EXHIBIT 99.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of January 10,
2001, by and among Intraware, Inc., a Delaware corporation, with headquarters
located at 00 Xxxxxx Xxx, Xxxxxx, Xxxxxxxxxx 00000 (the "COMPANY"), and the
undersigned investors (each, an "INVESTOR" and collectively, the "INVESTORS").
WHEREAS:
A. The Company, the Investors and certain other entities (the "OTHER
INVESTORS") previously entered into that certain Securities Purchase Agreement,
dated as of June 29, 2000 (the "SECURITIES PURCHASE AGREEMENT"), pursuant to
which the Investors and the Other Investors purchased from the Company (I)
shares of the Company's Series A, B and C Convertible Preferred Stock (the
"PREFERRED STOCK"), which are convertible into shares of the Company's common
stock, par value $0.0001 per share (the "COMMON STOCK") and (II) warrants to
purchase shares of Common Stock (the "WARRANTS" and, as exercised, the "WARRANT
SHARES");
B. In connection with the Redemption and Amendment Agreement by and among
the parties hereto of even date herewith (the "REDEMPTION AGREEMENT"), the
parties have agreed, upon the terms and subject to the conditions of the
Redemption Agreement, (i) that the Company shall redeem the shares of Preferred
Stock held by the Investors for an aggregate of $3,758,188.20 in cash and the
issuance of an aggregate of 375,819 shares of Common Stock, as adjusted for any
stock splits, stock dividends, stock combinations or other similar transactions
(the "COMMON SHARES"), and (ii) to amend the terms of the Warrants to decrease
the exercise price;
C. To induce each Investor to execute and deliver the Redemption Agreement,
the Company has agreed to provide certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations thereunder, or
any similar successor statute (collectively, the "1933 ACT"), and applicable
state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each Investor
hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the
following meanings:
a. "HOLDER" means an Investor, any transferee or assignee thereof to
whom an Investor assigns its rights under this Agreement and who agrees to
become bound by the
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provisions of this Agreement in accordance with Section 9 and any transferee or
assignee thereof to whom a transferee or assignee assigns its rights under this
Agreement and who agrees to become bound by the provisions of this Agreement in
accordance with Section 9.
b. "PERSON" means a corporation, a limited liability company, an
association, a partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.
c. "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous basis ("RULE 415"), and the declaration or ordering
of effectiveness of such Registration Statement(s) by the United States
Securities and Exchange Commission (the "SEC").
d. "REGISTRABLE SECURITIES" means the Common Shares and the Warrant
Shares issued or issuable to the Investors upon exercise of the Warrants and any
shares of capital stock issued or issuable with respect to the Common Shares,
such Warrant Shares or the Warrants held by the Investors as a result of any
stock split, stock dividend, recapitalization, exchange or similar event or
otherwise, in each case without regard to any limitation on exercises of the
Warrants.
e. "REGISTRATION STATEMENT" means a registration statement of the
Company filed under the 1933 Act.
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Redemption Agreement.
2. REGISTRATION.
a. MANDATORY REGISTRATION. The Company shall prepare, and, as soon as
practicable but in no event later than 5 days after the Closing Date (as defined
in the Redemption Agreement) (the "MANDATORY FILING DATE"), file with the SEC a
Registration Statement or Registration Statements (as is necessary) on Form S-3
covering the resale of all of the Registrable Securities. In the event that Form
S-3 is unavailable for such a registration, the Company shall use such other
form as is available for such a registration, subject to the provisions of
Section 2(d). The initial Registration Statement prepared pursuant hereto shall
register for resale at least that number of shares of Common Stock equal to the
number of Registrable Securities calculated as of the date immediately preceding
the date the Registration Statement is initially filed with the SEC, subject to
adjustment as provided in Section 3(b). The Company shall use its best efforts
to have the Registration Statement declared effective by the SEC as soon as
practicable, but in no event later than 65 days after the Closing Date (the
"MANDATORY EFFECTIVE DATE").
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b. ALLOCATION OF REGISTRABLE SECURITIES. The initial number of
Registrable Securities included in any Registration Statement and each increase
in the number of Registrable Securities included therein shall be allocated pro
rata among the Holders based on the number of Registrable Securities held by
each Holder at the time the Registration Statement covering such initial number
of Registrable Securities or increase thereof is last filed with the SEC. In the
event that a Holder sells or otherwise transfers any of such Person's
Registrable Securities, each transferee shall be allocated a pro rata portion of
the then remaining number of Registrable Securities included in such
Registration Statement for such transferor. Any shares of Common Stock included
in a Registration Statement and which remain allocated to any Person which
ceases to hold any Registrable Securities shall be allocated to the remaining
Holders, pro rata based on the number of Registrable Securities then held by
such Holders.
c. LEGAL COUNSEL. Subject to Section 5 hereof, the Investors holding a
majority of the Registrable Securities shall have the right to select one legal
counsel to review and oversee any offering pursuant to this Section 2 ("LEGAL
COUNSEL"). The Company shall reasonably cooperate with Legal Counsel in
performing the Company's obligations under this Agreement.
d. ELIGIBILITY FOR FORM S-3. The Company represents and warrants that
it currently meets the requirements for use of Form S-3 for registration of the
resale of the Registrable Securities, and has no actual knowledge of any facts
which would reasonably cause the Company to fail to meet such requirements. In
the event that Form S-3 is not available for the registration of the resale of
Registrable Securities hereunder, the Company shall (i) register the resale of
the Registrable Securities on another appropriate form, reasonably acceptable to
the holders of a majority of the Registrable Securities, and (ii) undertake to
register the Registrable Securities on Form S-3 as soon as such form is
available, provided that the Company shall maintain the effectiveness of the
Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been declared
effective by the SEC.
e. SUFFICIENT NUMBER OF SHARES REGISTERED. In the event that the
number of shares available under (i) the Registration Statement filed pursuant
to Section 2(a) together with (ii) any Registration Statements filed pursuant to
this Section 2(e) is insufficient to cover the resale of 100% of the Registrable
Securities or a Holder's allocated portion of the registered shares pursuant to
Section 2(b), the Company shall amend any such Registration Statement, or file a
new Registration Statement (on the short form available therefor, if
applicable), or both, so as to cover at least 100% of the Registrable Securities
calculated as of the trading day immediately preceding the date of the filing of
such amendment or new Registration Statement), in each case, as soon as
practicable, but in any event not later than fifteen (15) Business Days after
the necessity therefor arises. The Company shall use its best efforts to cause
such amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof.
f. EFFECT OF FAILURE TO OBTAIN AND MAINTAIN EFFECTIVENESS OF
REGISTRATION STATEMENT. If (i) a Registration Statement covering all the
Registrable Securities and required to
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be filed by the Company pursuant to this Agreement is not declared effective by
the SEC on or before the Mandatory Effective Date or (ii) on any day after the
Registration Statement has been declared effective by the SEC sales of all the
Registrable Securities required to be included on such Registration Statement
cannot be made (other than during an Allowable Grace Period) pursuant to the
Registration Statement (including, without limitation, because of a failure to
keep the Registration Statement effective, to disclose such information as is
necessary for sales to be made pursuant to the Registration Statement or to
register sufficient shares of Common Stock), then, as partial relief for the
damages to any holder by reason of any such delay in or reduction of its ability
to sell Registrable Securities (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each holder of
Registrable Securities an amount in cash per Registrable Security equal to the
product of (i) the Closing Sale Price (as defined in the Certificate of
Designations, Preferences and Rights of the Company's Series A Convertible
Preferred Stock) of the Common Stock on the date of determination multiplied by
(ii) the sum of (A) 0.025, if the Registration Statement is not declared
effective by the Mandatory Effective Date, plus, (B) 0.025, if the Registration
Statement is not declared effective by the 30th day after the Mandatory
Effective Date and 0.025 if the Registration Statement is not declared effective
by each successive 30th day, plus (C) the product of (I) 0.000833 multiplied by
(II) the number of days after the Registration Statement has been declared
effective by the SEC that such Registration Statement is not available (other
than days during an Allowable Grace Period) for the resale of all the
Registrable Securities required to be included on such Registration Statement
pursuant to Section 2(e). The payments to which a holder shall be entitled
pursuant to this Section 2(f) are referred to herein as "REGISTRATION DELAY
PAYMENTS." Registration Delay Payments shall be paid on the earlier of (I) the
last day of the calendar month during which such Registration Delay Payments are
incurred and (II) the third business day after the event or failure giving rise
to the Registration Delay Payments is cured. In the event the Company fails to
make Registration Delay Payments in a timely manner, such Registration Delay
Payments shall bear interest at the rate of 2.0% per month (prorated for partial
months) until paid in full.
3. RELATED OBLIGATIONS.
In connection with the Company's obligation to file a Registration
Statement with the SEC pursuant to Section 2(a) or 2(e), the Company shall have
the following obligations:
a. The Company shall submit to the SEC, within two business days after
the Company learns that no review of a particular Registration Statement will be
made by the staff of the SEC or that the staff has no further comments on a
Registration Statement, as the case may be, a request for acceleration of
effectiveness of such Registration Statement to a time and date not later than
48 hours after the submission of such request. The Company shall keep a
Registration Statement effective pursuant to Rule 415 at all times until the
earlier of (i) the date as of which none of the Warrants is outstanding and the
Holders shall have sold all the Registrable Securities or (ii) the date as of
which all the Holders may sell all of the Registrable Securities pursuant to
Rule 144(k) under the 1933 Act (or any successor thereto) (the "REGISTRATION
PERIOD"). The Company shall insure that each Registration Statement (including
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any amendments or supplements thereto and prospectuses contained therein) shall
not contain any 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,
in light of the circumstances in which they were made, not misleading.
b. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with such Registration
Statement, which prospectus is to be filed pursuant to Rule 424 promulgated
under the 1933 Act, as may be necessary to keep such Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by such Registration Statement
until such time as all of such Registrable Securities shall have been disposed
of in accordance with the intended methods of disposition by the seller or
sellers thereof as set forth in such Registration Statement or pursuant to Rule
144 under the 1933 Act. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company filing a
report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the
Securities Exchange Act of 1934, as amended (the "1934 ACT"), the Company shall
have incorporated such report by reference into the Registration Statement, if
applicable, or shall file such amendments or supplements with the SEC on the
same day on which the 1934 Act report is filed which created the requirement for
the Company to amend or supplement the Registration Statement. Without limiting
the generality of the obligation set forth in this Section 3(b), the Company
shall, from time to time, file a supplement to the prospectus included in a
Registration Statement which updates the information contained in the
Registration Statement relating to (i) the total number of Warrants outstanding,
(ii) the exercise price of the Warrants, (iii) the total number of shares of
Common Stock issuable upon exercise of all outstanding Warrants, (iv) the number
of shares of Common Stock beneficially owned by each Holder whose shares are
included in the Registration Statement, and (v) the number of shares of Common
Stock being offered by each Holder whose shares are included in the Registration
Statement. The Company shall file any such supplement with the SEC under Rule
424(b)(3) of the 1933 Act, or if the supplement may not be filed under Rule
424(b)(3) of the 1933 Act, then under such other applicable provisions of the
1933 Act.
c. The Company shall permit Legal Counsel to review and comment upon a
Registration Statement and all amendments and supplements thereto at least five
business days prior to their filing with the SEC, and not file any document in a
form to which Legal Counsel reasonably objects. The Company shall not submit a
request for acceleration of the effectiveness of a Registration Statement or any
amendment or supplement thereto without the prior approval of Legal Counsel,
which consent shall not be unreasonably withheld. The Company shall furnish to
Legal Counsel, without charge, (i) any correspondence from the SEC or the staff
of the SEC to the Company or its representatives relating to any Registration
Statement, (ii) promptly after the same is prepared and filed with the SEC, one
copy of any Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits and (iii) upon the effectiveness of any Registration
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Statement, one copy of the prospectus included in such Registration Statement
and all amendments and supplements thereto.
d. The Company shall furnish to each Holder whose Registrable
Securities are included in any Registration Statement, without charge, (i)
promptly after the same is prepared and filed with the SEC, at least one copy of
such Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits (ii) upon the effectiveness of any Registration Statement, ten
copies of the prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies as such
Holder may reasonably request) and (iii) such other documents, including copies
of any preliminary or final prospectus, as such Holder may reasonably request
from time to time in order to facilitate the disposition of the Registrable
Securities owned by such Holder.
e. The Company shall use its best efforts to (i) register and qualify,
unless an exemption from registration or qualification applies, all the
Registrable Securities covered by a Registration Statement under all securities
or "blue sky" laws of such jurisdictions in the United States, (ii) prepare and
file in those jurisdictions, such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof during the Registration Period,
(iii) take such other actions as may be necessary to maintain such registrations
and qualifications in effect at all times during the Registration Period, and
(iv) take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify
Legal Counsel and each Holder who holds Registrable Securities of the receipt by
the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.
f. The Company shall (i) notify Legal Counsel and each Holder in
writing (provided that in no event shall such notice include any material,
nonpublic information) as promptly as practicable upon its discovery that the
prospectus included in a Registration Statement, as then in effect, includes an
untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, (ii)
promptly prepare a supplement or amendment to such Registration Statement to
correct such untrue statement or omission, and (iii) deliver ten copies of such
supplement or amendment to Legal Counsel and each Holder (or such other number
of copies as Legal Counsel or such Holder may reasonably request). The Company
shall also promptly notify Legal Counsel and each Holder in writing (provided
that in no event shall such notice include any material, nonpublic information)
(x) when a prospectus or any prospectus supplement or post-effective amendment
has been filed, and
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when a Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to Legal
Counsel and each Holder by facsimile on the same day of such effectiveness and
by overnight mail), (y) of any request by the SEC for amendments or supplements
to a Registration Statement or related prospectus or related information, and
(z) of the Company's reasonable determination that a post-effective amendment to
a Registration Statement would be appropriate.
g. The Company shall use its best efforts to 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 and, if such an order or suspension is issued, to
obtain the withdrawal of such order or suspension at the earliest possible
moment and to notify (provided that in no event shall such notification include
any material, nonpublic information) Legal Counsel and each Holder who holds
Registrable Securities being sold of the issuance of such order and the
resolution thereof or its receipt of actual notice of the initiation or threat
of any proceeding for such purpose.
h. At the reasonable request of any Holder, the Company shall furnish
to such Holder, on the date of the effectiveness of the Registration Statement
and thereafter from time to time on such dates as a Holder may reasonably
request (i) a letter, dated such date, from the Company's independent certified
public accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the Holders, and (ii) an opinion, dated as of such date, of counsel
representing the Company for purposes of such Registration Statement, in form,
scope and substance as is customarily given in an underwritten public offering,
addressed to the Holders.
i. The Company shall make available for inspection by (i) any Holder,
(ii) Legal Counsel and (iii) one firm of accountants or other agents retained by
the Holders (collectively, the "INSPECTORS") all pertinent financial and other
records, and pertinent corporate documents and properties of the Company
(collectively, the "RECORDS"), as shall be reasonably deemed necessary by each
Inspector, and cause the Company's officers, directors and employees to supply
all information which any Inspector may reasonably request; provided, however,
that each Inspector shall hold in strict confidence and shall not make any
disclosure (except to a Holder) or use of any Record or other information which
the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required under the 1933 Act, (b) the
release of such Records is ordered pursuant to a final, non-appealable subpoena
or order from a court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement of which
the Inspector has knowledge. Each Holder agrees that it shall, upon learning
that disclosure of such Records is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the Records
deemed confidential.
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j. The Company shall hold in confidence and not make any
disclosure of information concerning a Holder provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning a Holder is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt written
notice to such Holder and allow such Holder, at the Holder's expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.
k. The Company shall use its best efforts either to (i) cause all the
Registrable Securities covered by a Registration Statement to be listed on each
securities exchange on which securities of the same class or series issued by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii) secure
designation and quotation of all the Registrable Securities covered by the
Registration Statement on the Nasdaq National Market System or, if, despite the
Company's best efforts to satisfy the preceding clause (i) or (ii), the Company
is unsuccessful in satisfying the preceding clause (i) or (ii), to secure the
inclusion for quotation on The Nasdaq SmallCap Market for such Registrable
Securities and, without limiting the generality of the foregoing, to arrange for
at least two market makers to register with the National Association of
Securities Dealers, Inc. ("NASD") as such with respect to such Registrable
Securities. The Company shall pay all fees and expenses in connection with
satisfying its obligation under this Section 3(k).
l. The Company shall cooperate with the Holders who hold Registrable
Securities being offered to 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.
m. The Company shall provide a transfer agent and registrar of all
such Registrable Securities not later than the effective date of such
Registration Statement.
n. If requested by a Holder, the Company as promptly as practicable
shall: (i) incorporate in a prospectus supplement or post-effective amendment
such information as a Holder requests to be included therein relating to the
sale and distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being offered
or sold, the purchase price being paid therefor, the persons selling the
Registrable Securities and any other terms of the offering of the Registrable
Securities; (ii) make all required filings of such prospectus supplement or
post-effective
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amendment as soon as notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment; and (iii) supplement or make
amendments to any Registration Statement if requested by a holder of such
Registrable Securities.
o. The Company shall use its best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to consummate the disposition of such Registrable Securities.
p. The Company shall make generally available to its security holders
as soon as practical, but not later than 90 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the 0000 Xxx) covering a twelve-month period beginning not later
than the first day of the Company's fiscal quarter next following the effective
date of the Registration Statement.
q. The Company shall otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any registration
hereunder.
r. Within two (2) business days after the Registration Statement which
includes the Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Holders whose
Registrable Securities are included in such Registration Statement) confirmation
that the Registration Statement has been declared effective by the SEC in the
form attached hereto as EXHIBIT A.
s. The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Holders of Registrable Securities
pursuant to a Registration Statement.
t. Notwithstanding anything to the contrary in Section 3(f), at any
time after the Registration Statement has been declared effective by the SEC,
the Company may delay the disclosure of material non-public information
concerning the Company, the disclosure of which at the time is not, in the good
faith opinion of the Board of Directors of the Company and its counsel, in the
best interest of the Company and, in the opinion of counsel to the Company,
otherwise required (a "GRACE PERIOD"); provided, that the Company shall promptly
(i) notify the Holders in writing of the existence of material non-public
information giving rise to a Grace Period (provided that in each notice the
Company will not disclose the content of such material non-public information to
the Holders) and the date on which the Grace Period will begin, and (ii) notify
the Holders in writing of the date on which the Grace Period ends; and, provided
further, that no Grace Period shall exceed 15 consecutive days, such Grace
Periods shall not exceed an aggregate of 30 days during any consecutive 365 day
period and the first day of any Grace Period must be at least thirty trading
days after the last day of any prior Grace Period (an "ALLOWABLE GRACE PERIOD").
For purposes of determining the length of a Grace Period above, the Grace Period
shall begin on and include the date the holders receive the notice referred
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to in clause (i) and shall end on and include the later of the date the holders
receive the notice referred to in clause (ii) and the date referred to in such
notice. The provisions of Section 3(g) shall not be applicable during the period
of any Allowable Grace Period. In the event of any Grace Period, the Expiration
Date (as defined in the Warrants) shall be delayed one day for each day in the
Grace Period as provided in Section 1(b)(x) of the Warrants. Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to deliver
unlegended shares of Common Stock to a transferee of a Holder in accordance with
the terms of the Redemption Agreement in connection with any sale of Registrable
Securities with respect to which a Holder has entered into a contract for sale
prior to the Holder's receipt of the notice of a Grace Period and for which the
Holder has not yet settled.
4. OBLIGATIONS OF THE HOLDERS.
a. At least three business days prior to the first anticipated filing
date of a Registration Statement, the Company shall notify each Holder in
writing of the information the Company requires from each such Holder if such
Holder elects to have any of such Holder's Registrable Securities included in
such Registration Statement. It shall be a condition precedent to the
obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Holder that
such Holder shall furnish 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.
b. Each Holder, by such Holder's 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 any Registration
Statement hereunder, unless such Holder has notified the Company in writing of
such Holder's election to exclude all of such Holder's Registrable Securities
from such Registration Statement.
c. Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(g) or
the first sentence of 3(f), such Holder will immediately discontinue disposition
of Registrable Securities pursuant to any Registration Statement(s) covering
such Registrable Securities until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(g) or the first
sentence of 3(f) or receipt of notice that no supplement or amendment is
required. Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver unlegended shares of Common Stock to a transferee of a
Holder in accordance with the terms of the Redemption Agreement, in the case of
Common Shares, or the Securities Purchase Agreement, in the case of Warrant
Shares, in connection with any sale of Registrable Securities with respect to
which a Holder has entered into a contract for sale prior to the Holder's
receipt of a notice from the Company of the happening of any event of the kind
described in Section 3(g) or the first sentence of 3(f) and for which the Holder
has not yet settled.
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5. EXPENSES OF REGISTRATION.
All reasonable expenses, other than underwriting discounts and
brokerage commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company shall be paid by the Company.
[The Company also shall reimburse the Holders for fees and disbursements of
Legal Counsel in connection with registration filing or qualification
pursuant to Sections 2 and 3 of this Agreement up to $10,000.] [This sentence
is applicable only to the agreement with Xxxxxx Capital Ltd. and Xxxxxxx
Capital Ltd.]
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
a. To the fullest extent permitted by law, the Company will,
and hereby does, indemnify, hold harmless and defend each Holder, the directors,
officers, partners, employees, agents, representatives of, and each Person, if
any, who controls any Holder within the meaning of the 1933 Act or the 1934 Act
(each, an "INDEMNIFIED PERSON"), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, attorneys' fees,
amounts paid in settlement or expenses, joint or several, (collectively,
"CLAIMS") incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by
or before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto ("INDEMNIFIED DAMAGES"), to which any of them
may become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any filing
made in connection with the qualification of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registrable Securities are
offered ("BLUE SKY FILING"), or the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement and not corrected in any final
prospectus delivered to the Holder in a timely manner, or contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading, (iii) any violation or alleged violation by the Company of
the 1933 Act, the 1934 Act, any other law, including, without limitation, any
state securities law, or any rule or regulation thereunder relating to the offer
or sale of the Registrable Securities pursuant to a Registration Statement or
(iv) any material violation of this Agreement (the matters in the foregoing
clauses (i) through (iv) being, collectively, "VIOLATIONS"). The Company shall
reimburse the Indemnified Persons, promptly as such expenses are incurred and
are due and payable, for any legal fees or other
11
reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i) shall
not apply to a Claim by an Indemnified Person arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Indemnified Person expressly for use
in connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(d); (ii) shall not be available
to the extent such Claim is based on a failure of the Holder to deliver or to
cause to be delivered the prospectus made available by the Company, if such
prospectus was timely made available by the Company pursuant to Section 3(d);
and (iii) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Registrable Securities
by the Holders pursuant to Section 9.
b. In connection with any Registration Statement in which a Holder is
participating, each such Holder agrees to severally and not jointly indemnify,
hold harmless and defend, to the same extent and in the same manner as is set
forth in Section 6(a), the Company, each of its directors, each of its officers
who signs the Registration Statement, each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act (each an "INDEMNIFIED
PARTY") any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or
Indemnified Damages arise out of or are based upon any Violation, in each case
to the extent, and only to the extent, that such Violation occurs in reliance
upon and in conformity with written information furnished to the Company by such
Holder expressly for use in connection with such Registration Statement; and,
subject to Section 6(d), such Holder will reimburse any legal or other
reasonable expenses incurred by them in connection with investigating or
defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 6(b) and the agreement with respect to contribution
contained in Section 7 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of such
Holder, which consent shall not be unreasonably withheld; provided, further,
however, that the Holder shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified Damages as does not exceed the net proceeds to
such Holder as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable Securities by the Holders
pursuant to Section 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any prospectus shall not inure to the benefit of any Indemnified
Party if the untrue statement or omission of material fact contained in the
prospectus was corrected on a timely basis in the prospectus, as then amended or
supplemented.
c. Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a Claim,
such Indemnified Person or Indemnified
12
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, 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
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the fees and expenses to be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding. The Company shall pay reasonable fees for only one
separate legal counsel for the Holders, and such legal counsel shall be selected
by the Holders holding a majority in interest of the Registrable Securities
included in the Registration Statement to which the Claim relates. The
Indemnified Party or Indemnified Person 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 or
Indemnified Person which relates to such action or Claim. The indemnifying party
shall keep the Indemnified Party or Indemnified Person fully apprised at all
times as to 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. No indemnifying party shall, without the prior
written consent of the Indemnified Party or Indemnified Person, consent to entry
of any judgment or enter into any settlement or other compromise which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such Claim or litigation. Following indemnification as provided
for hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been made.
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 Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action.
d. The indemnification required by this Section 6 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 Indemnified Damages are incurred.
e. The indemnity agreements contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party or Indemnified
Person against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.
13
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no seller of Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities pursuant to such
Registration Statement.
8. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Holders the benefits of Rule
144 promulgated under the 1933 Act or any other similar rule or regulation of
the SEC that may at any time permit the Holders to sell securities of the
Company to the public without registration ("RULE 144"), the Company agrees to:
a. make and keep public information available, as those terms are
understood and defined in Rule 144;
b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such requirements (it being understood that
nothing herein shall limit the Company's obligations under Section 4(c) of the
Securities Purchase Agreement and Section 4(b) of the Redemption Agreement) and
the filing of such reports and other documents is required for the applicable
provisions of Rule 144; and
c. furnish to each Holder so long as such Holder owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the 1933 Act and
the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested to permit the Holders to
sell such securities pursuant to Rule 144 without registration.
14
9. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights under this Agreement shall be automatically assignable by
the Holders to any transferee of all or any portion of Registrable Securities
if: (i) the Holder agrees in writing with the transferee or assignee to assign
such rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment; (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned;
(iii) immediately following such transfer or assignment the further disposition
of such securities by the transferee or assignee is restricted under the 1933
Act and applicable state securities laws; (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence the
transferee or assignee provides the Company with a writing agreeing to be bound
by all of the provisions contained herein; and (v) such transfer shall have been
made in accordance with the applicable requirements of the Securities Purchase
Agreement, in the case of the Warrants and the Warrant Shares, or the Redemption
Agreement, in the case of the Common Shares.
10. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and Holders who then hold a majority of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon each Holder 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.
11. MISCELLANEOUS.
a. A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from the registered owner of such Registrable Securities.
b. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one business day after deposit with an overnight
courier service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:
15
If to the Company:
Intraware, Inc.
00 Xxxxxx Xxx
Xxxxxx, Xxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile:000-000-0000
Attention: President
With a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
If to Legal Counsel:
Xxxxxx Xxxxxx Xxxxx
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Telephone: 000-000-0000
Facsimile: 312-902-1061
Attention: Xxxxxx X. Xxxxxxxx, Esq.
If to an Investor, to its address and facsimile number set forth on the Schedule
of Investors attached hereto, with copies to such Investor's representatives as
set forth on the Schedule of Investors, or to such other address and/or
facsimile number and/or to the attention of such other person as the recipient
party has specified by written notice given to each other party five days prior
to the effectiveness of such change. Written confirmation of receipt (A) given
by the recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from
an overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
c. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
d. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by the internal laws of
the State of Illinois,
16
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Illinois or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of
Illinois. Each party hereby irrevocably submits to the non-exclusive
jurisdiction of the state and federal courts sitting in the City of Chicago, for
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
Each party hereby irrevocably waives any right it may have, and agrees not to
request, a jury trial for the adjudication of any dispute hereunder or in
connection herewith or arising out of this Agreement or any transaction
contemplated hereby.
e. This Agreement, the Redemption Agreement and the Transaction
Documents (as defined in the Redemption Agreement) constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and
thereof. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein and therein. This Agreement, the
Redemption Agreement and the Transaction Documents supersede all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.
f. Subject to the requirements of Section 9, this Agreement shall
inure to the benefit of and be binding upon the permitted successors and assigns
of each of the parties hereto.
g. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in identical counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
i. Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the
17
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
j. All consents and other determinations to be made by the Holders
pursuant to this Agreement shall be made, unless otherwise specified in this
Agreement, by Holders holding a majority of the Registrable Securities.
k. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.
l. This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.
* * * * * *
18
IN WITNESS WHEREOF, each Investor and the Company have caused this
Registration Rights Agreement to be duly executed as of day and year first above
written.
COMPANY:
INTRAWARE, INC.
By:
----------------------------------
Name:
--------------------
Title:
--------------------
19
SCHEDULE OF INVESTORS
[For agreement w/ Xxxxxx and Xxxxxxx]
HOLDER NAME INVESTOR'S ADDRESS
AND FACSIMILE NUMBER
---------------------------------- ---------------------------------------
Xxxxxx Capital Ltd. "Citadel Investment Group, L.L.C.
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Xxxxxxx Capital Ltd. "Citadel Investment Group, L.L.C.
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
SCHEDULE OF INVESTORS
[For agreement w/ HFTP]
HFTP Investment c/o Promethean Asset Management, L.L.C.
L.L.C. 000 Xxxxxxxxx Xxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Residence: New York
(REPRESENTATIVES)
Xxxxxx Xxxxxx Xxxxx
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
SCHEDULE OF INVESTORS
[For agreement w/ Xxxxxxxx Capital]
Xxxxxxxx Capital Xxxxxxxx Capital Management, Inc.
Management, Inc. c/o Credit Suisse First Boston
00 Xxxxxxx Xxx., 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx
Xxxxxxx Xxxxxxxxxxxx
Telephone: (000) 000-0000
(000) 000-0000
Facsimile: (000) 000-0000
(000) 000-0000
Residence: New York
(REPRESENTATIVES)
Solomon, Zauderer, Ellenhorn,
Xxxxxxxx & Xxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
Attn:
Re: Intraware, Inc.
Ladies and Gentlemen:
We are counsel to Intraware, Inc., a Delaware corporation (the
"COMPANY"), and have represented the Company in connection with that certain
Redemption and Amendment Agreement (the "REDEMPTION AGREEMENT") entered into by
and among the Company and the investors named therein (collectively, the
"INVESTORS") pursuant to which the Company issued to the Investors shares of its
common stock, par value $0.0001 per share (the "COMMON STOCK"), and that certain
Securities Purchase Agreement, dated as of June 29, 2000, by and among the
Company, the Investors and certain other buyers pursuant to which the Company
issued to the Investors warrants to purchase shares of the Common Stock (the
"WARRANTS"). Pursuant to the Redemption Agreement, the Company also has entered
into a Registration Rights Agreement with the Investors (the "REGISTRATION
RIGHTS AGREEMENT") pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined in the Registration Rights
Agreement), including the shares of Common Stock issued pursuant to the
Redemption Agreement and issuable upon exercise of the Warrants, under the
Securities Act of 1933, as amended (the "1933 ACT"). In connection with the
Company's obligations under the Registration Rights Agreement, on ____________
___, 200__, the Company filed a Registration Statement on Form S-3 (File No.
333-_____________) (the "REGISTRATION STATEMENT") with the Securities and
Exchange Commission (the "SEC") relating to the Registrable Securities which
names each of the Investors as a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[ISSUER'S COUNSEL]
By:
-----------------------
cc: [LIST NAMES OF HOLDERS]
