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Exhibit 10.22
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), 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 THE SECURITIES 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 THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS IS NOT REQUIRED.
Warrant Number Date: June 7, 2000 Warrant to Purchase
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Shares
INFORMATION ARCHITECTS CORPORATION
(Incorporated under the laws of the State of North Carolina)
WARRANT FOR THE PURCHASE OF SHARES OF
THE $.001 PAR VALUE COMMON STOCK OF
INFORMATION ARCHITECTS CORPORATION
Warrant Price: $7.00 per share, subject to adjustment as provided below.
THIS IS TO CERTIFY that, for value received,
_______________________________ and its registered assigns (collectively, the
"Holder"), is entitled to purchase, subject to the terms and conditions
hereinafter set forth, up to ______ shares of the $.001 par value Common Stock
("Common Stock") of Information Architects Corporation, a North Carolina
corporation (the "Company"), and to receive certificate(s) for the Common Stock
so purchased.
1. EXERCISE PERIOD AND VESTING. This Warrant (the "Warrant") is issued by the
Company pursuant to that certain Subscription Agreement, by and between the
Company and Holder pertaining to the private placement of securities of the
Company (including this Warrant) undertaken by the Company commencing on June 1,
2000 (the "Agreement"). The "Exercise Period" is the period beginning on August
11, 2000 [65 days after the date of the Warrant] and ending at 5:00 p.m.,
Dallas, Texas time, on June 7, 2005 (the "Exercise Period"). This Warrant will
terminate automatically and immediately upon the expiration of the Exercise
Period.
2. EXERCISE OF WARRANT. 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"), in cash, by wire transfer or by
certified check or bank cashier's check, payable to the order of the Company,
together with presentation and surrender to the Company of this Warrant with an
executed subscription in substantially the form attached hereto as Exhibit A
(the "Subscription"). 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 transferee (as permitted under Section 3 below). 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, a properly executed Subscription 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
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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 to the
Holder covering the aggregate number of shares of Common Stock as to which this
Warrant remains exercisable for.
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 reasonably
satisfactory to 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 of the aforesaid condition,
this Warrant and the underlying 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, the Company shall, upon surrender
of this Warrant to the Company, 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 similar to the legend at the top of this Warrant on
any replacement Warrant and on each certificate representing shares issuable
upon exercise of this Warrant or any replacement Warrants. 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.
(c) For the purposes of this Section 4, the following terms
shall have the following meanings:
"Equity Securities" means all capital stock of the
Company, plus all rights, warrants, options, convertible
securities or indebtedness, exchangeable securities or
indebtedness, or other rights, exercisable for or convertible
into, directly or indirectly, capital stock of the Company.
Notwithstanding the above, "Equity Securities" shall not
include any securities of the Company issued pursuant to any
incentive or stock option plan of the Company approved by the
shareholders of the Company.
"Final Closing Date" means the date of the last
closing of the Offering.
"Offering" means the private placement of Series A
Preferred Stock and warrants (including this Warrant)
undertaken by the Company commencing on June 1, 2000.
(d) In the event that on the 6-month anniversary of the Final
Closing Date (the "First Reset Date"), the average closing price for the Common
Stock during the five (5) consecutive trading days immediately prior to the
First Reset Date is less than the Exercise Price then in effect (the "First
Reset Price"), then the Exercise Price shall automatically be reduced to the
First Reset Price.
(e) In the event that on the one-year anniversary of the Final
Closing Date (the "Second Reset Date"), the average closing price for the Common
Stock during the five (5) consecutive trading days immediately prior to the
Second Reset Date is less than the Exercise Price then in effect (the "Second
Reset Price"), then the Exercise Price shall automatically be reduced to the
Second Reset Price.
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(f) In the event the Company issues any Equity Securities on
or prior to the Second Reset Date at a price less than the Exercise Price then
in effect (the "New Issuance Reset Price"), then the Exercise Price shall be
reduced to the New Issuance Reset Price. For purposes of this subsection (d),
the issuance price of the Equity Securities shall be the price paid for such
securities; provided, however, in the event of securities exercisable or
exchangeable for, or convertible into, Common Stock, the issuance price shall be
the exercise, exchange or conversion price (or if no price is provided for
(e.g., one share of preferred stock is convertible into one share of Common
Stock), then the price shall be the "as exercised, converted or exchanged" price
of Common Stock on the date of issuance of such Equity Securities).
(g) 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 on 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, at the same aggregate Warrant Price, 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, distribution,
subdivision, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur.
(h) 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, 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.
(i) 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, which per share price
shall be: (i) if the principal trading market for the Common Stock 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 Small Cap 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.
(j) 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,
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however, that any adjustments which by reason of this subsection (h) 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.
(k) In the event that at any time, as a result of an
adjustment made pursuant to subsection (e) 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.
(l) 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.
(m) 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.
7. REGISTRATION RIGHTS. This Warrant has not been registered under the
Securities Act, and has been issued to the Holder for investment and not with a
view to the distribution of either the Warrant or the underlying shares of
Common Stock. Neither this Warrant nor any of the underlying shares of Common
Stock or any other security issued or issuable upon exercise of this Warrant may
be sold, transferred, pledged or hypothecated in the absence of an effective
registration statement under the Securities Act relating to such security or an
opinion of counsel satisfactory to the Company that registration is not required
under the Securities Act. Each certificate for the Warrant, the underlying
shares of Common Stock and any other security issued or issuable upon exercise
of the Warrant shall contain a legend on the face thereof, in form and substance
satisfactory to counsel for the Company, setting forth the restrictions on
transfer contained in this Section. Notwithstanding the above, the Holder shall
be entitled to the benefits of the registration rights set forth in Appendix I
to the Agreement.
8. RESERVATION OF SHARES. The Company agrees at all times to reserve and hold
available out of its authorized but unissued shares of Common Stock the number
of shares of 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.
9. 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
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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, (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, 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.
10. 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.
11. REDEMPTION. If the average closing price of the Common Stock, as reported on
the Nasdaq Stock Market (or such other national exchange which the Common Stock
is then listed for trading), equals or exceeds 200% of the Warrant Price for any
ten (10) trading days within a thirty (30) consecutive trading day period, the
Company may, at its option, redeem the Warrants, at a redemption price of $.05
for each share of Common Stock underlying the Warrants. Holder will be given
notice of such redemption and will have the right to exercise this Warrant into
shares of Common Stock prior to the redemption date specified in such notice.
Notice of redemption of the Warrants, specifying the redemption date
and place of redemption, shall be given by first class mail to each Holder, at
such Holder's address of record, not less than 15 nor more than 30 calendar days
prior to the date upon which the Company shall redeem the Warrants (the
"Redemption Date"). Each such notice shall also specify the redemption price
applicable to the portion of the Warrant to be redeemed. If less than all the
shares of Common Stock underlying the Warrant are then to be redeemed, the
notice shall also specify the number of shares thereof which are to be redeemed
and the fact that a new Warrant representing that portion of the Warrant not so
redeemed shall be issued without cost to Holder.
Notwithstanding the foregoing, if notice of redemption shall have been
given pursuant to this Section 9 and any Holder shall, prior to the close of
business on the date three business days next preceding the Redemption Date,
convert this Warrant as provided in Section 2 above, then the redemption shall
not become effective as to such shares and the conversion shall become effective
as provided in Section 2 above.
Notwithstanding anything in this Section 9 to the contrary, the Company
may not redeem any Warrants (or portions thereof): (i) during the Initial Period
(as defined in Appendix I to the Agreement); or (ii) during the Second Period
(as defined in the Appendix I to the Agreement) if the Company is not in
compliance with Section 2.1 (b)(ii) of Appendix I to the Agreement.
12. ADDITIONAL COVENANTS OF THE COMPANY. The Company shall, upon exercise of
this Warrant, at its expense, promptly obtain and maintain the listing of all
shares of Common Stock underlying this Warrant for trading on any national or
regional securities exchange, Nasdaq market (national market system or small cap
system) or OTC Bulletin Board as other shares of Common Stock are then listed.
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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 or Certificate 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.
13. 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.
14. NOTICES. The Company agrees to maintain a ledger of the ownership of this
Warrant (the "Ledger"). Any notice hereunder shall be given by registered or
certified mail if to the Company, at its principal executive office and, if to
the Holder, to its address shown in the Ledger of the Company; provided,
however, 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.
15. 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.
16. GOVERNING LAW. This Warrant shall be governed by and construed in accordance
with the laws of the State of Texas without giving effect to the principles of
choice of laws thereof.
17. 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.
18. ENTIRE AGREEMENT. This Warrant (including the Exhibit 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 as of the date first set forth above.
INFORMATION ARCHITECTS CORPORATION
By: /s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
Chief Executive Officer
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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 Information Architects Corporation, a North
Carolina corporation (the "Company"), pursuant to and in accordance with the
terms and conditions of the attached Warrant (the "Warrant"), and hereby makes
payment of $_______ therefor by tendering cash, wire transferring or delivering
a certified check or bank cashier's check, payable to the order of the Company.
The undersigned requests that a certificate for the Stock be issued in the name
of the undersigned and be delivered to the undersigned at the address stated
below. If the Stock is not all of the shares purchasable pursuant to the
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 the 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 same as set forth on the
front page of the Warrant.
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:______________________________
______________________________
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Exhibit B
ASSIGNMENT
(To be Executed by the Holder to Effect Transfer of the Attached Warrant)
For Value Received __________________________ hereby sells, assigns and
transfers to _________________________ the Warrant attached hereto and the
rights represented thereby 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 such
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:
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Appendix I
REGISTRATION RIGHTS
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, par value $0.001
per share, as constituted on May 1, 2000, 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.
Holders: Investors in the Offering, and any assignees or successors or
successors thereof.
Offering: The private placement of Preferred Stock commenced by the
Company on June 1, 2000.
Person: A corporation, an association, a partnership, a limited
liability company, a joint venture, a trust, an organization, a business, an
entity, an individual, a government or political subdivision thereof or a
governmental body.
Preferred Stock: The Series A Preferred Stock, par value $.001 per
share, of the Company.
Registrable Securities: The Common Stock underlying the Preferred Stock
and the Warrants issued to investors in the Offering, 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 transferred or are transferable (in such
case, without volume limitation and subject to the Company being in compliance
with the requirements of Rule 144 so that Holder may sell the underlying Common
Stock under Rule 144) 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.
Securities Act: The Securities Act of 1933, as amended.
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.
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Subscription Agreement: The form of Subscription Agreement relating to
the Offering as executed by investors in the Offering and the Company and to
which this Appendix I is attached thereto.
Warrants: The warrants for the purchase of shares of Common Stock
issued to investors in the Offering as provided in the Subscription Agreement.
Capitalized terms used in this Appendix I but not otherwise defined
herein shall have the meanings ascribed to such terms in the Agreement.
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 Holders owning at least a majority of the then outstanding
Registrable Securities of all Holders requesting that the Company effect
pursuant to this Section 2.1 the registration of the requesting Holders'
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, notify all other Holders of such request
(and allowing them to participate therein), and use its best efforts to effect
the registration under the Securities Act of the Registrable Securities of all
Holders which the Company has been so requested to register.
(b) The Company shall not be obligated to take any action to effect any
registration requested by the Holders pursuant to subsection (a) above: (i)
during the initial sixty-five (65) day period commencing on the date of the
final closing of the Offering (the "Initial Period"); (ii) if the Form S-3
registration statement described in Section 2.3 below is filed and becomes
effective during the Initial Period, then during the period that such Form S-3
registration statement remains effective (it being agreed and understood that
the Company shall only be obligated to keep such Form S-3 registration statement
effective for a period of twelve (12) months following the date of the last
closing of the Offering) (the "Second Period"); (iii) after two years from the
date of the final closing of the Offering; or (iv) after the Company has
effected one (1) registration pursuant to this Section 2.1 and 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 a requesting Holder, in its sole
discretion, to proceed with such registration shall be deemed to have been
effected by the Company at the request of the Holders unless the requesting
Holder shall have elected to pay all Company Registration Expenses (as defined
in Section 4 below) 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
any participating Holder, 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 any participating Holder.
(d) The Company shall not be obligated to effect any registration
pursuant to this Section 2.1 within 90 days after the effective date of any
underwritten public offering by the Company or of any previous registration
withdrawn at the request of the requesting Holders. The Company may postpone for
up to 90 days the filing or the effectiveness of a registration statement for a
registration pursuant to this Section 2.1 if the financial advisor and/or
underwriter to the Company certifies to the holders of the Registrable
Securities that such registration would reasonably be expected to
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have a material adverse effect on the Company; provided, however, that in such
event the Holders of Registrable Securities requesting such Registration shall
be entitled to withdraw such request and, if such request is withdrawn, such
Registration shall not count as the one permitted registration under this
Section 2.1 and the Company shall pay all Registration Expenses in connection
with such postponed or withdrawn registration. Notwithstanding the above, the
Company may delay a demand registration pursuant to this Section 2.1 only once
in any twelve-month period.
2.2. Incidental Registration.
(a) If the Company at any time proposes to register any of its equity
securities under the Securities Act (excluding a registration of securities of
the Company issued to King, L.L.C.) 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
Holders of the Company's 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
Holders' written indication of whether the Holders wish to include their
Registrable Securities in such registration statement and advising the Holders
of their rights under this Section 2.2. Upon the written request of any 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 such Holder),
the Company will, to the extent permitted under Section 7, use its best efforts
to cause all such Registrable Securities, which the Holders have 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 Holders 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.
2.3. S-3 Registration. Within ten (10) business days following the
final closing of the Offering, the Company shall file a registration statement
covering the Registrable Securities under the Securities Act on Form S-3. The
Company will use all commercially reasonable efforts to cause such registration
statement to become effective as soon as possible after such filing (but in no
event later than sixty-five (65) days following the final closing of the
Offering), and will notify each Holder once it becomes effective. The Company
will maintain the effectiveness of such registration statement during the Second
Period. Notwithstanding anything in this Appendix I to the contrary, Holder
shall not be entitled to exercise its rights under Sections 2.1 or 2.2 above
during the following periods: (i) the Initial Period; or (ii) the Second Period
(if, but only if, the conditions set forth in Section 2.1 (b)(ii) are
satisfied).
3. Registration Procedures
If and whenever the Company is required by the provisions hereof 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 requisite Holders to
register Registrable Securities) a registration statement with respect to such
Registrable Securities and use all commercially reasonable efforts to cause such
registration statement to become and remain effective (provided that,
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before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company will furnish to one counsel selected by the
Holders copies of all such documents proposed to be filed, which documents will
be subject to the review of such counsel; provided further, however, that the
registration statement to be filed under Section 2.3 above shall become
effective within sixty-five (65) days following the final closing of the
Offering);
(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 Holders and each underwriter of the
securities being sold by the Holders 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
participating Holders;
(d) use all commercially reasonable efforts to register or qualify such
Registrable Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the Holders shall
reasonably request, and do any and all other acts and things which may be
necessary or advisable to enable the Holders and any underwriter to consummate
the disposition in such jurisdictions of such Registrable Securities owned by
the participating Holders, 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 subsection(d), it
would not be obligated to be so qualified, or to subject itself to taxation in
any such jurisdiction;
(e) use all commercially reasonable efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities within the United
States as may be reasonably necessary to enable the participating Holders to
consummate the disposition of its Registrable Securities;
(f) notify the participating Holders 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 participating Holders 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 all commercially reasonable efforts to comply with
all applicable rules and regulations of the Commission;
(h) use all commercially reasonable efforts (1) to cause all such
Registrable Securities covered by such registration statement to be listed on
the same national securities exchange, Nasdaq national or small cap market
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system, the "OTC Bulletin Board Market" of the National Association of
Securities Dealers Automated Quotation System and such regional exchanges as the
Common Stock is then listed on;
(i) enter into such agreements (including an underwriting agreement in
customary form) and take such other actions as the Holder shall reasonably
request in order to expedite or facilitate the disposition of its Registrable
Securities (it being agreed and understood that underwriters shall only be used
if all Holders agree to sell their Registrable Securities through such
underwriters);
(j) in the case of a registration instituted pursuant section 2.1 (if
typically requested in a registration of the type being undertaken), to use its
best efforts to furnish to any participating Holder an opinion from the
Company's counsel and a "cold comfort" letter from the Company's independent
public accountants, addressed to such participating Holder, in customary form
and covering such matters of the type customarily covered by such opinions and
"cold comfort" letters as such participating Holder shall reasonably request;
(k) make available for inspection by any participating 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 any participating Holder, underwriter,
attorney, accountant or agent in connection with such registration statement;
(l) permit the Holder (1) to participate in the preparation of such
registration or comparable statement, and (2) to receive such documents and make
such requests as any participating 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 Holders 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 subsection (f) above, the
Holders will forthwith discontinue their disposition of Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until the Holders' receipt of the copies of the supplemented or amended
prospectus contemplated by said subsection 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 Holders' 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 subsection (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 Holders shall have received the copies of the
supplemented or amended prospectus contemplated by subsection (f) above.
In connection with the registration of the Registrable Securities, each
Holders shall have the following obligations:
(i) As a condition precedent to the obligations of the Company to
complete the registration pursuant to this Appendix I with respect to the
Registrable Securities of a particular Holder, such Holder must 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
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and shall execute such documents in connection with such registration as the
Company may reasonably request. The Company shall furnish to Holder written
notice of the anticipated filing date at least ten (10) days prior to such
anticipated filing date, and if at least two business days prior to the
anticipated filing date the Company has not received the requested information
from a Holder (a "Non-Responsive Holder"), then the Company may file the
Registration Statement without including Registrable Securities of such
Non-Responsive Holder and have no further obligations to the Non-Responsive
Holder with respect to that particular registration statement.
(ii) Such Holder, by its acceptance of the Registrable Securities,
agrees to reasonably cooperate with the Company in connection with the
preparation and filing of the Registration Statement hereunder, unless such
Holder has notified the Company in writing of its election to exclude all of its
Registrable Securities from such registration statement.
(iii) Such Holder shall notify the Company of the occurrence of any
event, as a result of which the Prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, as promptly as practicable after becoming aware of such
event.
If any such registration or comparable statement refers to any
participating Holder by name or otherwise as the holder of any securities of the
Company, but such reference to such participating Holder by name or otherwise is
not required by the Securities Act or any similar federal statute then in force,
then such participating Holder shall have the right to require the deletion of
the reference to such participating Holder.
4. Registration Expenses
In connection with any registration of Registrable Securities pursuant
to Section 2.1, 2.2 or 2.3, 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) and other Persons retained by the Company, reasonable fees and
disbursements of one counsel or firm of counsel retained by the Holders (as a
group) (not to exceed $3,000) and any fees and disbursements of underwriters
customarily paid by issuers or sellers 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, each Holder and each Person, if any, who controls each 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
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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 or is caused by
the Holder Indemnified Party failing to deliver or cause to be delivered a
prospectus made available by the Company (it being the obligation of the Company
to cause such prospectus to be in compliance with the Securities Act). No
settlement of a claim for indemnification under this subsection (a) may be made
by a Holder Indemnified Party without the prior written consent of the Company,
which consent shall not be unreasonably withheld.
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, however, 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.
In connection with any registration statement in which any Holder is
participating, such participating 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 such participating 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
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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, no Holder shall be required to contribute any amount in excess of the
amount such Holder would have been required to pay to an indemnified party if
the indemnity under subdivision (a) of this Section 5 was available. 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 any 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 Registrable
Securities to be included in such registration shall be subject to such
underwriting agreement and no Person may participate in such 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 Holders 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 Holders, 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 (or
securities of other Persons exercising "demand rights") sought to be registered
shall be included in such registration, and (ii) next, the number of Registrable
Securities and other securities of holders
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exercising "piggyback rights" shall be included in such registration to the
extent permitted by the Company's managing underwriter (if the offering is
underwritten) with the number of Registrable Securities and such other
securities being registered being on a pro rata basis based on the number of
securities the participating Holders and each such other holder desire to have
registered; provided, however, that, if any participating 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, such
participating Holder may withdraw all or any portion 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 participating Holders shall be deemed to have agreed by
acquisition of their 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 their 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. In such event, such participating Holders agree, if
requested, to sign a customary market stand-off letter with the Company's
managing underwriter, and to comply with applicable rules and regulations of the
Commission.
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 any Holder may reasonably request,
or to the extent required from time to time to enable the Holders to sell their
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 (collectively, "Rule 144"). Upon
request of any Holder, the Company will deliver to such 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 any Person any
Company rights with respect to the registration of any securities of the Company
under the Securities Act, such rights shall not be in conflict with any of the
rights provided herein to the Holders.
11. Transfer of Registration Rights
If and to the extent that any Holder sells or otherwise disposes of
Registrable Securities in any transaction that does not require registration
under the Securities Act (other than a transaction exempt under Rule 144), the
rights of the Holder hereunder with respect to such Registrable Securities will
be assignable to the transferee of such Registrable Securities; provided,
however, that such transferee agrees in writing to be bound by all the terms and
conditions of this Appendix I.
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