cause such
registration statement to be declared effective. The
Company shall notify the Investor promptly when any such
registration statement has been declared effective. If
more than 80 percent of the Shares as of the date of the
Stock Purchase Agreement have been registered or sold, this
provision shall expire.
2.4 Registration Statement Form. Registrations under
Section 2.2 and Section 2.3 shall be on Form SB-2 or such
other appropriate registration form of the SEC as shall
permit the disposition of such Registrable Securities in
accordance with the intended method or methods of
disposition specified in the Registration Statement;
provided, however, such intended method of disposition
shall not include an underwritten offering of the
Registrable Securities.
2.5 Expenses. The Company will pay all Registration
expenses in connection with any registration required by
under Sections 2.2 and Section 2.3 herein.
2.6 Effective Registration Statement. A registration
requested pursuant to Sections 2.2 and Section 2.3 shall
not be deemed to have been effected (i) unless a
registration statement with respect thereto has become
effective within the time period specified herein, provided
that a registration which does not become effective after
the Company filed a registration statement with respect
thereto solely by reason of the refusal to proceed of any
holder of Registrable Securities (other than a refusal to
proceed based upon the advice of counsel in the form of a
letter signed by such counsel and provided to the Company
relating to a disclosure matter unrelated to such holder)
shall be deemed to have been effected by the Company unless
the holders of the Registrable Securities shall have
elected to pay all Registration Expenses in connection with
such registration, (ii) if, after it has become effective,
such registration becomes subject to any stop order,
injunction or other order or extraordinary requirement of
the SEC or other governmental agency or court for any
reason or (iii) if, after it has become effective, such
registration ceases to be effective for more than the
allowable Black-Out Periods (as defined herein).
2.7 Plan Of Distribution. The Company hereby agrees that
the Registration Statement shall include a plan of
distribution section reasonably acceptable to the Holder;
provided, however, such plan of distribution section shall
be modified by the Company so as to not provide for the
disposition of the Registrable Securities on the basis of
an underwritten offering.
2.8 Liquidated Damages. If, after four (4) months from
the date hereof, in the event the Company does not register
the Registrable Securities pursuant to the requirements of
Section 2.2 herein, or if the Registration Statement filed
pursuant to Section 2.2 herein is not declared effective,
or if the Registrable Securities are registered pursuant to
an effective Registration Statement and such Registration
Statement or other Registration Statement including the
Registrable Securities is not effective in the period from
four (4) months from the date hereof through two (2) years
following the date hereof, the Company shall, for each
such day, pay the Purchaser, as liquidated damages and not
as a penalty, an amount equal to fifteen (15%) of the
Purchase Price per annum; and for any such day, such
payment shall be made no later than the first business day
of the calendar month next succeeding the month in which
such day occurs.
The parties agree that the only damages payable for a
violation of the terms of this Agreement with respect to
which liquidated damages are expressly provided shall be
such liquidated damages. Nothing shall preclude the
Investor or obtaining specific performance or other
equitable relief with respect to this Agreement.
The parties hereto agree that the liquidated damages
provided for in this Section 2.8 constitute a reasonable
estimate of the damages that may be incurred by the
Investor by reason of the failure of the Registration
Statement to be filed or declared effective in accordance
with the provisions hereof.
The obligation of the Company terminates when the holder of
shares of Registrable Securities no longer holds more than
twenty percent (20%) of their shares of Registrable
Securities.
ARTICLE III
INCIDENTAL REGISTRATION RIGHTS
3.1 Right To Include ("Piggy-Back") Registrable
Securities. Provided that the Registrable Securities have
not been registered, if at any time after the date hereof
but before the second anniversary of the date hereof, the
Company proposes to register any of its securities under
the 1933 Act (other than by a registration in connection
with an acquisition in a manner which would not permit
registration of Registrable Securities for sale to the
public, on Form S-8, or any successor form thereto, on Form
S-4, or any successor form thereto and other than pursuant
to Section 2), on an underwritten basis (either best-
efforts or firm-commitment), then, the Company will each
such time give prompt written notice to all holders of
Registrable Securities of its intention to do so and of
such holders of Registrable Securities' rights under this
Section 3.1. Upon the written
request of any such holders of Registrable Securities made
within ten (10) days after the receipt of any such notice
(which request shall specify the Registrable Securities
intended to be disposed of by such holders of Registrable
Securities and the intended method of disposition thereof),
the Company will, subject to the terms of this Agreement,
use its commercially reasonable best efforts to effect the
registration under the 1933 Act of the Registrable
Securities, to the extent requisite to permit the
disposition (in accordance with the intended methods
thereof as aforesaid) of such Registrable Securities so to
be registered, by inclusion of such Registrable Securities
in the registration statement which covers the securities
which the Company proposes to register, provided that if,
at any time after written notice of its intention to
register any securities and prior to the effective
date of the registration statement filed in connection with
such registration, the Company shall determine for any
reason either not to register or to delay registration of
such securities, the Company may, at its election, give
written notice of such determination to each holders of
Registrable Securities and, thereupon, (i) in the case of a
determination not to register, shall be relieved of this
obligation to register any Registrable Securities in
connection with such registration (but not from its
obligation to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of
any holder or holders of Registrable Securities entitled to
do so to request that such registration be effected as a
registration under Section 2, and (ii) in the case of a
determination to delay registering, shall be permitted to
delay registering any Registrable Securities, for the same
period as the delay in registering such other securities.
No registration effected under this Section 3.1 shall
relieve the Company of its obligation to effect any
registration upon request under Section 2. The Company will
pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant
to this Section 3.1. The right provided the Holders of the
Registrable Securities pursuant to this Section shall be
exercisable at their sole discretion and will in no way
limit any of the Company's obligations to pay the
Securities according to their terms.
3.2 Priority In Incidental Registrations. If the managing
underwriter of the underwritten offering contemplated by
this Section 3 shall inform the Company and holders of the
Registrable Securities requesting such registration by
letter of its belief that the number of securities
requested to be included in such registration exceeds the
number
which can be sold in such offering, then the Company will
include in such registration, to the extent of the number
which the Company is so advised can be sold in such
offering, (i) first, securities proposed by the Company to
be sold for its own account, and (ii) second, Registrable
Securities and (iii) third, securities of other selling
security holders requested to be included in such
registration.
ARTICLE IV
REGISTRATION PROCEDURES
4.1 REGISTRATION PROCEDURES. If and whenever the
Company is required to effect the registration of any
Registrable Securities under the 1933 Act as provided in
Section 2.2 and, as applicable, 2.3, the Company shall, as
expeditiously as possible:
(i) prepare and file with the SEC
the Registration Statement, or amendments thereto, to
effect such registration (including such audited financial
statements as may be required by the 1933 Act or the rules
and regulations promulgated thereunder) and thereafter use
its commercially reasonable best efforts to cause such
registration statement to be declared effective by the SEC,
as soon as practicable, but in any event no later than the
Required Effectiveness Date (with respect to a registration
pursuant to Section 2.2); provided, however, that before
filing such registration statement or any amendments
thereto, the Company will furnish to the counsel selected
by the holders of Registrable Securities which are to be
included in such registration, copies of all such documents
proposed to be filed;
(ii) with respect to any registration
statement pursuant to Section 2.2 or Section 2.3, prepare
and file with the SEC 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 and to comply with the
provisions of the 1933 Act with respect to the disposition
of all Registrable Securities covered by such registration
statement until the earlier to occur of thirty six (36)
months after the date of this Agreement (subject to the
right of the Company to suspend the effectiveness thereof
for not more than 10 consecutive Trading Days or an
aggregate of 20 Trading Days during each year (each a
"Black-Out Period")) or such time as all of the securities
which are the subject of such registration statement cease
to be Registrable Securities (such period, in each case,
the "Registration Maintenance Period");
(iii) furnish to each holder of
Registrable Securities covered by such registration
statement such number of conformed copies of such
registration statement and of each such amendment and
supplement thereto (in each case including all exhibits),
such number of copies of the prospectus contained in such
registration statement (including each preliminary
prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the 1933 Act, in
conformity with the requirements of the 1933 Act, and such
other documents, as such holder of Registrable Securities
and underwriter, if any, may reasonably request in order to
facilitate the public sale or other disposition of the
Registrable Securities owned by such holder of Registrable
Securities;
(iv) use its commercially reasonable
best efforts to register or qualify all Registrable
Securities and other securities covered by such
registration statement under such other securities laws or
blue sky laws as any holder of Registrable Securities
thereof shall reasonably request, to keep such
registrations or qualifications in effect for so long as
such registration statement remains in effect, and take any
other action which may be reasonably necessary to enable
such holder of Registrable Securities to consummate the
disposition in such jurisdictions of the securities owned
by such holder of Registrable Securities, except that the
Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation
in any jurisdiction wherein it would not but for the
requirements of this subdivision (iv) be obligated to be so
qualified or to consent to general service of process in
any such jurisdiction;
(v) use its commercially reasonable
best efforts to cause all Registrable Securities covered by
such registration statement to be registered with or
approved by such other governmental agencies or authorities
as may be necessary to enable the holder of Registrable
Securities thereof to consummate the disposition of such
Registrable Securities;
(vi) furnish to each holder of
Registrable Securities a signed counterpart, addressed to
such holder of Registrable Securities, and the
underwriters, if any, of an
opinion of counsel for the Company, dated the effective
date of such registration statement (or, if such
registration includes an underwritten public offering, an
opinion dated the date of the closing under the
underwriting agreement), reasonably satisfactory in form
and substance to such holder of Registrable Securities)
including that the prospectus and any prospectus supplement
forming a part of the Registration Statement does not
contain an untrue statement of a material fact or omits a
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
and
(vii) notify the Investor and its
counsel promptly and confirm such advice in writing
promptly after the Company has knowledge thereof:
(A) when the Registration
Statement, the prospectus or any prospectus supplement
related thereto or post-effective amendment to the
Registration Statement has been filed, and, with respect to
the Registration Statement or any post-effective amendment
thereto, when the same has become effective;
(B) of any request by the
SEC for amendments or supplements to the Registration
Statement or the prospectus or for additional information;
(C) of the issuance by the
SEC of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings
by any Person for that purpose; and
(D) of the receipt by the
Company of any notification with respect to the suspension
of the qualification of any Registrable Securities for sale
under the securities or blue sky laws of any jurisdiction
or the initiation or threat of any proceeding for such
purpose;
(viii) 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 1933 Act, upon
discovery that, or upon 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 any
material facts required to be stated therein or necessary
to make the statements therein not misleading in the light
of the circumstances then existing, and at the request of
any such holder of Registrable Securities promptly prepare
and furnish to such holder of Registrable Securities a
reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the
circumstances then existing;
(ix) use its best efforts to obtain
the withdrawal of any order suspending the effectiveness of
the Registration Statement at the earliest possible moment;
(x) otherwise use its commercially
reasonable best efforts to comply with all applicable rules
and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve
months, but not more than eighteen months, beginning with
the first full calendar month after the effective date of
such registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the 1933
Act and Rule 158 thereunder;
(xi) enter into such agreements and
take such other actions as the Investor shall reasonably
request in writing (at the expense of the requesting or
benefiting Investors) in order to expedite or facilitate
the disposition of such Registrable Securities; and
(xii) use its commercially reasonable
best efforts to list all Registrable Securities covered by
such registration statement on any securities exchange on
which any of the Registrable Securities are then listed.
The Company may require each holder of Registrable
Securities as to which any registration is being effected
to furnish the Company such information regarding such
holder of Registrable Securities and the distribution of
such securities as the Company may from time to time
reasonably request in writing.
4.2 The Company will not file any registration
statement pursuant to Section 2.2 or Section 2.3, or
amendment thereto or any prospectus or any supplement
thereto to which the Investors shall reasonably object,
provided that the Company may file such documents in a form
required by law or upon the advice of its counsel.
4.3 The Company represents and warrants to each
holder of Registrable Securities that it has obtained all
necessary waivers, consents and authorizations necessary to
execute this Agreement and consummate the transactions
contemplated hereby other than such waivers, consents
and/or authorizations specifically contemplated by the
Stock Purchase Agreement.
4.4 Each holder of Registrable Securities agrees that,
upon receipt of any notice from the Company of the
occurrence of any event of the kind described in
subdivision (viii) of
Section 4.1, such Holder will forthwith discontinue such
holder of Registrable Securities' disposition of
Registrable Securities pursuant to the Registration
Statement relating to such Registrable Securities until
such holder of Registrable Securities' receipt of the
copies of the supplemented or amended prospectus
contemplated by subdivision (viii) of Section 4.1 and, if
so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent
file copies, then in such Holder's possession of the
prospectus relating to such Registrable Securities current
at the time of receipt of such notice.
ARTICLE V
UNDERWRITTEN OFFERINGS
5.1 Incidental Underwritten Offerings. If the Company at
any time proposes to register any of its securities under
the 1933 Act as contemplated by Section 3.1 and such
securities are to be distributed by or through one or more
underwriters, the Company will, if requested by any holder
of Registrable Securities as provided in Section 3.1 and
subject to the provisions of Section 3.2, use its
commercially reasonable best efforts to arrange for such
underwriters to include all the Registrable Securities to
be offered and sold by such holder among the securities to
be distributed by such underwriters.
5.2 Participation In Underwritten Offerings. No holder of
Registrable Securities may participate in any underwritten
offering under Section 3.1 unless such holder of
Registrable Securities (i) agrees to sell such Person's
securities on the basis provided in any underwriting
arrangements approved, subject to the terms and conditions
hereof, by the holders of a majority of Registrable
Securities to be included in such underwritten offering and
(ii) completes and executes all questionnaires,
indemnities, underwriting agreements and other documents
(other than powers of attorney) required under the terms of
such underwriting arrangements. Notwithstanding the
foregoing, no underwriting agreement (or other agreement in
connection with such offering) shall require any holder of
Registrable Securities to make a representation or warranty
to or agreements with the Company or the underwriters other
than representations and warranties contained in a writing
furnished by such holder of Registrable Securities
expressly for use in the related registration statement or
representations, warranties or agreements regarding such
holder of Registrable Securities, such holder's Registrable
Securities and such holder's intended method of
distribution and any other representation required by law.
5.3 Preparation; Reasonable Investigation. In connection
with the preparation and filing of each registration
statement under the 1933 Act pursuant to this Agreement,
the Company will give the holders of Registrable Securities
registered under such registration statement, and their
respective counsel and accountants, the opportunity to
participate in the preparation of such registration
statement, each prospectus included therein or filed with
the SEC, and each amendment thereof or supplement thereto,
and will give each of them such access to its books and
records and such opportunities to discuss the business of
the Company with its officers and the independent public
accountants who have certified its financial statements as
shall be necessary, in the reasonable opinion of such
holders' and such underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of
the 1933 Act.
ARTICLE VI
INDEMNIFICATION
6.1 Indemnification by the Company. In the event of any
registration of any securities of the Company under the
1933 Act, the Company will, and hereby does agree to
indemnify and hold harmless the holder of any Registrable
Securities covered by such registration statement, its
directors and officers, each other Person who participates
as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such
holder or any such underwriter within the meaning of the
1933 Act against any losses, claims, damages or
liabilities, joint or several, to which such holder or any
such director or officer or underwriter or controlling
person may become subject under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or
actions or proceedings, whether commenced or threatened, 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
securities were registered under the 1933 Act, any
preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or
supplement thereto, or any 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 the Company will reimburse such holder and each such
director, officer, underwriter and controlling person for
any legal or any other expenses reasonably incurred by them
in connection with investigating or defending any such
loss, claim, liability, action or proceeding, provided that
the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability, (or
action or proceeding in respect thereof) or expense arises
out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in
such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with
written information furnished to the Company by such holder
or underwriter stating that it is for use in the
preparation thereof and, provided further that the Company
shall not be liable to any Person who participates as an
underwriter in the offering or sale of Registrable
Securities or to any other Person, if any, who controls
such underwriter within the meaning of the 1933 Act, in any
such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or
expense arises out of such Person's failure to send or give
a copy of the final prospectus, as the same may be then
supplemented or amended, within the time required by the
1933 Act to the Person asserting the existence of an untrue
statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of
the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final
prospectus or an amendment or supplement thereto. Such
indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of such holder or
any such director, officer, underwriter or controlling
person and shall survive the transfer of such securities by
such holder.
6.2 Indemnification by the Investor. The Company may
require, as a condition to including any Registrable
Securities in any registration statement filed pursuant to
this Agreement, that the Company shall have received an
undertaking satisfactory to it from the prospective holder
of such Registrable Securities, to indemnify and hold
harmless (in the same manner and to the same extent as set
forth in Section 6.1) the Company, each director of the
Company, each officer of the Company and each other Person,
if any, who controls the Company within the meaning of the
1933 Act, with respect to any statement or alleged
statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information
furnished to the Company through an instrument duly
executed by such holder of Registrable Securities
specifically stating that it is for use in the preparation
of such registration statement, preliminary prospectus,
final prospectus, summary prospectus, amendment or
supplement. Any such indemnity shall remain in full force
and effect, regardless of any investigation made by or on
behalf of the Company or any such director, officer or
controlling person and shall survive the transfer of such
securities by such Investor.
6.3 Notices Of Claims, Etc. Promptly after receipt by an
indemnified party of notice of the commencement of any
action or proceeding involving a claim referred to in
Sections 6.1 and Section 6.2, such indemnified party will,
if claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of
the commencement of such action, provided that the failure
of any indemnified party to give notice as provided herein
shall not relieve the indemnifying party of its obligations
under Sections 6.1 and Section 6.2, except to the extent
that the indemnifying party is actually prejudiced by such
failure to give notice. In case any such action is brought
against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist in
respect of such claim, the indemnifying party shall be
entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party
similarly notified, to the extent that the indemnifying
party may wish, 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 the defense thereof, the indemnifying
party shall not be liable to such indemnified party for any
legal or other expenses subsequently incurred by the latter
in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party
shall, without the consent of the indemnified party,
consent to entry of any judgment or enter into any
settlement of any such action 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, or a covenant not to xxx, in respect to such
claim or litigation. No indemnified party shall consent to
entry of any judgment or enter into any settlement of any
such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying
party.
6.4 Other Indemnification. Indemnification similar to
that specified in Sections 6.1 and Section 6.2 (with
appropriate modifications) shall be given by the Company
and each holder of Registrable Securities (but only if and
to the extent required pursuant to the terms herein) with
respect to any required registration or other qualification
of securities under any Federal or state law or regulation
of any governmental authority, other than the 1933 Act.
6.5 Indemnification Payments. The indemnification
required by Sections 6.1 and Section 6.2 shall be made by
periodic payments of the amount thereof during the course
of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred.
6.6 Contribution. If the indemnification provided for in
Sections 6.1 and Section 6.2 is unavailable to an
indemnified party in respect of any expense, loss, claim,
damage or liability referred to therein, then each
indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such
expense, loss, claim, damage or liability (i) in such
proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the
holder of Registrable Securities or underwriter, as the
case may be, on the other from the distribution of the
Registrable Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and of
the holder of Registrable Securities or underwriter, as the
case may be, on the other in connection with the statements
or omissions which resulted in such expense, loss, damage
or liability, as well as any other relevant equitable
considerations. The relative benefits received by the
Company on the one hand and the holder of Registrable
Securities or underwriter, as the case may be, on the other
in connection with the distribution of the Registrable
Securities shall be deemed to be in the same proportion as
the total net proceeds received by the Company from the
initial sale of the Registrable Securities by the Company
to the purchasers bear to the gain, if any, realized by all
selling holders participating in such offering or the
underwriting discounts and commissions received by the
underwriter, as the case may be. The relative fault of the
Company on the one hand and of the holder of Registrable
Securities or underwriter, as the case may be, on the other
shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a
material fact or omission to state a material fact relates
to information supplied by the Company, by the holder of
Registrable Securities or by the underwriter and the
parties' relative intent, knowledge, access to information
supplied by the Company, by the holder of Registrable
Securities or by the underwriter and the parties' relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, provided
that the foregoing contribution agreement shall not inure
to the benefit of any indemnified party if indemnification
would be unavailable to such indemnified party by reason of
the provisions contained herein, and in no event shall the
obligation of any indemnifying party to contribute under
this Section 6.6 exceed the amount that such indemnifying
party would have been obligated to pay by way of
indemnification if the indemnification provided for
hereunder had been available under the circumstances.
The Company and the holders of Registrable
Securities agree that it would not be just and equitable if
contribution pursuant to this Section 6.6 were determined
by pro rata allocation (even if the holders of Registrable
Securities and any underwriters were treated as one entity
for such purpose) or by any other method of allocation that
does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result
of the losses, claims, damages and liabilities referred to
in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth herein, any
legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or
defending any such action or claim.
Notwithstanding the provisions of this Section
6.6, no holder of Registrable Securities or underwriter
shall be required to contribute any amount in excess of the
amount by which (i) in the case of any such holder, the net
proceeds received by such holder from the sale of
Registrable Securities or (ii) in the case of an
underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public
were offered to the public exceeds, in any such case, the
amount of any damages that such holder or underwriter has
otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.
ARTICLE VII
RULE 144
7.1 Rule 144. The Company shall timely file the
reports required to be filed by it under the 1933 Act and
the 1934 Act (including but not limited to the reports
under Sections 13 and 15(d) of the Exchange Act referred to
in subparagraph (c) of Rule 144 adopted by the SEC under
the 0000 Xxx) and the rules and regulations adopted by the
SEC thereunder (or, if the Company is not required to file
such reports, will, upon the request of any holder of
Registrable Securities, make publicly available other
information) and will take such further action as any
holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such
holder to sell Registrable Securities without registration
under the 1933 Act within the limitation of the exemptions
provided by (a) Rule 144 under the 1933 Act, as such Rule
may be amended from time to time, or (b) any similar rule
or regulation hereafter adopted by the SEC. Upon the
request of any holder of Registrable Securities, the
Company will deliver to such holder a written statement as
to whether it has complied with the requirements of this
Section 7.1.
ARTICLE VIII
MISCELLANEOUS
8.1 Amendments And Waivers. This Agreement may be
amended and the Company may take any action herein
prohibited, or omit to perform any act herein required to
be performed by it, only if the Company shall have obtained
the written consent to such amendment, action or omission
to act, of the holder or holders of the sum of the 51% or
more of the shares of (i) Registrable Securities issued at
such time, plus (ii) Registrable Securities issuable upon
exercise or conversion of the Securities then constituting
derivative securities (if such Securities were not fully
exchanged or converted in full as of the date such consent
if sought). Each holder of any Registrable Securities at
the time or thereafter outstanding shall be bound by any
consent authorized by this Section 8.1, whether or not such
Registrable Securities shall have been marked to indicate
such consent.
8.2 Nominees For Beneficial Owners. In the event that
any Registrable Securities are held by a nominee for the
beneficial owner thereof, the beneficial owner thereof may,
at its election, be treated as the holder of such
Registrable Securities for purposes of any request or other
action by any holder or holders of Registrable Securities
pursuant to this Agreement or any determination of any
number of percentage of shares of Registrable Securities
held by a holder or holders of Registrable Securities
contemplated by this Agreement. If the beneficial owner of
any Registrable Securities so elects, the Company may
require assurances reasonably satisfactory to it of such
owner's beneficial ownership or such Registrable
Securities.
8.3 Notices. Except as otherwise provided in this
Agreement, all notices, requests and other communications
to any Person provided for hereunder shall be in writing
and shall be given to such Person (a) in the case of a
party hereto other than the Company, addressed to such
party in the manner set forth in the Stock Purchase
Agreement or at such other address as such party shall have
furnished to the Company in writing, or (b) in the case of
any other holder of Registrable Securities, at the address
that such holder shall have furnished to the Company in
writing, or, until any such other holder so furnishes to
the Company an address, then to and at the address of the
last holder of such Registrable Securities who has
furnished an address to the Company, or (c) in the case of
the Company, at the address set forth on the signature page
hereto, to the attention of its President, or at such other
address, or to the attention of such other officer, as the
Company shall have furnished to each holder of Registrable
Securities at the time outstanding. Each such notice,
request or other communication shall be effective (i) if
given by mail, 72 hours after such communication is
deposited in the mail with first class
postage prepaid, addressed as aforesaid or (ii) if given by
any other means (including, without limitation, by fax or
air courier), when delivered at the address specified
above, provided that any such notice, request or
communication shall not be effective until received.
8.4 Assignment. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the
parties hereto. In addition, and whether or not any express
assignment shall have been made, the provisions of this
Agreement which are for the benefit of the parties hereto
other than the Company shall also be for the benefit of and
enforceable by any subsequent holder of any Registrable
Securities. Each of the Holders of the Registrable
Securities agrees, by accepting any portion of the
Registrable Securities after the date hereof, to the
provisions of this Agreement including, without limitation,
appointment of the Investors' Representative to act on
behalf of such Holder pursuant to the terms hereof which
such actions shall be made in the good faith discretion of
the Investors' Representative and be binding on all persons
for all purposes.
8.5 Descriptive Headings. The descriptive headings of
the several sections and paragraphs of this Agreement are
inserted for reference only and shall not limit or
otherwise affect the meaning hereof.
8.6 Governing Law. This Agreement
shall be governed by, and construed in accordance with, the
laws of the State of Delaware, without giving effect to
applicable principles of conflicts of law.
8.7 Jurisdiction. This Agreement shall be exclusively
governed by and construed in accordance with the laws of
the State of Delaware. If any action is brought among the
parties with respect to this Agreement or otherwise, by way
of a claim or counterclaim, the parties agree that in any
such action, and on all issues, the parties irrevocably
waive their right to a trial by jury. Exclusive
jurisdiction and venue for any such action shall be the
State Courts of Illinois. In the event suit or action is
brought by any party under this Agreement to enforce any of
its terms, or in any appeal therefrom, it is agreed that
the prevailing party shall be entitled to reasonable
attorneys fees to be fixed by the arbitrator, trial court,
and/or appellate court.
8.8 Entire Agreement. This Agreement embodies the
entire agreement and understanding between the Company and
each other party hereto relating to the subject matter
hereof and supercedes all prior agreements and
understandings relating to such subject matter.
8.9 Severability. If any provision of this Agreement,
or the application of such provisions to any Person or
circumstance, shall be held invalid, the remainder of this
Agreement, or the application of such provision to Persons
or circumstances other than those to which it is held
invalid, shall not be affected thereby.
8.10 Binding Effect. All the terms and provisions of this
Agreement whether so expressed or not, shall be binding
upon, inure to the benefit of, and be enforceable by the
parties and their respective administrators, executors,
legal representatives, heirs, successors and assignees.
8.11 Preparation of Agreement.
This Agreement shall not be construed more strongly against
any party regardless of who is responsible for its
preparation. The parties acknowledge each contributed and
is equally responsible for its preparation.
8.12 Failure or Indulgence Not Waiver; Remedies
Cumulative. No failure or delay on the part of
any party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of,
or acquiescence in, any breach of any representation,
warranty, covenant or agreement herein, nor shall nay
single or partial exercise of any such right preclude other
or further exercise thereof or of any other right. All
rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies
otherwise available.
8.13 Counterparts. This Agreement
may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of
which when executed shall be deemed to be an original, but
all of which taken together shall constitute one and the
same agreement. A facsimile transmission of this signed
Agreement shall be legal and binding on all parties hereto.
IN WITNESS WHEREOF, the Investors and the Company have
as of the date first written above executed this Agreement.
ENUCLEUS, INC.
By: __________________________________
Title: ________________________________
XXXXXX PARTNERS LP
By: ________________________________
Xxxxxx Xxxxxx Xxxxxx
President, General Partner of
Xxxxxx Partners LP
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx XX 00000
