FORM OF REGISTRATION RIGHTS AGREEMENT
1. INCIDENTAL REGISTRATION. At any time, and from time to time, after
the Company has completed an initial public offering of its common stock
pursuant to a registration statement filed with the Securities and Exchange
Commission (the "Commission"), each time the Company shall determine to
proceed with the actual preparation and filing of a registration statement
under the Securities Act in connection with the proposed offer and sale for
money of any of its securities by it or any of its security holders, the
Company will give written notice of its determination to all record holders
of Purchased Shares. Upon the written request of a record holder of any
shares of Purchased Shares given within 15 days after receipt of any such
notice from the Company, the Company will, except as herein provided, cause
all such shares of Purchased Shares, the record holders of which have so
requested registration thereof, to be included in such registration
statement, all to the extent requisite to permit the sale or other
disposition by the prospective seller or sellers of the Purchased Shares to
be so registered; provided, however, that nothing herein shall prevent the
Company from, at any time, abandoning or delaying any such registration
initiated by it. If any registration pursuant to this section shall be
underwritten in whole or in part, the Company may require that the Purchased
Shares requested for inclusion pursuant to this section be included in the
underwriting on the same terms and conditions as the securities otherwise
being sold through the underwriters. In the event that the aggregate number
of Purchased Shares requested for inclusion pursuant to this section would
constitute more than ten percent (10%) of the total number of shares to be
included in a proposed underwritten public offering, and if in the good faith
judgement of the managing underwriter of such public offering the inclusions
of all of the Purchased Shares originally covered by a request for
registration would reduce the number of shares to be offered by the Company
or interfere with the successful marketing of the shares of stock offered by
the Company, the number of shares of Purchased Shares otherwise to be
included in the underwritten public offering may be reduced pro rata among
the holders thereof requesting such registration; provided, however, that
after any such required reduction the Purchased Shares to be included in such
offering shall constitute at least ten percent (10%) of the total number of
shares to be included in such offering. Those shares of Purchased Shares
which are thus excluded from the underwritten public offering shall be
withheld from the market by the holders thereof for a period, not to exceed
90 days, which the managing underwriter reasonably determines is necessary in
order to effect the underwritten public offering.
2. REGISTRATION PROCEDURES. If and whenever the Company is required
by the provisions of Section 1 to effect the registration of any Purchased
Shares under the Securities Act, the Company will:
(a) prepare and file with the Commission a registration statement
with respect to such securities, and use its best efforts to cause such
registration statement to become and remain effective for such period as
may be reasonably necessary to effect the sale of such securities, not to
exceed three (3) months;
(b) prepare and file with the Commission such amendments to such
registration statement and supplements to the prospectus contained therein
as may be
necessary to keep such registration statement effective for such period as
may be reasonably necessary to effect the sale of such securities, not to
exceed three (3) months;
(c) furnish to the security holders participating in such
registration and to the underwriters of the securities being registered
such reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such security
holders and underwriters may reasonably request in order to facilitate the
public offering of such securities;
(d) use its best efforts to register or qualify the securities
covered by such registration statement under such state securities or blue
sky laws of such jurisdictions as such participating holders may reasonably
request within 20 days following the original filing of such registration
statement, except that the Company shall not for any purpose be required
to execute a general consent to service of process or to qualify to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified;
(e) notify the security holders participating in such registration,
promptly after it shall receive notice thereof, of the time when such
registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed;
(f) notify such holders promptly of any request by the Commission for
the amending or supplementing of such registration statement or prospectus
or for additional information;
(g) prepare and file with the Commission, promptly upon the request
of any such holders, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel for such holders
(and concurred in by counsel for the Company), is required under the
Securities Act or the rules and regulations thereunder in connection with
the distribution of the Purchased Shares by such holder;
(h) prepare and promptly file with the Commission and promptly notify
such holders of the filing of such amendment or supplement to such
registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities Act, any event
shall have occurred as the result of which any such prospectus or any other
prospectus as then in effect would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances in which they were
made, not misleading;
(i) advise such holders, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of such registration statement or
the initiation or threatening of any proceeding for that purpose and
promptly use its best efforts to prevent the issuance of any stop order or
to obtain its withdrawal if such stop order should be issued;
(j) not file any amendment or supplement to such registration
statement or prospectus to which a majority in interest of such holders
shall have reasonably objected
on the grounds that such amendment or supplement does not comply in all
material respects with the requirements of the Securities Act or the rules
and regulations thereunder, after having been furnished with a copy thereof
at least five business days prior to the filing thereof, unless in the
opinion of counsel for the Company the filing of such amendment or
supplement is reasonably necessary to protect the Company from any
liabilities under any applicable federal or state law and such filing will
not violate applicable law; and
(k) at the request of any such holder, furnish on the effective date
of the registration statement and, if such registration includes an
underwritten public offering, at the closing provided for in the
underwriting agreement: (i) opinions, dated such respective dates, of the
counsel representing the Company for the purposes of such registration,
addressed to the underwriters, if any, and to the holder or holders making
such request, covering such matters as such underwriters and holder or
holders may reasonably request, in which opinion such counsel shall state
(without limiting the generality of the foregoing) that (a) such
registration statement has become effective under the Securities Act;
(b) to the best of such counsel's knowledge no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the Securities
Act; (c) the registration statement and each amendment or supplement
thereto comply as to form in all material respects with the requirements of
the Securities Act and the applicable rules and regulations of the
Commission thereunder (except that such counsel need express no opinion
as to financial statements contained therein); (d) to the best of the
knowledge of such counsel neither the registration statement nor any
amendment nor supplement thereto contains any untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading (except
that such counsel need express no opinion as to financial statements
contained therein); (e) the description in the registration statement or
any amendment or supplement thereto of legal and governmental proceedings
and contracts are accurate and fairly present the information required to
be shown; and (f) such counsel does not know of any legal or governmental
proceedings, pending or threatened, required to be described in the
registration statement or any amendment or supplement thereto which are
not described as required nor of any contracts or documents or instruments
of the character required to be described in the registration statement
or amendment or supplement thereto or to be filed as exhibits to the
registration statement, which are not described or filed as required;
and (ii) letters, dated such respective dates, from the independent
certified public accountants of the Company, addressed to the underwriters,
if any, and to the holder or holders making such request, covering such
matters as such underwriters and holder or holders may reasonably request,
in which letters such accountants shall state (without limiting the
generality of the foregoing) that they are independent certified public
accountants within the meaning of the Securities Act and that in the
opinion of such accountants the financial statements and other financial
data of the Company included in the registration statement or any amendment
or supplement thereto comply in all material respects with the applicable
accounting requirements of the Securities Act.
3. EXPENSES. With respect to any registration, including
registrations pursuant to Form S-3, the Company shall bear the following
fees, costs and expenses: all registration, filing
and NASD fees, printing expenses, fees and disbursements of counsel and
accountants for the Company, fees and disbursements or counsel for the
underwriter or underwriters of such securities (if the Company and/or
selling security holders are required to bear such fees and disbursements),
all internal Company expenses, the premiums and other costs of policies of
insurance against liability arising out of the public offering, and all
legal fees and disbursements and other expenses of complying with state
securities or blue sky laws of any jurisdictions in which the securities to
be offered are to be registered or qualified. Fees and disbursements of
counsel and accountants for the selling security holders, underwriting
discounts and commissions and transfer taxes for selling security holders
and any other expenses incurred by the selling security holders not expressly
included above shall be borne by the selling security holders.
4. INDEMNIFICATION. In the event that any Purchased Shares are
included in a registration statement under Section 1:
(a) The Company will indemnify and hold harmless each holder of
Purchased Shares which are included in a registration statement pursuant
to the provisions of Section 1 and any underwriter (as defined in the
Securities Act) for such holder and each person, if any, who controls
such holder or such underwriter within the meaning of the Securities
Act, from and against any and all loss, damage, liability, cost and
expense to which such holder or any such underwriter or controlling
person may become subject under the Securities Act or otherwise, insofar
as such losses, damages, liabilities, costs or expenses are caused by
any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained
therein or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, damage, liability, cost
or expense arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity
with information furnished by such holder, such underwriter or such
controlling person.
(b) Each holder of Purchased Shares which are included in a
registration pursuant to the provisions of Section 1 will indemnify and
hold harmless the Company, any controlling person and any underwriter
from and against any and all loss, damage, liability, cost or expense to
which the Company or any controlling person and/or any underwriter may
become subject under the Securities Act or otherwise, insofar as such
losses, damages, liabilities, costs or expenses are caused by any untrue
or alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein 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, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was so made in reliance upon and in strict conformity with
information furnished by such holder.
(c) Promptly after receipt by an indemnified party pursuant to the
provisions of paragraph (a) or (b) of this section of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions, such indemnified party will, if a claim thereof is
to be made against the indemnifying party pursuant to the provisions of
said paragraph (a) or (b), promptly notify the indemnifying party of the
commencement thereof; but the omission to so notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than hereunder. In case such action is
brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party shall have the
right to participate in, and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party;
provided, however, if the defendants in any action include both the
indemnified party and the indemnifying party and there is a conflict of
interest which would prevent counsel for the indemnifying party from
also representing the indemnified party, the indemnified party or
parties shall have the right to select separate counsel to participate
in the defense of such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party pursuant to the
provisions of said paragraph (a) or (b) for any legal or other expense
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation, unless (i)
the indemnified party shall have employed counsel in accordance with the
proviso of the preceding sentence, (ii) the indemnified party shall not
have employed counsel satisfactory to the indemnified party to represent
the indemnfied party within a reasonable time after the notice of the
commencement of the action, or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party.
5. REGISTRATION RIGHTS OF TRANSFEREES. The registration rights granted
to the holders of Purchased Shares pursuant to the provisions hereof shall
also be for the benefit of, and enforceable by, any subsequent holder of
Purchased Shares who is (i) a family member of any individual Investor, or
(ii) a trust, limited liability company or other entity formed for the
benefit of any of Investor's family members or descendents.
