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Exhibit 4.3
THIS WARRANT AND THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS, HAVE BEEN
TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR TRANSFERRED OR OFFERED FOR SALE OR
TRANSFER UNLESS A REGISTRATION STATEMENT UNDER SUCH ACT AND OTHER APPLICABLE
SECURITIES LAWS WITH RESPECT TO SUCH SECURITIES IS THEN IN EFFECT, OR IN THE
OPINION OF COUNSEL (WHICH OPINION IS REASONABLY SATISFACTORY TO THE ISSUER OF
THESE SECURITIES), SUCH REGISTRATION UNDER SUCH ACT AND OTHER APPLICABLE
SECURITIES LAWS IS NOT REQUIRED.
December 7, 1999 Warrant to Purchase
12,500
Shares
Wavo Corporation
(Incorporated under the laws of the State of Indiana)
WARRANT CERTIFICATE FOR THE PURCHASE OF SHARES OF
THE NO PAR VALUE COMMON STOCK OF WAVO CORPORATION
Warrant Price: $4.65 per share subject to adjustment as provided below.
THIS IS TO CERTIFY that, for value received, Xxxxx X. Xxxxxxxx or its
registered assigns (either or both of whom are referred to herein as the
"Holder"), is entitled to purchase, subject to the terms and conditions
hereinafter set forth, up to 12,500 shares of the no par value common stock
("Common Stock") of Wavo Corporation, an Indiana corporation (the "Company"),
and to receive certificate(s) for the Common Stock so purchased.
1. EXERCISE PERIOD AND VESTING. The "Exercise Period" is the period
beginning on the date of this Warrant (the "Issuance Date") and ending at 5:00
p.m., Dallas, Texas time, on December 7, 2002. This Warrant will terminate
automatically and immediately upon the expiration of the Exercise Period. The
Warrants represented by this Certificate shall vest on February 15, 2000, unless
prior to such date the Company terminates in writing that certain letter
agreement, dated as of December 7, 1999, by and between the Company and
Stonegate Securities, Inc. due to Stonegate Securities, Inc.'s failure to
satisfactorily perform the services set forth in Section 1 of such letter
agreement. Notwithstanding the above, upon the occurrence of a Change in Control
of the Company, this Warrant shall automatically vest in full. For purposes of
this Warrant, a "Change in Control" of the Company shall be deemed to have
occurred if: (a) any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) is or becomes the "beneficial owner" (as defined in Rule l3d-3
promulgated under the Exchange Act), directly or indirectly, of securities of
the Company representing more than fifty percent (50%) of the combined voting
power of the then outstanding voting securities of the Company; or (b) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation or partnership (or, if no such approval is required,
the consummation of such a merger or consolidation of the Company), other than a
merger or consolidation that would result in the voting securities of the
Company outstanding immediately prior to the consummation thereof continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or of a parent of the surviving entity) a
majority of the combined voting power of the voting securities of the surviving
entity (or its parent) outstanding immediately after that merger or
consolidation; or (c) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets (or, if no such
approval is required, the consummation of such a liquidation, sale, or
disposition in one transaction or series of related transactions), other than a
liquidation, sale or disposition of all or substantially all of the Company's
assets in one transaction or a series of related transactions to a corporation
or other entity owned directly or indirectly by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company; or (d) members of the Board of Directors of the Company as of the date
of this Warrant cease for any reason to constitute at least a majority of the
Board of Directors of the Company
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(excluding any changes made to expand the Board of Directors of the Company or
change existing directors for the purpose of complying with the new Nasdaq
National Market Audit Committee rules).
2. EXERCISE OF WARRANT; CASHLESS EXERCISE. Subject to the vesting
provisions of Section 1, this Warrant may be exercised, in whole or in part, at
any time and from time to time during the Exercise Period. Such exercise shall
be accomplished by tender to the Company of the purchase price set forth above
as the warrant price (the "Warrant Price"), either (a) in cash or by certified
check or bank cashier's check or wire transfer, payable to the order of the
Company, or (b) by surrendering such number of shares of Common Stock received
upon exercise of this Warrant with a current market price equal to the Warrant
Price (a "Cashless Exercise"), together with presentation and surrender to the
Company of this Warrant Certificate with an executed subscription in
substantially the form attached hereto as Exhibit A. Upon receipt of the
foregoing, the Company will deliver to the Holder, as promptly as possible, a
certificate or certificates representing the shares of Common Stock so
purchased, registered in the name of the Holder or its designee. With respect to
any exercise of this Warrant, the Holder will for all purposes be deemed to have
become the holder of record of the number of shares of Common Stock purchased
hereunder on the date this Warrant and payment of the Warrant Price is received
by the Company (the "Exercise Date"), irrespective of the date of delivery of
the certificate evidencing such shares, except that, if the date of such receipt
is a date on which the stock transfer books of the Company are closed, such
person will be deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer books are open.
Fractional shares of Common Stock will not be issued upon the exercise of this
Warrant. In lieu of any fractional shares that would have been issued but for
the immediately preceding sentence, the Holder will be entitled to receive cash
equal to the current market price of such fraction of a share of Common Stock on
the trading day immediately preceding the Exercise Date. In the event this
Warrant is exercised in part, the Company shall issue a new Warrant Certificate
to the Holder covering the aggregate number of shares of Common Stock as to
which this Warrant remains exercisable for.
If the Holder elects to conduct a Cashless Exercise, the Company shall
cause to be delivered to the Holder a certificate or certificates representing
the number of shares of Common Stock equal to (i) the total number of shares of
Common Stock to be purchased upon such Cashless Exercise, minus (ii) the number
of shares surrendered with a current market price on the trading day immediately
preceding the Exercise Date equal to the Warrant Price. For purposes of
determining the value of the underlying shares of Common Stock surrendered in a
Cashless Exercise, the "current market price" of each such shares shall mean for
the day in question: (i) if the principal trading market for such securities is
a national or regional securities exchange, the closing price on such exchange
on such day; or (ii) if sales prices for shares of Common Stock are reported by
the NASDAQ National Market System (or a similar system then in use), the last
reported sales price so reported on such day; or (iii) if neither (i) nor (ii)
above are applicable, and if bid and ask prices for shares of Common Stock are
reported in the over-the-counter market by NASDAQ (or, if not so reported, by
the National Quotation Bureau), the average of the high bid and low ask prices
so reported on such day. Notwithstanding the foregoing, if there is no reported
closing price, last reported sales price, or bid and ask prices, as the case may
be, for the day in question, then the current market price shall be determined
as of the latest date prior to such day for which such closing price, last
reported sales price, or bid and ask prices, as the case may be, are available,
unless such securities have not been traded on an exchange or in the
over-the-counter market for 30 or more days immediately prior to the day in
question, in which case the current market price shall be determined in good
faith by, and reflected in a formal resolution of, the Board of Directors of the
Company.
The Company acknowledges and agrees that this Warrant was issued on the
Issuance Date. Consequently, the Company acknowledges and agrees that, if the
Holder conducts a Cashless Exercise, the period during which the Holder held
this Warrant may, for purposes of Rule 144 promulgated under the Securities Act
of 1933, as amended (the "Securities Act"), be "tacked" to the period during
which the Holder holds the shares of Common Stock received upon such Cashless
Exercise.
3. TRANSFERABILITY AND EXCHANGE.
(a) This Warrant and the Common Stock issuable upon the
exercise hereof may not be sold, transferred, pledged or hypothecated unless the
Company shall have been provided with an opinion of counsel (which may or may
not be counsel for the Company), or other evidence reasonably satisfactory to
it, that such transfer is not in violation of the Securities Act, and any
applicable state securities laws. Subject to the satisfaction
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of the aforesaid condition, this Warrant and such shares of Common Stock shall
be transferable from time to time by the Holder upon written notice to the
Company. If this Warrant is transferred, in whole or in part, upon surrender of
this Warrant to the Company, the Company shall deliver to each transferee a
Warrant evidencing the rights of such transferee to purchase the number of
shares of Common Stock that such transferee is entitled to purchase pursuant to
such transfer. The Company may place a legend on this Warrant or any replacement
Warrant and on each certificate representing shares issuable upon exercise of
this Warrant as to which the Company has not been provided evidence that the
transfer of such security would not be in violation of the Securities Act and
any applicable state securities laws. Only a registered Holder may enforce the
provisions of this Warrant against the Company. A transferee of the original
registered Holder becomes a registered Holder only upon delivery to the Company
of the original Warrant and an original Assignment, substantially in the form
set forth in Exhibit B attached hereto.
(b) This Warrant is exchangeable upon its surrender by the
Holder to the Company for new Warrants of like tenor and date representing in
the aggregate the right to purchase the number of shares purchasable hereunder,
each of such new Warrants to represent the right to purchase such number of
shares as may be designated by the Holder at the time of such surrender.
4. ADJUSTMENTS TO WARRANT PRICE AND NUMBER OF SHARES SUBJECT TO
WARRANT. The Warrant Price and the number of shares of Common Stock purchasable
upon the exercise of this Warrant are subject to adjustment from time to time
upon the occurrence of any of the events specified in this Section 4. For the
purpose of this Section 4, "Common Stock" means shares now or hereafter
authorized of any class of common stock of the Company and any other stock of
the Company, however designated, that has the right (subject to any prior rights
of any class or series of preferred stock) to participate in any distribution of
the assets or earnings of the Company without limit as to per share amount.
(a) In case the Company shall (i) pay a dividend or make a
distribution in shares of Common Stock or other securities, (ii) subdivide its
outstanding shares of Common Stock into a greater number of shares, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (iv) issue by reclassification of its shares of Common Stock other securities
of the Company, then the Warrant Price in effect at the time of the record date
for such dividend or of the effective date of such subdivision, combination or
reclassification, and/or the number and kind of securities issuable on such
date, shall be proportionately adjusted so that the Holder of any Warrant
thereafter exercised shall be entitled to receive the aggregate number and kind
of shares of Common Stock (or such other securities other than Common Stock) of
the Company that, if such Warrant had been exercised immediately prior to such
date, the Holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) In case the Company shall fix a record date for the making
of a distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the surviving corporation) of cash, evidences of indebtedness or
assets, or subscription rights or warrants (excluding those referred to in
subsection (b) above), the Warrant Price to be in effect after such record date
shall be determined by multiplying the Warrant Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the current
market price per share of Common Stock on such record date, less the amount of
cash so to be distributed (or the fair market value (as determined in good faith
by, and reflected in a formal resolution of, the Board of Directors of the
Company) of the portion of the assets or evidences of indebtedness so to be
distributed, or of such subscription rights or warrants, applicable to one share
of Common Stock, and the denominator of which shall be such current market price
per share of Common Stock. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not so
made, the Warrant Price shall again be adjusted to be the Warrant Price which
would then be in effect if such record date had not been fixed.
(c) For the purpose of any computation under any subsection of
this Section 4, the "current market price" per share of Common Stock on any date
shall be the per share price of the Common Stock on the trading day immediately
prior to the event requiring an adjustment hereunder and shall be: (i) if the
principal trading market for such securities is a national or regional
securities exchange, the closing price during normal trading hours on such
exchange on such day; or (ii) if sales prices for shares of Common Stock are
reported by the NASDAQ National Market System (or a similar system then in use),
the last reported sales price during normal
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trading hours so reported on such day; or (iii) if neither (i) nor (ii) above
are applicable, and if bid and ask prices for shares of Common Stock are
reported in the over-the-counter market by NASDAQ (or, if not so reported, by
the National Quotation Bureau), the average of the high bid and low ask prices
during normal trading hours so reported on such day. Notwithstanding the
foregoing, if there is no reported closing price, last reported sales price, or
bid and ask prices, as the case may be, for the day in question, then the
current market price shall be determined as of the latest date prior to such day
for which such closing price, last reported sales price, or bid and ask prices,
as the case may be, are available, unless such securities have not been traded
on an exchange or in the over-the-counter market for 30 or more days immediately
prior to the day in question, in which case the current market price shall be
determined in good faith by, and reflected in a formal resolution of, the Board
of Directors of the Company.
(d) Notwithstanding any provision herein to the contrary, no
adjustment in the Warrant Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Warrant Price; provided,
however, that any adjustments which by reason of this subsection (d) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 4 shall be made to
the nearest cent or the nearest one-hundredth of a share, as the case may be.
(e) In the event that at any time, as a result of an
adjustment made pursuant to subsection (a) above, the Holder of any Warrant
thereafter exercised shall become entitled to receive any shares of capital
stock of the Company other than shares of Common Stock, thereafter the number of
such other shares so receivable upon exercise of any Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Common Stock
contained in this Section 4, and the other provisions of this Warrant shall
apply on like terms to any such other shares.
(f) Upon each adjustment of the Warrant Price pursuant to this
Section 4, the number of shares of Common Stock purchasable upon exercise of
this Warrant following the effectiveness of such adjustment shall be adjusted to
the number of shares of Common Stock obtained by (i) multiplying the number of
shares of Common Stock purchasable immediately before such adjustment upon the
exercise of a Warrant by the Warrant Price in effect immediately before such
adjustment, and (ii) dividing the product so obtained by the Warrant Price in
effect immediately after such adjustment of the Warrant Price.
(g) If the Company merges or consolidates into or with another
corporation or entity, or if another corporation or entity merges into or with
the Company (excluding such a merger in which the Company is the surviving or
continuing corporation and which does not result in any reclassification,
conversion, exchange, or cancellation of the outstanding shares of Common
Stock), or if all or substantially all of the assets or business of the Company
are sold or transferred to another corporation, entity, or person, then, as a
condition to such consolidation, merger, or sale (a "Transaction"), lawful and
adequate provision shall be made whereby the Holder shall have the right from
and after the Transaction to receive, upon exercise of this Warrant and upon the
terms and conditions specified herein and in lieu of the shares of the Common
Stock that would have been issuable if this Warrant had been exercised
immediately before the Transaction, such shares of stock, securities, or assets
as the Holder would have owned immediately after the Transaction if the Holder
had exercised this Warrant immediately before the effective date of the
Transaction. The Company shall not effect any Transaction unless prior to or
simultaneously with the consummation thereof the successor corporation, entity,
or person (if other than the Company) resulting from the Transaction or
purchasing assets or the business of the Company in the Transaction shall assume
by written instrument the obligation to deliver to the Holder such shares of
stock, securities, or assets as, in accordance with the foregoing provisions,
the Holder may be entitled to receive.
(h) In case any event shall occur as to which the other
provisions of this Section 4 are not strictly applicable but the failure to make
any adjustment would not fairly protect the purchase rights represented by this
Warrant in accordance with the essential intent and principles hereof, then, in
each such case, the Company shall effect such adjustment, on a basis consistent
with the essential intent and principles established in this Section 4, as may
be necessary to preserve, without dilution, the purchase rights represented by
this Warrant.
5. REGISTRATION RIGHTS. The Holder shall be entitled to the benefits of
the registration rights set forth in Exhibit C attached hereto.
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6. RESERVATION OF SHARES. The Company agrees at all times to reserve
and hold available out of the aggregate of its authorized but unissued Common
Stock the number of shares of its Common Stock issuable upon the full exercise
of this Warrant. The Company further covenants and agrees that all shares of
Common Stock that may be delivered upon the exercise of this Warrant will, upon
delivery, be fully paid and nonassessable and free from all taxes, liens and
charges with respect to the purchase thereof hereunder.
7. NOTICES TO HOLDER. Upon any adjustment of the Warrant Price (or
number of shares of Common Stock purchasable upon the exercise of this Warrant)
pursuant to Section 4, the Company shall promptly thereafter cause to be given
to the Holder written notice of such adjustment. Such notice shall include the
Warrant Price (and/or the number of shares of Common Stock purchasable upon the
exercise of this Warrant) after such adjustment, and shall set forth in
reasonable detail the Company's method of calculation and the facts upon which
such calculations were based. Where appropriate, such notice shall be given in
advance and included as a part of any notice required to be given under the
other provisions of this Section 7.
In the event of (a) any fixing by the Company of a record date with
respect to the holders of any class of securities of the Company for the purpose
of determining which of such holders are entitled to dividends or other
distributions, or any rights to subscribe for, purchase or otherwise acquire any
shares of capital stock of any class or any other securities or property, or to
receive any other right, or (b) any capital reorganization of the Company, or
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets or business of the Company
to, or consolidation or merger of the Company with or into, any other entity or
person (other than to or with a subsidiary of the Company), or (c) any voluntary
or involuntary dissolution or winding up of the Company, then and in each such
event the Company will give the Holder a written notice specifying, as the case
may be, (i) the record date for the purpose of such dividend, distribution, or
right, and stating the amount and character of such dividend, distribution, or
right; or (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, conveyance, dissolution,
liquidation, or winding up is to take place and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such capital stock or
securities receivable upon the exercise of this Warrant) shall be entitled to
exchange their shares of Common Stock (or such other stock securities) for
securities or other property deliverable upon such event. Any such notice shall
be given at least 10 days prior to the earliest date therein specified.
8. NO RIGHTS AS A STOCKHOLDER. This Warrant does not entitle the Holder
to any voting rights or other rights as a stockholder of the Company, nor to any
other rights whatsoever except the rights herein set forth.
9. ADDITIONAL COVENANTS OF THE COMPANY. At such time as the Common
Stock is listed for trading on any regional or national securities exchange or
NASDAQ, the Company shall, upon issuance of any shares for which this Warrant is
exercisable, at its expense, promptly obtain and maintain the listing of such
shares.
The Company shall comply with the reporting requirements of Sections 13
and 15(d) of the Exchange Act for so long as and to the extent that such
requirements apply to the Company.
The Company shall not, by amendment of its Articles of Incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant. Without limiting the generality of the foregoing, the Company (a) will
at all times reserve and keep available, solely for issuance and delivery upon
exercise of this Warrant, shares of Common Stock issuable from time to time upon
exercise of this Warrant, (b) will not increase the par value of any shares of
capital stock receivable upon exercise of this Warrant above the amount payable
therefor upon such exercise, and (c) will take all such actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable stock.
10. SPECIFIC PERFORMANCE. The Company stipulates that remedies at law,
in money damages, available to the Holder or to a holder of Common Stock issued
pursuant to the exercise of this Warrant, in the event of any default or
threatened default by the Company in the performance of or compliance with any
of the terms of this Warrant, are not and will not be adequate. Therefore, the
Company agrees that the terms of this Warrant may be specifically enforced by a
decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.
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11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Company, the Holder and their respective successors
and permitted assigns.
12. NOTICES. The Company agrees to maintain a ledger of the ownership
of the Warrants (the "Warrant Ledger). Any notice hereunder shall be given by
registered or certified mail or by reputable overnight delivery service if to
the Company, at its principal executive office and, if to the Holder, to its
address shown in the Warrant Ledger of the Company, provided that the Holder may
at any time on three (3) days' written notice to the Company designate or
substitute another address where notice is to be given. Notice shall be deemed
given and received after a certified or registered letter, properly addressed
with postage prepaid, is deposited in the U.S. mail, or if by overnight delivery
service, on the day it is delivered to the recipient.
13. SEVERABILITY. Every provision of this Warrant is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the remainder of this
Warrant.
14. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Arizona without giving effect to the
principles of choice of laws thereof.
15. ATTORNEYS' FEES. In any action or proceeding brought to enforce any
provision of this Warrant, the prevailing party shall be entitled to recover
reasonable attorneys' fees in addition to its costs and expenses and any other
available remedy.
16. ENTIRE AGREEMENT. This Warrant (including the exhibits attached
hereto) constitutes the entire understanding between the Company and the Holder
with respect to the subject matter hereof, and supersedes all prior
negotiations, discussions, agreements and understandings relating to such
subject matter.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized officer, and its corporate seal hereunto affixed.
DATED: December 7, 1999
WAVO CORPORATION
By: /s/ Xxxxx X. Xxxxx
------------------------------
Its: CEO
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Exhibit A
SUBSCRIPTION FORM
(To be Executed by the Holder to Exercise the Rights To Purchase Common Stock
Evidenced by the Within Warrant)
The undersigned hereby irrevocably subscribes for ___________ shares
(the "Stock") of the Common Stock of _______________________ (the "Company")
pursuant to and in accordance with the terms and conditions of the attached
Warrant, and hereby makes payment of $______________ therefor by [tendering cash
or delivering a certified check or bank cashier's check or by wire transfer,
payable to the order of the Company] [surrendering ______ shares of Common Stock
received upon exercise of the attached Warrant, which shares have a current
market price equal to such payment]. The undersigned requests that a certificate
for such shares be issued in the name of the undersigned and be delivered to the
undersigned at the address stated below. If such number of shares is not all of
the shares purchasable pursuant to the attached Warrant, the undersigned
requests that a new Warrant of like tenor for the balance of the remaining
shares purchasable thereunder be delivered to the undersigned at the address
stated below.
In connection with the issuance of the Stock, I hereby represent to the
Company that I am acquiring the Stock for my own account for investment and not
with a view to, or for resale in connection with, a distribution of the shares
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
I understand that because the Stock has not been registered under the
Securities Act, I must hold such Stock indefinitely unless such Stock is
subsequently registered and qualified under the Securities Act or is exempt from
such registration and qualification. I shall make no transfer or disposition of
the Stock unless (a) such transfer or disposition can be made without
registration under the Securities Act by reason of a specific exemption from
such registration and such qualification, or (b) a registration statement has
been filed pursuant to the Securities Act and has been declared effective with
respect to such disposition.
I agree that each certificate representing the Stock delivered to me
shall bear substantially the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The shares may
not be sold or transferred in the absence of such registration or an
exemption therefrom under said Act."
I further agree that the Company may place stop orders on the
certificates evidencing the Stock with the transfer agent, if any, to the same
effect as the above legend. The legend and stop transfer notice referred to
above shall be removed only upon my furnishing to the Company an opinion of
counsel (reasonably satisfactory to the Company) to the effect that such legend
may be removed.
Date:______________________________ Signed:_____________________________
Address:___________________________
___________________________________
A-1
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Exhibit B
ASSIGNMENT
(To be Executed by the Holder to Effect Transfer of the Within Warrant)
For Value Received __________________________ hereby sells, assigns and
transfers to _____________________________ this Warrant and the rights
represented hereby to purchase _________ shares of Common Stock in accordance
with the terms and conditions hereof, and does hereby irrevocably constitute and
appoint _____________________________ as attorney to transfer this Warrant on
the books of the Company with full power of substitution.
Dated:________________________ Signed: ______________________________
Please print or typewrite Please insert Social Security
name and address of or other Tax Identification
assignee: Number of Assignee:
_____________________________ ________________________________
_____________________________
_____________________________
B-1
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Exhibit C
REGISTRATION RIGHTS OF HOLDER AND ITS ASSIGNS
1. DEFINITIONS
Affiliate: With reference to any designated Person, any Person that has
a relationship with such designated Person whereby either of such Persons
directly or indirectly controls or is controlled by or is under common control
with the other. For this purpose "control" means the power, direct or indirect,
of one Person to direct or cause direction of the management and policies of
another, whether by contract, through voting securities or otherwise.
Commission: The Securities and Exchange Commission or any other
governmental body at the time administering the Securities Act.
Common Stock: The Company's authorized common stock, no par value per
share, as constituted on the date of this Warrant, any stock into which such
Common Stock may thereafter be changed and any stock of the Company of any other
class, which is not preferred as to dividends or assets over any other class of
stock of the Company and which is not subject to redemption, issued to the
holders of shares of such Common Stock upon any re-classification thereof.
Company Securities: Any equity securities proposed to be sold by the
Company in the registration statement referred to.
Person: A corporation, an association, a partnership, a joint venture,
a trust, an organization, a business, an individual, a government or political
subdivision thereof or a governmental body.
Registrable Securities: Common Stock and any securities of the Company
issued with respect to the Common Stock by way of stock dividend or stock split
or in connection with a combination, recapitalization, share exchange,
consolidation or other reorganization of the Company. As to any Registrable
Securities, once issued such securities shall cease to be Registrable Securities
when (i) a registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall
have been disposed of in accordance with such registration statement, (ii) they
shall have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (iii) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent disposition of
them shall not require registration or qualification of them under the
Securities Act or any similar state law then in force, or (iv) they shall have
ceased to be outstanding.
Selling Expenses: All underwriting discounts, selling commissions and
stock transfer taxes applicable to the securities registered by the Holder and,
except as provided in Section 4 hereof, all fees and disbursements of counsel
for the Holder.
Capitalized terms used in this Exhibit C but not otherwise defined herein shall
have the meanings ascribed to such terms in the body of the Warrant.
2. REGISTRATION RIGHTS
2.1. Registration on Request.
(a) Except as provided in subsection (b) of this Section 2.1, upon the
written request of the Holder requesting that the Company effect pursuant to
this Section 2.1 the registration of the Holder's Registrable Securities under
the Securities Act (which request shall specify the number of Registrable
Securities to be registered), the Company shall, as expeditiously as reasonably
possible, use its best efforts to effect the registration under the Securities
Act of the Registrable Securities of the Holder which the Company has been so
requested to register.
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(b) The Company shall not be obligated to take any action to effect any
registration requested by the Holder pursuant to Section 2.1(a) hereof (i)
before three months after the date of this Warrant, (ii) after two years from
the date of this Warrant, or (iii) after the Company has effected two such
registrations pursuant to this Section 2.1 and each such registration has been
declared or ordered effective.
(c) Notwithstanding any other provision hereof to the contrary, a
registration requested pursuant to this Section 2.1 shall not be deemed to have
been effected (i) unless it has become effective and remains effective for at
least 180 days; provided, however, that a registration which does not become
effective after the Company has filed a registration statement with respect
thereto solely by reason of the refusal by the Holder to proceed with such
registration shall be deemed to have been effected by the Company at the request
of the Holder unless the Holder shall have elected to pay all Company
Registration Expenses (as defined in Section 4) in connection with such
registration, (ii) if after it has become effective such registration is
interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or court for any reason other than
a misrepresentation or an omission by the Holder, and such stop order,
injunction or other order or requirement has not been removed, withdrawn or
otherwise satisfied within sixty days after the date it was issued or entered,
or (iii) if the conditions to closing specified in the purchase agreement or
underwriting agreement entered into in connection with such registration are not
satisfied other than by reason of some wrongful act or omission, or act or
omission in bad faith, by the Holder.
2.2. Incidental Registration.
(a) If the Company at any time proposes to register any of its equity
securities under the Securities Act on any form other than Form S-4 or Form S-8
(or any similar or successor form then in effect), whether or not for sale for
its own account, and if the registration form proposed to be used may be used
for the registration of Registrable Securities, the Company will in each such
case give prompt written notice (and in any event at least 10 business days'
prior written notice prior to the filing of such registration statement) to the
Holder of its intention to do so, such notice to specify the securities to be
registered, the proposed numbers and amounts thereof and the date not less than
20 days thereafter by which the Company must receive the Holder's written
indication of whether the Holder wishes to include its Registrable Securities in
such registration statement and advising the Holder of its rights under this
Section 2.2. Upon the written request of the Holder made on or before the date
specified in such notice (which request shall specify the number of Registrable
Securities intended to be disposed of by the Holder), the Company will, to the
extent permitted under Section 7, use its best efforts to cause all such
Registrable Securities, which the Holder has so requested the registration
thereof, to be registered under the Securities Act (with the securities that the
Company at the time proposes to register), to the extent requisite to permit the
sale or other disposition (in accordance with the intended methods thereof as
aforesaid) by the Holder of the Registrable Securities to be so registered.
(b) No registration effected pursuant to a request referred to in this
Section 2.2 shall be deemed to have been effected pursuant to Section 2.1.
(c) Notwithstanding anything to the contrary in this Section 2.2, the
Company shall have the right to discontinue any registration under this Section
2.2 at any time prior to the effective date of such registration if the
registration of other securities giving rise to such registration under this
Section 2.2 is discontinued; but no such discontinuation shall preclude an
immediate or subsequent request for registration pursuant to section 2.1.
3. REGISTRATION PROCEDURES
If and whenever the Company is required by the provisions hereof to use
its best efforts to effect or cause the registration of any Registrable
Securities under the Securities Act as provided herein, the Company will, as
expeditiously as possible:
(a) prepare and file with the Commission (in the case of a registration
pursuant to Section 2.1, such filing to be made as soon thereafter as possible
but in any event within 60 days after the request by the Holder to register
Registrable Securities) a registration statement with respect to such
Registrable Securities and use its best efforts to cause such registration
statement to become and remain effective (provided that, before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company will furnish to the counsel
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selected by the Holder copies of all such documents proposed to be filed, which
documents will be subject to the review of such counsel);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
a period of at least 180 days (or such shorter period as shall be necessary to
complete the distribution of the securities covered thereby) and to comply with
the provisions of the Securities Act with respect to the sale or other
disposition of all securities covered by such registration statement during such
period in accordance with the intended methods of disposition by the seller or
sellers thereof set forth in such registration statement;
(c) furnish to counsel for the Holder and each underwriter of the
securities being sold by the Holder such number of copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus included in
such registration statement (including each preliminary prospectus), in
conformity with the requirements of the Securities Act, and such other
documents, as such counsel may reasonably request, in substantially the form in
which they are proposed to be filed with the Commission, in order to facilitate
the public sale or other disposition of the Registrable Securities owned by the
Holder;
(d) use its best efforts to register or qualify such Registrable
Securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions in the United States as the Holder shall
reasonably request, and do any and all other acts and things which may be
necessary or advisable to enable the Holder and any underwriter to consummate
the disposition in such jurisdictions of such Registrable Securities owned by
the Holder, except that the Company shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any jurisdiction
where, but for the requirements of this clause (d), it would not be obligated to
be so qualified, or to subject itself to taxation in any such jurisdiction;
(e) use its best efforts to cause such Registrable Securities covered
by such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be reasonably necessary to enable
the Holder to consummate the disposition of its Registrable Securities;
(f) notify the Holder at any time when a prospectus relating to its
Registrable Securities is required to be delivered under the Securities Act, of
the Company's becoming aware that the prospectus included in the related
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing, and promptly prepare and furnish to the Holder and
each underwriter a reasonable number of copies of a prospectus supplemented or
amended so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the circumstances
then existing;
(g) otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission;
(h) use its best efforts (i) to cause all such Registrable Securities
covered by such registration statement to be listed on a national securities
exchange (if such Registrable Securities are not already so listed) and on each
additional national securities exchange on which similar securities issued by
the Company are then listed, if the listing of such Registrable Securities is
then permitted under the rules of such exchange, or (ii) to secure designation
of all such Registrable Securities covered by such registration statement as a
NASDAQ "national market system security" within the meaning of Rule 11Aa2-1 of
the Commission or, failing that, to secure NASDAQ authorization for such
Registrable Securities and, without limiting the generality of the foregoing, to
arrange for at least two market makers to register as such with respect to such
Registrable Securities with the National Association of Securities Dealers;
(i) take such other actions as the Holder shall reasonably request in
order to expedite or facilitate the disposition of its Registrable Securities;
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(j) in the case of a registration instituted pursuant section 2.1, if
generally requested in an offering of the type being registered, to use its best
efforts to furnish to the Holder an opinion from the Company's counsel and a
"cold comfort" letter from the Company's independent public accountants,
addressed to the Holder, in customary form and covering such matters of the type
customarily covered by such opinions and "cold comfort" letters as the Holder
shall reasonably request;
(k) make available for inspection by the Holder and by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by the Holder
or any such underwriter, all pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause all of the
Company's officers, directors, employees and the independent public accountants
who have certified its financial statements to supply all information reasonably
requested by the Holder, underwriter, attorney, accountant or agent in
connection with such registration statement;
(l) permit the Holder (i) review and comment on the registration or
comparable statement, (ii) to require the insertion therein of material,
furnished to the Company in writing, which in the judgment of the Holder should
be included and (iii) to receive such documents and make such requests as the
Holder is entitled to under this Section 3;
(m) in the case of an underwritten offering, enable the Registrable
Securities to be in such denominations and registered in such names as the
underwriters may request at least two business days prior to the sale of the
Registrable Securities; and
(n) notify the Holder of any stop order threatened or issued by the
Commission and take all actions reasonably necessary to prevent the entry of
such stop order or to remove it if entered.
The Holder shall be deemed to have agreed by acquisition of such Registrable
Securities that, upon receipt of any notice from the Company of the happening of
any event of the kind described in subdivision (f) above, the Holder will
forthwith discontinue its disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until the Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
said subdivision and, if so directed by the Company, will deliver to the Company
(at the Company's expense) all copies, other than permanent file copies, then in
the Holder's possession of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company shall
give any such notice, the period mentioned in subdivision (b) above shall be
extended by the number of days during the period from and including the date of
the giving of such notice to and including the date when the Holder shall have
received the copies of the supplemented or amended prospectus contemplated by
subdivision (f) above.
The Holder shall furnish to the Company in writing such information and
documents regarding it and the distribution of its securities as may reasonably
be required to be disclosed in the registration statement in question by the
rules and regulations under the Securities Act or under any other applicable
securities or blue sky laws of the jurisdictions referred to in subdivision (d)
above.
If any such registration or comparable statement refers to the Holder
by name or otherwise as the holder of any securities of the Company then the
Holder shall have the right to require (i) the insertion therein of language, in
form and substance satisfactory to the Holder and presented to the Company in
writing, to the effect that the holding by the Holder of such securities is not
to be construed as a recommendation by the Holder of the investment quality of
the Company's securities covered thereby and that such holding does not imply
that the Holder will assist in meeting any future financial requirements of the
Company, or (ii) in the event that such reference to the Holder by name or
otherwise is not required by the Securities Act or any similar federal statute
then in force, the deletion of the reference to the Holder.
If any registration under Section 2.1 which is proposed by the Company
to be on Form S-3 or any similar short-form registration statement which is a
successor to Form S-3 shall be in connection with an underwritten public
offering, and if the managing underwriters shall advise the Company in writing
that in their good faith opinion the use of another permitted form is of
material importance to the success of the offering, then such registration shall
be on such other permitted form.
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4. REGISTRATION EXPENSES
In connection with any registration of Registrable Securities pursuant
to Section 2.1 or 2.2, the Company will, whether or not any such registration
shall become effective, from time to time promptly upon receipt of bills or
invoices relating thereto, pay all expenses (other than Selling Expenses)
incident to its performance of or compliance herewith (the "Company Registration
Expenses"), including, without limitation, all registration, filing and NASD
fees, fees and expenses of compliance with securities or blue sky laws, word
processing, duplicating and printing expenses, messenger and delivery expenses,
fees and disbursements of counsel for the Company and all independent public
accountants (including the expenses of any audit and/or "cold comfort" letter,
if required) and other Persons retained by the Company, reasonable fees and
disbursements of one counsel or firm of counsel retained by the Holder (not to
exceed $2,000) and any fees and disbursements of underwriters customarily paid
by issuers of securities (excluding underwriting commissions and discounts,
except where they are customarily paid by issuers).
5. INDEMNIFICATION
(a) The Company will, and hereby does, indemnify, to the extent
permitted by law, the Holder and each Person, if any, who controls the Holder
within the meaning of Section 15 of the Securities Act (collectively, "Holder
Indemnified Parties"), from and against all losses, claims, damages, liabilities
and expenses, joint or several, to which any such Holder Indemnified Party may
become subject under the Securities Act, the Exchange Act and all rules and
regulations under each such Act, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (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
contained in any registration statement as contemplated hereby or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if the Company
shall have filed with the Commission any amendment thereof or supplement
thereto), or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or (iii) any violation by the Company of any federal, state or
common law rule or regulation applicable to the Company and relating to action
of or inaction by the Company in connection with any such registration; and in
each such case, the Company shall reimburse each such Holder Indemnified Party
for any reasonable legal or other expenses incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability,
expense, action or proceeding; provided, however, that the Company shall not be
liable to any such Holder Indemnified Party insofar as such losses, claims,
damages, liabilities, expenses, actions or proceedings are caused by any untrue
statement or alleged untrue statement made in reliance on or in conformity with
any information furnished in writing to the Company by or on behalf of the
Holder Indemnified Party expressly for use therein.
If the offering pursuant to any registration statement provided for
hereunder is made through underwriters, no action or failure to act on the part
of such underwriters (whether or not any such underwriter is an Affiliate of any
Holder Indemnified Party) shall affect the Company's obligations to indemnify
the Holder Indemnified Parties pursuant to the preceding paragraph. If the
offering pursuant to any registration statement provided for hereunder is made
through underwriters, the Company agrees to enter into an underwriting agreement
in customary form with such underwriters and to indemnify such underwriters,
their officers and directors, if any, and each Person, if any, who controls such
underwriters within the meaning of Section 15 of the Securities Act to the same
extent as hereinbefore provided with respect to the indemnification of the
Holder Indemnified Parties; provided that the Company shall not be required to
indemnify any such underwriter, or any officer or director of such underwriter
or any Person who controls such underwriter within the meaning of Section 15 of
the Securities Act, to the extent that the loss, claim, damage, liability,
expense, action or proceeding for which indemnification is claimed results from
such underwriter's failure to send or give a copy of the amended or supplemented
final prospectus, at or prior to the written confirmation of the sale of
Registrable Securities, to a Person asserting the existence of an untrue
statement or alleged untrue statement or omission or alleged omission if such
statement or omission was corrected in such amended or supplemented final
prospectus prior to such written confirmation and the underwriter was given
notice of the availability of such amended or supplemented final prospectus.
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In connection with any registration statement in which the Holder is
participating, the Holder will furnish to the Company in writing such
information as shall be reasonably requested by the Company for use in any such
registration statement or prospectus and will indemnify, to the extent permitted
by law, the Company, its officers and directors and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages, liabilities, expenses, actions or
proceedings resulting from any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission of a material fact required to
be stated in the registration statement or prospectus or preliminary prospectus
or any amendment thereof or supplement thereto, or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or omission is made in reliance on or in conformity with any
information so furnished in writing by the Holder expressly for use therein.
Any Person entitled to indemnification under the provisions of this
Section 5 shall (i) give prompt notice to the indemnifying party of any claim
with respect to which it seeks indemnification, and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, permit
such indemnifying party to assume the defense of such claim, with counsel
reasonably satisfactory to the indemnified party; and if such defense is so
assumed, such indemnifying party shall not enter into any settlement without the
consent of the indemnified party if such settlement attributes liability to the
indemnified party and such indemnifying party shall not be subject to any
liability for any settlement made without its consent (which shall not be
unreasonably withheld); and any underwriting agreement entered into with respect
to any registration statement provided for hereunder shall so provide. In the
event an indemnifying party shall not be entitled, or elects not, to assume the
defense of a claim, such indemnifying party shall not be obligated to pay the
fees and expenses of more than one counsel or firm of counsel (plus one local
counsel or firm of counsel) for all parties indemnified by such indemnifying
party hereunder in respect of such claim, unless in the reasonable judgment of
any such indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties in respect to such
claim. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any Holder Indemnified Party and shall
survive the transfer of such securities by such Holder Indemnified Party.
(b) If for any reason the foregoing indemnity is unavailable, then the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other, or (ii) if the allocation provided by subdivision (i) above
is not permitted by applicable law or provides a lesser sum to the indemnified
party than the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other but
also the relative fault of the indemnifying party and the indemnified party as
well as any other relevant equitable considerations. Notwithstanding the
foregoing, (x) the Holder shall not be required to contribute any amount in
excess of the amount the Holder would have been required to pay to an
indemnified party if the indemnity under subdivision (a) of this Section 5 was
available, and (y) no underwriter, if any, shall be required to contribute any
amount in excess of the amount by which the total price at which the Registrable
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. The obligation of any underwriters to contribute pursuant to
this Section 5 shall be several in proportion to their respective underwriting
commitments and not joint.
(c) An indemnifying party shall make payments of all amounts required
to be made pursuant to the foregoing provisions of this Section 5 to or for the
account of the indemnified party from time to time promptly upon receipt of
bills or invoices relating thereto or when otherwise due and payable.
6. CERTAIN LIMITATIONS ON REGISTRATION RIGHTS
In the case of a registration under Section 2.1, if the Holder
determines to enter into an underwriting agreement in connection therewith or,
in the case of a registration under Section 2.2, if the Company determines to
enter into an underwriting agreement in connection therewith, all shares
constituting Registrable Securities to be included in such registration shall be
subject to such underwriting agreement and no Person may participate in such
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registration unless such Person agrees to sell such Person's securities on the
basis provided in such underwriting agreement and completes and/or executes all
questionnaires, indemnities, and other reasonable documents which must be
executed under the terms of such underwriting agreement.
7. ALLOCATION OF SECURITIES INCLUDED IN REGISTRATION STATEMENT
In the case of a registration pursuant to Section 2.2, if the Company's
managing underwriter shall advise the Company and the Holder in writing that the
inclusion in any registration pursuant hereto of some or all of (a) the
Registrable Securities sought to be registered by the Holder, and (b) the
Company Securities sought to be registered creates a substantial risk that the
proceeds or price per unit that will be derived from such registration will be
reduced or that the number of securities to be registered is too large a number
to be reasonably sold, (i) first, the number of Company Securities sought to be
registered shall be included in such registration, and (ii) next, the number of
Registrable Securities sought to be registered by the Holder shall be included
in such registration; provided, however, that, if the Holder would be required
pursuant to the provisions of this Section 7 to reduce the number of Registrable
Securities that it may include in such registration, the Holder may withdraw all
of its Registrable Securities from such registration.
8. LIMITATIONS ON SALE OR DISTRIBUTION OF SECURITIES
If a registration hereunder shall be in connection with an underwritten
public offering, the Holder shall be deemed to have agreed by acquisition of its
Registrable Securities not to effect any public sale or distribution, including
any sale pursuant to Rule 144 under the Securities Act, of any Registrable
Securities and to use its best efforts not to effect any such public sale or
distribution of any other equity security of the Company or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (other than as part of such underwritten public offering) within 10 days
before or 90 days after the effective date of such registration statement.
9. RULE 144
The Company covenants that it will file the reports required to be
filed under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder (or, in the event that the
Company is not required to file such reports, it will make publicly available
information as set forth in Rule 144(c)(2) promulgated under the Securities
Act), and it will take such further action as the Holder may reasonably request,
or to the extent required from time to time to enable the Holder to sell its
Registrable Securities without registration under the Securities Act within the
limitation of the exemption provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon request of the Holder, the
Company will deliver to the Holder a written statement as to whether it has
complied with such requirements.
10. REGISTRATION RIGHTS OF OTHERS
If the Company shall at any time hereafter provide to the Holder of any
securities of the Company rights with respect to the registration of such
securities under the Securities Act, such rights shall not be in conflict with
or adversely affect any of the rights provided herein to the Holder.
11. TRANSFER OF REGISTRATION RIGHTS
If and to the extent that the Holder sells or otherwise disposes of
Registrable Securities in any transaction that does not require registration
under the Securities Act, the rights of the Holder hereunder with respect to
such Registrable Securities will be assignable to the transferee of such
Registrable Securities.
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