REGISTRATION RIGHTS AGREEMENT
Exhibit 10.3
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of ___, 2010
by and among the Company (as defined below) and the investors listed on Exhibit A to this Agreement
(each an “Investor” and collectively, the “Investors”).
RECITALS
WHEREAS, the form of this Agreement was submitted as a part of the Signature Group Holdings,
LLC’s Chapter 11 Fourth Amended Plan of Reorganization of Fremont General Corporation, Joined by
Xxxxx XxXxxxxx as Co-Plan Proponent, Dated June 8, 2010 (the “Plan”), which provides for the
reorganization of Fremont General Corporation, a Nevada Corporation (as reorganized pursuant to the
Plan and now known as Signature Group Holdings, Inc., the “Company”); and
WHEREAS, in connection with the consummation of the transactions contemplated by the Plan,
including the sale of Common Stock and Warrants to the Investors, the parties desire to enter into
this Agreement in order to grant certain registration rights to the Investors as set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1 GENERAL
1.1 Definitions. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to those terms in the Plan. As used in this Agreement, the following terms shall
have the following respective meanings:
“Affiliate” of any particular Person means any other Person controlling, controlled by or
under common control with such particular person or entity.
“Common Stock” means shares of common stock, $0.01 par value per share, of the Company.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or similar federal
statute, and the rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.
“Form S-3” means such form under the Securities Act as in effect on the date hereof or any
successor or similar registration form under the Securities Act subsequently adopted by the SEC
which permits inclusion or incorporation of substantial information by reference to other documents
filed by the Company with the SEC.
“Holder” means any Investor who holds Registrable Securities and any holder of Registrable
Securities to whom the registration rights conferred by this Agreement have been transferred in
compliance with Section 2.8 hereof.
“Person” means any individual, corporation, partnership, joint venture, limited liability
company, business trust, joint stock company, trust or unincorporated organization or any
government or any agency or political subdivision thereof.
“Register,” “registered,” and “registration” shall refer to a registration effected by
preparing
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and filing a registration statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of effectiveness of such registration
statement.
“Registrable Securities” means (a) the Shares; and (b) any Common Stock issued as (or issuable
upon the conversion or exercise of any warrant, right, preferred stock or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for or in replacement
of, the Shares held by the Holders provided, however, that Registrable Securities shall not include
any shares of Common Stock (i) which have been sold to the public by a Holder either pursuant to a
registration statement or Rule 144 under the Securities Act; (ii) which have been sold in a private
transaction in which the transferor’s rights under this Agreement are not assigned in compliance
with the terms of this Agreement; or (iii) which may be sold pursuant to Rule 144 and otherwise
without restriction or limitation pursuant to Rule 144 (or any successor thereto) under the
Securities Act, after taking into account any Holders’ status as an Affiliate of the Company as
determined by counsel to the Company pursuant to a written opinion letter addressed to the
Company’s transfer agent to such effect.
“Registrable Securities then outstanding” shall be the number of shares determined by
calculating the total number of shares of Common Stock that are Registrable Securities issued and
outstanding.
“Registration Expenses” shall mean all expenses incurred by the Company in effecting any
registration pursuant to this Agreement (including any Mandatory Registration or Shelf
Registration), including, without limitation, all registration and filing fees, printing expenses,
fees and disbursements of counsel for the Company, blue sky fees and expenses, and expenses of the
Company’s independent accountants in connection with any regular or special reviews or audits
incident to or required by any such registration, and fees and expenses of underwriters (excluding
discounts and commissions) and any other Persons retained by the Company, but shall not include
Selling Expenses, certain fees and disbursements of counsel for the Holders (except as set forth
below) and the compensation of regular employees of the Company, which shall be paid in any event
by the Company.
“SEC” or “Commission” means the Securities and Exchange Commission.
“Securities Act” shall mean the Securities Act of 1933, as amended, or 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 all underwriting discounts, selling commissions, fees of
underwriters, selling brokers, dealer managers and similar securities industry professionals and
stock transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of
counsel for any Holder (other than the fees and disbursements of counsel included in Registration
Expenses).
“Shares” mean shares of Common Stock to be issued by the Company to the Investors in
accordance with the terms of the Plan or the Warrants.
“Trading Day” means a day on which the principal securities exchange or automated quotation
system upon which the Registrable Securities are then listed for public trading) shall be open for
business.
“Warrants” means the warrants issued pursuant to the Plan to the Investors, to purchase an
aggregate of 15,000,000 shares of Common Stock.
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SECTION 2 REGISTRATION
2.1 Registration
(a) In accordance with the requirements of Section 2.3 below, the Company shall use its
commercially reasonable efforts to file with the SEC, and to cause to be declared effective by the
SEC, a registration statement on the applicable SEC form with respect to the resale from time to
time, whether underwritten or otherwise, of the Registrable Securities by the Holders thereof. The
Company shall also use its commercially reasonable efforts to maintain the effectiveness of the
registration effected pursuant to this Section 2.1 and keep such registration statement free of any
material misstatements or omissions at all times, subject only to the limitations on effectiveness
set forth below. The registration contemplated by this Section 2.1 is referred to herein as the
“Mandatory Registration.” The Mandatory Registration shall be filed with the SEC in accordance with
and pursuant to Rule 415 promulgated under the Securities Act (or any successor rule then in
effect) (a “Shelf Registration”). The Company shall use its commercially reasonable efforts to
cause the registration statement filed on Form S-3 or any similar short-form registration as the
Company may elect to remain effective until such date (the “Shelf Termination Date”) as is the
earlier of (i) the date on which all Registrable Securities included in the registration statement
shall have been sold or shall have otherwise ceased to be Registrable Securities and (ii) the date
on which all remaining Registrable Securities may be sold pursuant to Rule 144 and otherwise
without restriction or limitation pursuant to Rule 144 (or any successor thereto) under the
Securities Act, after taking into account any Holders’ status as an Affiliate of the Company as
determined by counsel to the Company pursuant to a written opinion letter addressed to the
Company’s transfer agent to such effect. If the Company is not then eligible to register for
resale the Registrable Securities on Form S-3, such registration shall be on another appropriate
form in accordance herewith. In the event the Mandatory Registration must be effected on Form S-1
or any similar long-form registration as the Company may elect, the Company shall use commercially
reasonable efforts to file such registration as a Shelf Registration and the Company shall use its
commercially reasonable efforts to keep such registration current and effective, including by
filing periodic post-effective amendments to update the financial statements contained in such
registration statement in accordance with Regulation S-X promulgated under the Securities Act until
the Shelf Termination Date. By 9:30 a.m. on the Trading Day immediately following the effective
date of the applicable registration statement, the Company shall file with the Commission in
accordance with Rule 424 under the Securities Act the final prospectus to be used in connection
with sales pursuant to such registration statement.
(b) Without the written consent of the Investors, the Company shall not include securities,
whether on behalf of itself or any other person, other then the Registrable Securities on any
registration statement filed pursuant to this Section 2.
(c) Notwithstanding anything to the contrary contained in this Agreement, in the event the
Commission seeks to characterize any offering pursuant to a Mandatory Registration filed pursuant
to this Agreement as constituting an offering of securities by or on behalf of the Company, or in
any other manner, such that the Commission does not permit such registration statement to become
effective and used for resales in a manner that does not constitute such an offering and that
permits the continuous resale at the market by the Holders participating therein (or as otherwise
may be acceptable to each Holder) without being named therein as an “underwriter,” then the Company
shall reduce the number of shares to be included in such registration statement until such time as
the Commission shall so permit such registration statement to become effective as aforesaid. In
making such reduction, the Company shall then reduce the number of shares to be included by all
Holders of Registrable Securities on a pro rata basis (based upon the number of Registrable
Securities otherwise required to be included for each such Holder). As soon as reasonably
practicable thereafter (as permitted by the
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Commission), the Company shall register the additional Registrable Securities on such additional
registration statements as may be required to register the resale of all of the Registrable
Securities (to the extent it can without causing the foregoing problem). In no event shall a Holder
be required to be named as an “underwriter” in a registration statement without such Holder’s prior
written consent.
2.2 Expenses of Registration. All reasonable Registration Expenses incurred in
connection with any registration, qualification or compliance hereunder shall be borne by the
Company. All Selling Expenses incurred in connection with any registrations hereunder, shall be
borne by the Holders of the Registrable Securities so registered pro rata on the basis of the
number of shares so registered.
2.3 Additional Obligations of the Company. The Company shall:
(a) After the closing of the sale of the Common Stock and the Warrant (the “Closing Date”),
prepare and file with the SEC a registration statement on Form S-3 (or on Form S-1, if the Company
is not eligible to use Form S-3), and all amendments and supplements thereto and related
prospectuses as may be necessary to comply with applicable securities laws, with respect to such
Registrable Securities and use its best efforts to cause such registration statement to become
effective within six (6) months after the Closing Date (provided that at least three (3) Trading
Days before filing a registration statement or prospectus or any amendments or supplements thereto,
the Company shall furnish to the counsel selected by the Holders of a majority of the Registrable
Securities covered by such registration statement copies of all such documents proposed to be
filed, and the Company shall in good faith consider any reasonable comments of such counsel).
(b) Promptly notify the Holders (i) when the Company has been notified by the Commission
whether or not a registration statement or any amendment thereto will be subject to a review by the
Commission and (ii) if reviewed, when the Company has been notified by the Commission that a
registration statement or amendment thereto will not be subject to further review. Upon the request
of a Holder, the Company shall provide such Holder true and complete copies of all correspondence
from and to the Commission relating to a registration statement (with all material, non-public
information regarding the Company redacted from such copies). The Company shall respond as promptly
as reasonably practicable to any comments received from the Commission with respect to the
registration statement or any amendments thereto. The Company shall promptly file with the
Commission a request for acceleration of effectiveness in accordance with Rule 461 promulgated
under the Securities Act after the Company is notified (orally or in writing, whichever is earlier)
by the Commission that a registration statement will not be reviewed, or will not be subject to
further review, such that the Registration Statement shall be declared effective no later than
seven (7) Trading Days after such notification.
(c) Furnish to the Investors and 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 Registrable
Securities owned by them.
(d) Use its commercially reasonable 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 unless an exemption from registration and
qualification exists; provided that the Company shall not be required in connection therewith or as
a condition thereto to qualify to do business, file a general consent to service of process or
subject itself to general taxation in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and perform its obligations
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under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of
such offering. Each Investor and/or Holder participating in such underwriting shall also enter into
and perform its obligations under such an agreement.
(f) Promptly notify each Investor who holds, and each Holder of Registrable Securities covered
by the 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 light of the circumstances then existing (provided
that in no event shall such notice contain any material, non-public information regarding the
Company) and, the Company shall promptly prepare and furnish to each such Holder a reasonable
number of copies of a supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue
statement of a material fact or omit to state a fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made.
(g) Use its commercially reasonable efforts to furnish, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities are being sold through
underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for
the purposes of such registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter dated as
of such date, from the independent registered public accountants of the Company, in form and
substance as is customarily given by independent registered public accountants to underwriters in
an underwritten public offering addressed to the underwriters.
(h) Use its commercially reasonable efforts to (i) prevent the issuance of any stop order or
other suspension of effectiveness of a registration statement, or the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction in the United
States, and (ii) in the event of the issuance of any stop order suspending the effectiveness of a
registration statement, or any order suspending or preventing the use of any related prospectus or
suspending the qualification of any equity securities included in such registration statement for
sale in any jurisdiction, the Company shall use its commercially reasonable efforts promptly to
obtain the withdrawal of such order.
(i) Use its commercially reasonable efforts to cooperate with the Holders who hold Registrable
Securities being offered and, to the extent applicable, facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing the Registrable
Securities to be offered pursuant to a Registration Statement and enable such certificates to be in
such denominations or amounts, as the case may be, as the Holders may reasonably request and,
registered in such names as the Holders may request.
(j) Provide and cause to be maintained a registrar and transfer agent for all Registrable
Securities covered by any registration statement from and after a date not later than the effective
date of such registration statement.
(k) Use its commercially reasonable efforts to maintain eligibility to use Form S-3 (or any
successor form thereto) for the registration of the resale of the Registrable Securities.
(l) Not, nor shall any Subsidiary or affiliate thereof, identify any Investor as an
underwriter in any public disclosure or filing with the SEC without the Investor’s written consent,
and any Investor being deemed an underwriter by the SEC shall not relieve the Company of any
obligations it has under this Agreement or any other transaction document contemplated by the Plan.
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2.4 Suspension of Sales. Upon receipt of written notice from the Company that the
registration statement or a prospectus contains 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 (a “Misstatement”), each Investor who holds, and each Holder of, Registrable Securities
shall forthwith discontinue disposition of Registrable Securities until such Investor and/or Holder
has received copies of the supplemented or amended prospectus that corrects such Misstatement, or
until such Investor and/or Holder is advised in writing by the Company that the use of the
prospectus may be resumed, and, if so directed by the Company, such Investor and/or Holder shall
deliver to the Company all copies, other than permanent file copies then in such Investor’s or
Holder’s possession, of the prospectus covering such Registrable Securities current at the time of
receipt of such notice. The Company will not suspend the sales under the prospectus more than two
times in any three hundred-sixty-five (365) day period and the total number of days that any such
suspension may be in effect in any three hundred-sixty-five (365) day period shall not exceed 90
days.
2.5 Termination of Registration Rights. An Investor’s and a Holder’s registration
rights shall expire if all Registrable Securities held by such Investor or Holder (and its
Affiliates, partners, members and former members) may be sold pursuant to Rule 144 without the
requirement to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation
pursuant to Rule 144 (or any successor thereto) under the Securities Act, after taking into account
any Holder’s status as an Affiliate of the Company as determined by counsel to the Company pursuant
to a written opinion letter addressed to the Company’s transfer agent to such effect (provided at
least 12 months have lapsed since the Registrable Securities were acquired form the Company, as
calculated in accordance with Rule 144). Termination of such registration rights shall be
conditioned upon the Company’s action to remove the restrictive legends from any Registrable
Securities held by such Investor or Holder and the reissuance of unlegended certificates, in
physical or electronic format, to such Investor or Holder.
2.6 Furnishing Information. It shall be a condition precedent to the obligations of
the Company to take any action pursuant to Section 2.1 or 2.3 that the selling Investors and/or
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 effect the registration of their Registrable Securities.
2.7 Indemnification. In the event any Registrable Securities are included in a
registration statement under this Section 2:
(a) To the extent permitted by law, the Company will indemnify and hold harmless each
Investor, Holder, any underwriter (as defined in the Securities Act) for such Investor or Holder
and each person, if any, who controls such Investor or Holder or underwriter within the meaning of
the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint
or several) to which they may become subject under the Securities Act, or the Exchange 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 Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any state securities law in connection
with the registration of the Registrable Securities; and the Company will pay to each such
Investor, Holder, underwriter or controlling person, as accrued any legal or other expenses
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reasonably incurred by them in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement contained in this
Section 2.7(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 statement by any such Investor, Holder,
underwriter or controlling person or any failure of such person to deliver or cause to be delivered
a prospectus made available by the Company in a timely manner.
(b) To the extent permitted by law and provided that such Holder is not entitled to
indemnification pursuant to Section 2.7(a) above with respect to such matter, each selling Investor
or Holder (severally and not jointly) will indemnify and hold harmless the Company, each of its
directors, officers, persons, if any, who control the Company within the meaning of the Securities
Act, any underwriter, any other Investor or Holder selling securities in such registration
statement and any controlling person of any such underwriter or other Investor or Holder, against
any losses, claims, damages, or liabilities to which any of the foregoing persons may become
subject under the Securities Act, the Exchange 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 (i) untrue statement or alleged untrue statement of a material fact regarding such Holder
and provided in writing by such Holder which is contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any amendments or supplements
thereto or (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, in each case to the
extent (and only to the extent) that such untrue statement or alleged untrue statement or omission
or alleged omission was made in such registration statement, preliminary or final prospectus,
amendment or supplement thereto, in reliance upon and in conformity with written information
furnished by such Investor or Holder expressly for use in connection with such registration
statement; and each such Investor or Holder will pay, as accrued, any legal or other expenses
reasonably incurred by any Person intended to be indemnified pursuant to this Section 2.7(b), in
connection with investigating or defending any such loss, claim, damage, liability, or action as a
result of such Holder’s untrue statement or omission; provided, however, that the indemnity
agreement contained in this Section 2.7(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 Investor or Holder (which consent shall not be unreasonably withheld); provided, that, (x) the
indemnification obligations in this Section 2.7(b) shall be individual and ratable not joint and
several for each Holder and (y) in no event shall the aggregate of all indemnification payments by
any Investor and/or Holder under this Section 2.7(b) exceed the net proceeds from the offering
received by such Investor and/or Holder.
(c) Promptly after receipt by an indemnified party under this Section 2.7 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 2.7,
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
(together with all other indemnified parties which may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the reasonable fees and expenses
of such counsel to be paid by the indemnifying party, if (i) the indemnifying party shall have
failed to assume the defense of such claim within seven (7) days after receipt of notice of the
claim and to employ counsel reasonably satisfactory to such indemnified party, as the case
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may be; or (ii) in the reasonable opinion of counsel retained by the indemnifying party,
representation of such indemnified party by such counsel would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party represented by
such counsel in such proceeding. The indemnified party shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such action or claim by the indemnifying
party and shall furnish to the indemnifying party all information reasonably available to the
indemnified party which relates to such action or claim. The indemnifying party shall keep the
indemnified party reasonably apprised of the status of the defense or any settlement negotiations
with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim
or proceeding effected without its prior written consent; provided, however, that the indemnifying
party shall not unreasonably withhold, delay or condition its consent. The failure to deliver
written notice to the indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the indemnified party under
this Section 2.8, except to the extent such failure to give notice has a material adverse effect on
the ability of the indemnifying party to defend such action.
(d) If the indemnification provided for in this Section 2.7 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim,
damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions that resulted in such
loss, liability, claim, damage, or expense as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the indemnifying party
or by the indemnified party and the parties’ relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission. Notwithstanding the foregoing, the
amount any Investor or Holder will be obligated to contribute pursuant to this Section 2.7(d) will
be limited to an amount equal to the per share public offering price (less any underwriting
discount and commissions) multiplied by the number of shares of Registrable Securities sold by such
Investor or Holder pursuant to the registration statement which gives rise to such obligation to
contribute (less the aggregate amount of any damages which such Investor or Holder has otherwise
been required to pay in respect of such loss, liability, claim, damage, or expense or any
substantially similar loss, liability, claim, damage, or expense arising from the sale of such
Registrable Securities). No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution hereunder from any person who
was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company and Holders under this Section 2.7 shall survive the
completion of any offering of Registrable Securities in a registration statement under this Section
2, and otherwise.
2.8 Assignment of Registration Rights. The rights to cause the Company to register
Registrable Securities pursuant to this Agreement may be assigned by an Investor or Holder to a
transferee or assignee of Registrable Securities to which (a) such transferee is an investment
advisory client, Affiliate, subsidiary or parent company, family member or family trust for the
benefit of a party hereto, (b) such transferee shares a common discretionary investment advisor
with such Investor or Holder, or (c) such transferee or transferees are partners or members of an
Investor or Holder, who agree to act through a single representative; provided, however, (i) the
transferor shall furnish to the Company written notice of the name and address of such transferee
or assignee and the securities with respect to which such registration rights are being assigned
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and (ii) such transferee shall agree to be subject to all restrictions set forth in this Agreement.
2.9 Rule 144 Reporting. With a view to making available to the Investors and Holders
the benefits of certain rules and regulations of the SEC which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees to use its best
efforts to:
(a) make and keep public information available, as those terms are understood and defined in
SEC Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times
after the effective date of this Agreement;
(b) file with the SEC, in a timely manner, all reports and other documents required of the
Company under the Exchange Act; and
(c) so long as an Investor or Holder owns any Registrable Securities, furnish to such Investor
or Holder forthwith upon request: a written statement by the Company as to its compliance with the
reporting requirements of Rule 144 under the Securities Act, and of the Exchange Act; a copy of the
most recent annual or quarterly report of the Company; and such other reports and documents as an
Investor or Holder may reasonably request in availing itself of any rule or regulation of the SEC
allowing it to sell any such securities without registration.
2.10 Obligations of the Holders
(a) Each Holder shall furnish in writing to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such registration as the
Company may reasonably request. In connection therewith, upon the execution of this Agreement, each
Holder shall complete, execute and deliver to the Company a selling securityholder notice and
questionnaire in form reasonably satisfactory to the Company. At least five (5) business days prior
to the first anticipated filing date of any Registration Statement, the Company shall notify each
Holder of any additional information the Company requires from such Holder if such Holder elects to
have any of the Registrable Securities included in the Registration Statement. A Holder shall
provide such information to the Company at least two (2) business days prior to the first
anticipated filing date of such Registration Statement if such Holder elects to have any of the
Registrable Securities included in the Registration Statement.
(b) Each Holder, by its acceptance of the Registrable Securities agrees to cooperate with the
Company as reasonably requested by the Company in connection with the preparation and filing of a
Registration Statement hereunder, unless such Holder has notified the Company in writing of its
election to exclude all of its Registrable Securities from such Registration Statement.
(c) Each Holder covenants and agrees that it shall comply with the prospectus delivery
requirements of the 1933 Act as applicable to it in connection with sales of Registrable Securities
pursuant to any Registration Statement.
SECTION 3 MISCELLANEOUS
3.1 Successors and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties (including transferees of any shares of Registrable
Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities
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under or by reason of this Agreement, except as expressly provided in this Agreement.
3.2 Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by the internal laws of the State of
California, without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of California or any other jurisdictions) that would cause the application of
the laws of any jurisdictions other than the State of California.
3.3 Counterparts. 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.
3.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this Agreement.
3.5 Notices. Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given upon personal delivery to
the party to be notified or upon deposit with the United States Post Office, by registered or
certified mail, postage prepaid and addressed to the party to be notified at the address indicated
for such party on the signature page hereof, or at such other address as such party may designate
by ten (10) days’ advance written notice to the other parties.
3.6 Expenses. If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees,
costs and necessary disbursements in addition to any other relief to which such party may be
entitled.
3.7 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement 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 a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each Holder of any
Registrable Securities then outstanding, each future Holder of all such Registrable Securities, and
the Company. No such amendment shall be effective to the extent that it applies to less than all of
the holders of the Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.
3.8 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
3.9 Aggregation of Stock. All shares of Registrable Securities held or acquired by any
Investors which are Affiliates shall be aggregated together for the purpose of determining the
availability of any rights under this Agreement.
3.10 Entire Agreement. This Agreement constitutes the full and entire understanding
and agreement between the parties with regard to the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth in the first paragraph hereof.
| “COMPANY” | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| “INVESTOR” | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
11
Exhibit A
12
