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EXHIBIT 4.2
TRUBION PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
JULY 13, 2004
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TABLE OF CONTENTS
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I.
GENERAL.............................................................
2
1.1
Definitions....................................................
2
II. REGISTRATION;
RESTRICTIONS ON TRANSFER.............................. 3
2.1 Restrictions on
Transfer....................................... 3
2.2 Demand
Registration............................................
5
2.3 Piggyback
Registrations........................................ 7
2.4 Form S-3
Registration.......................................... 8
2.5 Expenses of
Registration....................................... 9
2.6 Obligations of the
Company..................................... 10
2.7 Termination of
Registration Rights............................. 13
2.8 Delay of Registration;
Furnishing Information.................. 13
2.9
Indemnification................................................
13
2.10
Assignment of
Registration Rights.............................. 15
2.11
Limitation on
Subsequent Registration Rights................... 16
2.12
"Market
Stand-Off" Agreement; Agreement to Furnish
Information....................................................
16
2.13
Rule 144
Reporting............................................. 17
III. INFORMATION COVENANTS OF THE
COMPANY................................ 18
3.1 Basic Financial
Information and Reporting...................... 18
3.2 Inspection
Rights.............................................. 19
3.3 Confidentiality of
Records..................................... 19
IV. RIGHTS OF
PARTICIPATION.............................................
19
4.1 Subsequent
Offerings........................................... 19
4.2 Exercise of
Rights............................................. 20
4.3 Issuance of Offered
Securities to Other Persons................ 20
4.4 Termination of Rights
of Participation......................... 20
4.5 Transfer of Rights of
Participation............................ 20
4.6 Offered
Securities.............................................
20
4.7 No
Impairment..................................................
22
4.8
Closing........................................................
22
V. MISCELLANEOUS
COVENANTS OF THE COMPANY.............................. 22
5.1 Reservation of Common
Stock.................................... 22
5.2 Proprietary
Information and Invention Agreement................ 22
5.3 Stock Compensation
Approval.................................... 23
5.4 Right of First Refusal
on Employee Stock....................... 23
5.5 Use of
Proceeds................................................
23
5.6 Qualified Small
Business Stock Status.......................... 23
5.7 Directors and Officers
Indemnification......................... 23
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TABLE OF CONTENTS
(CONTINUED)
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5.8 Directors' and
Officers' Insurance............................. 23
5.9 Chief Executive
Officer........................................ 23
5.10
Directors'
Expenses............................................ 24
5.11
Termination of
Covenants....................................... 24
VI.
MISCELLANEOUS.......................................................
24
6.1 Governing
Law.................................................. 24
6.2
Survival.......................................................
24
6.3 Successors and
Assigns......................................... 24
6.4 Entire
Agreement...............................................
24
6.5 Amendment and
Waiver........................................... 24
6.6 Notices,
Etc................................................... 25
6.7 Delays or
Omissions............................................ 26
6.8
Counterparts...................................................
26
6.9 Telecopy Execution and
Delivery................................ 26
6.10
Severability...................................................
26
6.11
Attorneys'
Fees................................................ 26
6.12
Aggregation of
Stock........................................... 26
6.13
Jurisdiction;
Venue............................................ 26
6.14
Further
Assurances.............................................
27
6.15
Prior Rights
Agreement......................................... 27
6.16
Waiver.........................................................
27
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TRUBION PHARMACEUTICALS, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
This
Amended and Restated Investor Rights Agreement (the "AGREEMENT")
is
entered into as of the 13th day of July 2004, by and among
Trubion
Pharmaceuticals, Inc., a Delaware corporation (the "COMPANY"), and
the investors
set forth on EXHIBIT A hereto (collectively the "INVESTORS" and
each
individually an "INVESTOR").
RECITALS
WHEREAS, the Company and certain of the Investors (the "SERIES
B
INVESTORS") have entered into a Series B Preferred Stock Purchase
Agreement (the
"PURCHASE AGREEMENT") of even date herewith pursuant to which the
Company
desires to sell to such Investors and such Investors desire to
purchase from the
Company shares of the Company's Series B Preferred Stock (the
"SERIES B
PREFERRED").
WHEREAS, a condition
to the Series B Investors' obligations under the
Purchase Agreement is that the Company and the Investors enter into
this
Agreement in order to provide (i) the Investors with certain rights
to register
shares of the Company's Common Stock issuable upon conversion of
the Series A
Preferred Stock of the Company (the "SERIES A PREFERRED," and
together with the
Series B Preferred, the "PREFERRED STOCK") and the Series B
Preferred held by
the Investors, and certain rights to receive or inspect information
pertaining
to the Company, and (ii) the Participating Investors (as defined
herein) a right
of first offer with respect to certain issuances by the Company of
its
securities.
WHEREAS, certain of the Investors (the "EXISTING INVESTORS") hold
shares of
the Series A Preferred and possess certain registration rights,
information
rights, rights of first offer, and other rights pursuant to the
Investor Rights
Agreement dated as of November 19, 2002 among the Company and the
Existing
Investors (the "PRIOR RIGHTS AGREEMENT");
WHEREAS, the Company and the Existing Investors desire to amend the
Prior
Rights Agreement and further desire that this Agreement supersede
and replace
the Prior Rights Agreement in its entirety; and
WHEREAS, pursuant to Section 6.5 of the Prior Rights Agreement, the
written
consent of the Company and the Existing Investors holding a
majority of the
Registrable Securities (as such term is defined in the Prior Rights
Agreement)
(the "REQUISITE HOLDERS") is required to amend the Prior Rights
Agreement.
NOW,
THEREFORE, in consideration of the mutual promises,
representations,
warranties, covenants and conditions set forth in this Agreement,
the parties
hereto agree as follows:
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I. GENERAL.
1.1
Definitions. As used in this Agreement the following terms shall
have
the following respective meanings:
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FORM S-3" means such form under the Securities Act as in effect
on
the date hereof or any successor registration form under the
Securities Act
subsequently adopted by the SEC that permits inclusion or
incorporation of
substantial information by reference to other documents filed by
the Company
with the SEC.
"HOLDER" means any person owning of record Registrable Securities
that
have not been sold to the public, or any assignee of record of such
Registrable
Securities in accordance with SECTION 2.1 and SECTION 2.10
hereof.
"INITIAL OFFERING" means the Company's first public offering of
its
Common Stock registered under the Securities Act that is the
subject of a firm
underwriting commitment.
"INITIATING HOLDERS" shall mean any Holder or Holders who in
the
aggregate hold not less than fifty percent (50%) of the Registrable
Securities
then outstanding.
"QUALIFIED INITIAL OFFERING" means an Initial Offering in which
the
price to the public of the Company's Common Stock is not less than
$2.10 per
share (as appropriately adjusted for any stock split, stock
dividend, stock
combination, recapitalization or similar event) and which results
in aggregate
cash proceeds to the Company of at least $35,000,000 (net of
underwriting
discounts and commissions).
"REGISTER," "REGISTERED," AND "REGISTRATION" refer to a
registration
effected by preparing and filing a registration statement in
compliance with the
Securities Act, and the declaration or ordering of effectiveness of
such
registration statement or document.
"REGISTRABLE SECURITIES" means (a) Common Stock of the Company
issued
or issuable upon conversion of the Shares, (b) Common Stock of the
Company
issued to Frazier Healthcare Fund ("FRAZIER"), ARCH Venture Fund
("ARCH") and
Scott Minick ("MINICK") pursuant to those certain Common Stock
Purchase
Agreements dated November 19, 2002 by and between the Company and
each of
Frazier, Arch and Minick and (c) any Common Stock of the Company
issued as (or
issuable upon the conversion or exercise of any warrant, right or
other security
which is issued as) a dividend or other distribution with respect
to, or in
exchange for or in replacement of, the securities described in (a)
and (b)
above. Notwithstanding the foregoing, Registrable Securities shall
not include
any securities sold by a person to the public pursuant to a
registration
statement or Rule 144 or sold in a private transaction in which the
transferor's
rights under SECTION 2 of this Agreement are not assigned.
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"REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number
of
shares determined by calculating the total number of shares of the
Company's
Common Stock that are Registrable Securities and either (a) are
then issued and
outstanding or (b) are issuable pursuant to then exercisable or
convertible
securities.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in effecting any registration under SECTIONS 2.2, 2.3 and
2.4 hereof,
including, without limitation, all registration, qualification, and
filing fees,
printing expenses, fees and disbursements of counsel for the
Company, reasonable
fees and disbursements of a single special counsel for the Holders,
blue sky
fees and expenses and the expense of any special audits incident to
or required
by any such registration (but excluding the compensation of regular
employees of
the Company, which shall be paid in any event by the Company, as
well as stock
transfer taxes, underwriting discounts and commissions or, except
as expressly
provided herein, fees of special counsel of individual selling
Holders).
"RULE 144" shall mean Rule 144 as promulgated by the SEC under
the
Securities Act, as such Rule may be amended from time to time, or
any similar
successor rule that may be promulgated by the SEC.
"SEC" OR "COMMISSION" means the United States Securities and
Exchange
Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SELLING EXPENSES" shall mean all underwriting discounts and
selling
commissions applicable to the sale.
"SHARES" shall mean the Company's Preferred Stock held by the
Investors and their permitted assigns.
II. REGISTRATION;
RESTRICTIONS ON TRANSFER
2.1
Restrictions on Transfer.
(a) Each Holder agrees not to make any disposition of all or
any
portion of the Shares or Registrable Securities unless and
until:
(i) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such
disposition is made
in accordance with such registration statement; or
(ii) (A) The transferee has agreed in writing to be bound by
the
terms of this Agreement, (B) such Holder shall have notified the
Company of the
proposed disposition and shall have furnished the Company with a
detailed
statement of the circumstances surrounding the proposed
disposition, and (C) if
reasonably requested by the Company, such Holder shall have
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furnished the Company with an opinion of counsel, reasonably
satisfactory to the
Company, that such disposition will not require registration of
such shares
under the Securities Act. It is agreed that the Company will not
require
opinions of counsel for transactions made pursuant to Rule 144
promulgated under
the Securities Act.
(iii) Notwithstanding the provisions of paragraphs (i) and (ii)
above, no such registration statement or opinion of counsel shall
be necessary
for a transfer by a Holder that is (A) a partnership to another
partnership or
corporation that is under common control with such partnership, or
to its
partners or former partners in accordance with partnership
interests, or to the
estate of any such partners, (B) a corporation to its stockholders
in accordance
with their interest in the corporation, or to a parent or
subsidiary of the
corporation, or another corporation that has the same parent as the
corporation,
(C) a limited liability company to its members or former members in
accordance
with their interest in the limited liability company, (D) a trust
to a
beneficiary or beneficiaries in accordance with their interest in
the trust, (E)
to the Holder's family members or trust for the benefit of an
individual Holder
or family members of the Holder, (F) to a partnership, limited
liability company
or other entity that is controlled by and was formed primarily for
the benefit
of an individual Holder or family members of the Holder, or (G) a
transfer not
involving a change in beneficial ownership; provided that in each
case the
transferee will be subject to the terms of this Agreement to the
same extent as
if such transferee were an original Holder hereunder.
(b) Each certificate representing Shares or Registrable
Securities
shall (unless otherwise permitted by the provisions of the
Agreement) be stamped
or otherwise imprinted with a legend substantially similar to the
following (in
addition to any legend required under applicable state securities
laws) unless,
in the opinion of counsel for the Company, such legend is not
required:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION
THEREFROM UNDER THE ACT, OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
SUCH
REGISTRATION IS NOT REQUIRED, IF SUCH OPINION IS REASONABLY
REQUESTED
BY THE COMPANY.
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN
RESTRICTIONS
ON TRANSFER INCLUDING A 180-DAY LOCKUP IN CONNECTION WITH AN
INITIAL
PUBLIC OFFERING AS SET FORTH IN THE INVESTOR RIGHTS AGREEMENT
BETWEEN
THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF
WHICH
MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH
TRANSFER
RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES.
(c) The Company shall be obligated to reissue promptly
unlegended
certificates at the request of any holder thereof if, in the
opinion of counsel
(which counsel may be counsel to the
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Company and which opinion shall be in writing and delivered to the
Company in a
form acceptable to the Company) reasonably acceptable to the
Company, the
securities proposed to be disposed of may lawfully be so disposed
of without
registration, qualification or legend.
(d) Any legend endorsed on an instrument pursuant to applicable
state
securities laws and the stop-transfer instructions with respect to
such
securities shall be removed upon receipt by the Company of an order
of the
appropriate blue sky authority authorizing such removal.
2.2
Demand
Registration.
(a) Subject to the conditions of this SECTION 2.2, if the
Company
shall receive a written request from the Initiating Holders that
the Company
file a registration statement under the Securities Act covering the
registration
of not less than twenty percent (20%) of the Registrable Securities
then
outstanding, then the Company shall promptly, but in any case not
later than
fifteen (15) days after the receipt thereof, give written notice of
such request
to all Holders and, subject to the limitations of this SECTION 2.2,
use its best
efforts to effect, as soon as practicable, and in any event within
sixty (60)
days of the receipt of such request, the registration under the
Securities Act
of all Registrable Securities that the Holders request to be
registered.
(b) If the Initiating Holders intend to distribute the
Registrable
Securities covered by their request by means of an underwriting,
they shall so
advise the Company as a part of their request made pursuant to this
SECTION 2.2
or any request pursuant to SECTION 2.4, and the Company shall
include such
information in the written notice it provides to the Holders
referred to in
SECTION 2.2(A) or SECTION 2.4(A), as applicable. In such event, the
right of any
Holder to include its Registrable Securities in such registration
shall be
conditioned upon such Holder's participation in such underwriting
and the
inclusion of such Holder's Registrable Securities in the
underwriting to the
extent provided herein. A Holder may elect to include in such
underwriting all
or fewer than all of the Registrable Securities he holds. All
Holders proposing
to distribute their securities through such underwriting shall
(together with
the Company) enter into an underwriting agreement in customary form
with the
underwriter or underwriters selected for such underwriting by a
majority in
interest of the Initiating Holders (which underwriter or
underwriters shall be
reasonably acceptable to the Company) and customary selling
stockholder
documents, including a custody agreement and power of attorney.
Notwithstanding
any other provision of this SECTION 2.2 or SECTION 2.4, if the
underwriter
advises the Company in writing that marketing factors require a
limitation of
the number of securities to be underwritten (including Registrable
Securities)
then the Company shall so advise all Holders of Registrable
Securities which
would otherwise be underwritten pursuant hereto, and the number of
Registrable
Securities that may be included in the underwriting shall be
allocated among all
Holders that have elected to include their securities in the
registration in
proportion (as nearly as practicable) to the total number of
Registrable
Securities held by each such Holder; provided however, that the
number of shares
of Registrable Securities to be included in such underwriting and
registration
shall not be reduced unless all other securities of the Company are
first
entirely excluded from the underwriting and registration. Any
Registrable
Securities excluded or withdrawn from such underwriting shall be
withdrawn from
the registration.
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If a person who has requested inclusion in such registration as
provided above does not agree to the terms of any such
underwriting, such person
may withdraw therefrom by written notice to the Company, the
underwriter or the
Initiating Holders. Any Registrable Securities or other securities
excluded or
withdrawn from such underwriting shall also be withdrawn from such
registration.
If shares are so withdrawn from the registration and if the number
of shares to
be included in such registration was previously reduced as a result
of marketing
factors pursuant to this SECTION 2.2(B), then the Company shall
offer to all
Holders who have not so withdrawn their securities from the
registration the
right to include additional securities in the registration in an
aggregate
amount equal to the number of shares so withdrawn, with such shares
to be
allocated among the Holders of Registrable Securities requesting
additional
inclusion in proportion (as nearly as practicable) to the amount of
Registrable
Securities owned by each such Holder. For any Holder that is a
partnership or
corporation, the partners, retired partners and stockholders of
such Holder, or
the estates and family members of any such partners and retired
partners and any
trusts for the benefit of any of the foregoing persons shall be
deemed a single
"Holder," and any pro rata reduction with respect to such "Holder"
shall be
based upon the aggregate amount of shares carrying registration
rights owned by
all entities and individuals included in such "Holder" as defined
in this
sentence.
(c) The Company shall not be required to effect a registration
pursuant to this SECTION 2.2:
(i) if the anticipated aggregate offering price, net of
underwriting discounts and commissions, would not exceed
$5,000,000;
(ii) prior to the earlier of (A) three (3) years from the date
of
this Agreement and (B) 180 days following the effective date of the
registration
statement pertaining to the Initial Offering;
(iii) after the Company has effected two (2) registrations
pursuant to this SECTION 2.2, and such registrations have been
declared or
ordered effective;
(iv) if, within thirty (30) days of receipt of a written
request
from the Initiating Holders pursuant to SECTION 2.2(A), the Company
gives notice
to the Holders of the Company's intention to make a public offering
within
ninety (90) days; provided that the Company makes reasonable good
faith efforts
to cause the registration statement in connection with any such
public offering
to become effective;
(v) if the Company shall furnish to Holders requesting a
registration statement pursuant to this SECTION 2.2 a certificate
signed by the
Chief Executive Officer of the Company stating that in the good
faith judgment
of the Board of Directors of the Company, it would be seriously
detrimental to
the Company and its stockholders for such registration statement to
be effected
at such time, and the Board of Directors concludes, as a result,
that it is
therefore essential to defer such filing for a period of not more
than ninety
(90) days after receipt of the request of the Initiating Holders;
provided that
such right to delay a request shall be exercised by the Company not
more than
once in any 12-month period; or
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(vi) if the Initiating Holders propose to dispose of shares of
Registrable Securities that may be immediately registered on Form
S-3 pursuant
to a request made pursuant to SECTION 2.4 below.
2.3
Piggyback
Registrations.
(a) The Company shall notify all Holders of Registrable Securities
in
writing at least thirty (30) days prior to the filing of any
registration
statement under the Securities Act for purposes of a public
offering of
securities of the Company (including, but not limited to, a
registration
effected for stockholders other than the Holders, registration
statements
relating to its Initial Offering and to secondary offerings of
securities of the
Company, but excluding registration statements relating to employee
benefit
plans, exchange offers or debt securities or with respect to
corporate
reorganizations or other transactions under Rule 145 of the
Securities Act).
Each Holder desiring to include in any such registration statement
all or any
part of the Registrable Securities held by it shall, within twenty
(20) days
after receipt of the above-described notice from the Company, so
notify the
Company in writing. In such written notification, a Holder may
request that all
or a part of a Holder's Registrable Securities be included in such
registration.
The Company shall, subject to the provisions of SECTION 2.3(B)
below, include in
such registration (and any related qualification under Blue Sky
laws or other
compliance) all the Registrable Securities that each such Holder
has requested
to be registered. If a Holder decides not to include all of his
Registrable
Securities, or if the number of Registrable Securities to be
included is reduced
to fewer than all of his Registrable Securities pursuant to SECTION
2.3(B)
below, in any registration statement thereafter filed by the
Company, such
Holder shall nevertheless continue to have the right to include any
Registrable
Securities in any subsequent registration statement or registration
statements
as may be filed by the Company with respect to offerings of its
securities, all
upon the terms and conditions set forth herein.
(b) If the registration statement under which the Company gives
notice
under this SECTION 2.3 is for an underwritten offering, the Company
shall so
advise the Holders of Registrable Securities in the written notice
provided
pursuant to SECTION 2.3(A) above. In such event, the right of any
such Holder to
be included in a registration pursuant to this SECTION 2.3 shall be
conditioned
upon such Holder's participation in such underwriting and the
inclusion of such
Holder's Registrable Securities in the underwriting to the extent
provided
herein. All Holders proposing to distribute their Registrable
Securities through
such underwriting shall enter into an underwriting agreement
(together with the
Company and the other Holders of securities of the Company with
registration
rights to participate therein distributing their securities through
such
underwriting) in customary form with the underwriter or
underwriters selected
for such underwriting by the Company and reasonably acceptable to
the Holders as
agreed upon by the Company and the underwriters, and customary
selling
stockholder documents, including a custody agreement and power of
attorney.
Notwithstanding any other provision of the Agreement, if the
underwriters
determine in good faith that marketing factors require a limitation
of the
number of shares to be underwritten to ensure the success of the
offering, the
number of shares that may be included in the underwriting shall be
allocated,
first, to the Company; second, to the Holders on a pro rata basis
based on the
total number of Registrable Securities held by each such Holder;
and, third, to
any other selling stockholders of
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the Company on a pro rata basis based on the total number of
Registrable
Securities held by each such selling stockholder. Notwithstanding
the foregoing,
no such reduction shall reduce the amount of securities of the
Holders included
in the registration below thirty percent (30%) of the total amount
of securities
included in such registration, unless such offering is the
Qualified Initial
Offering and such registration does not include shares of any other
selling
stockholders, in which event any or all of the Registrable
Securities of the
Holders may be excluded in accordance with the immediately
preceding sentence.
If any Holder disapproves of the terms of any such underwriting,
such Holder may
elect to withdraw therefrom by written notice to the Company and
the
underwriter, delivered at least ten (10) business days prior to the
effective
date of the registration statement. Any Registrable Securities
excluded or
withdrawn from such underwriting shall be excluded and withdrawn
from the
registration. If shares are so withdrawn from the registration and
if the number
of shares of Registrable Securities to be included in such
registration was
previously reduced as a result of marketing factors, the Company
shall then
offer to all persons who have not so withdrawn their securities
from the
registration and otherwise have the right to include securities in
the
registration the right to include additional securities in the
registration in
an aggregate amount equal to the number of shares so withdrawn,
with such shares
to be allocated first to the Holders requesting additional
inclusion on a pro
rata basis and then to any other selling stockholders of the
Company requesting
additional inclusion on a pro rata basis. For any Holder that is a
partnership
or corporation, the partners, retired partners and stockholders of
such Holder,
or the estates and family members of any such partners and retired
partners and
any trusts for the benefit of any of the foregoing persons shall be
deemed a
single "Holder," and any pro rata reduction with respect to such
"Holder" shall
be based upon the aggregate amount of shares carrying registration
rights owned
by all entities and individuals included in such "Holder" as
defined in this
sentence.
(c) The Company shall have the right to terminate or withdraw
any
registration initiated by it under this SECTION 2.3 prior to the
effectiveness
of such registration whether or not any Holder has elected to
include securities
in such registration. The Registration Expenses of such withdrawn
registration
shall be borne by the Company in accordance with SECTION 2.5
hereof.
2.4
Form S-3 Registration. After the Company's Initial Offering,
the
Company shall use its best efforts to qualify for registration on
Form S-3 or
any comparable or successor form or forms. In case the Company
shall receive
from any Holder or Holders of Registrable Securities a written
request or
requests that the Company effect a registration on Form S-3 or any
similar
short-form registration statement and any related qualification or
compliance
with respect to all or a part of the Registrable Securities owned
by such Holder
or Holders, the Company will:
(a) promptly give written notice of the proposed registration, and
any
related qualification or compliance, to all other Holders of
Registrable
Securities; and
(b) as soon as practicable, effect such registration and all
such
qualifications and compliances as may be so requested and as would
permit or
facilitate the sale and distribution of all or such portion of such
Holder's or
Holders' Registrable Securities as are specified in such request,
together with
all or such portion of the Registrable Securities of any other
Holder or
Holders, joining in such request as are specified in a written
request given
within twenty (20) days after receipt of
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such written notice from the Company; provided, however, that the
Company shall
not be obligated to effect any such registration, qualification or
compliance
pursuant to this SECTION 2.4:
(i) if Form S-3 (or any successor or similar form) is not
available for such offering by the Holders;
(ii) if the Holders, together with the holders of any other
securities of the Company entitled to inclusion in such
registration, propose to
sell Registrable Securities and such other securities (if any) at
an aggregate
price to the public of less than one million dollars
($1,000,000);
(iii) if the Company shall furnish to the Holders a certificate
signed by the Chief Executive Officer or President of the Company
stating that
in the good faith judgment of the Board of Directors of the
Company, it would be
seriously detrimental to the Company and its stockholders for such
Form S-3
registration to be effected at such time, and the Board of
Directors concludes,
as a result, that it is, therefore, essential to defer the filing
of the Form
S-3 registration statement for a period of not more than ninety
(90) days after
receipt of the request of the Holder or Holders under this SECTION
2.4;
provided, that such right to delay a request shall be exercised by
the Company
not more than once in any 12-month period; or
(iv) after the Company has effected four (4) registrations on
Form S-3 for the Holders pursuant to this SECTION 2.4, and such
registrations
have been declared or ordered effective.
(c) Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and
other securities
so requested to be registered as soon as practicable after receipt
of the
request or requests of the Holders. Registrations effected pursuant
to this
SECTION 2.4 shall not be counted as demands for registration or
registrations
effected pursuant to SECTION 2.2 or 2.3, respectively.
2.5
Expenses of Registration. Except as specifically provided herein,
all
Registration Expenses incurred in connection with any
registration,
qualification or compliance pursuant to SECTION 2.2, SECTION 2.3 or
SECTION 2.4
herein shall be borne by the Company. All Selling Expenses incurred
in
connection with any registrations hereunder shall be borne by the
holders of the
securities so registered pro rata on the basis of the number of
shares so
registered. The Company shall not, however, be required to pay for
expenses of
any registration proceeding begun pursuant to SECTION 2.2 if the
request for
such registration has been subsequently withdrawn by the Initiating
Holders
unless (a) the withdrawal is based upon material adverse
information concerning
the Company of which the Initiating Holders were not aware at the
time of such
request or (b) the Holders of a majority of Registrable Securities
agree to
forfeit their right to one requested registration pursuant to
SECTION 2.2, in
which event such right shall be forfeited by all Holders. If the
Holders are
required to pay the Registration Expenses, such expenses shall be
borne by the
holders of securities (including Registrable Securities) requesting
such
registration in proportion to the number of shares for which
registration was
requested. If the Company is required to pay the Registration
Expenses of a
withdrawn offering pursuant to clause (a) above, or if the Holders
agree
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to pay the Registration Expenses of a withdrawn offering, other
than an offering
withdrawn pursuant to clause (a) above, then the Holders shall not
forfeit their
rights pursuant to SECTION 2.2 to a demand registration.
2.6
Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities, the Company shall, as
expeditiously
as reasonably possible:
(a) Prior to the filing of the registration statement and each
amendment thereof (including any documents incorporated by
reference in such
registration statement) and each amendment or supplement to the
prospectus, make
available for inspection by the Holders of Registrable Securities
covered by
such registration statement and any attorney, accountant, or other
agent
retained by such Holders all relevant financial and other records,
pertinent
corporate documents, and properties of the Company and its
subsidiaries, if any,
and shall cause the officers, directors, and employees of the
Company to make
reasonably available for inspection all other relevant information
reasonably
requested by such Holders in connection therewith, in each case as
is customary
for similar due diligence examinations; provided, however, that any
information
that is designated in writing by the Company, in good faith, as
confidential at
the time of delivery of such information shall be kept confidential
by the
Holders or any such attorney, accountant, or agent, unless such
disclosure is
required by law after notice to the Company, or such information
becomes
available to the public generally or through a third party without
an
accompanying obligation of confidentiality.
(b) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to
cause such
registration statement to become effective, and, upon the request
of the Holders
holding a majority of the Registrable Securities registered
thereunder, keep
such registration statement effective for up to 120 days or, if
earlier, until
the Holder or Holders have completed the distribution related
thereto.
(c) Prepare and file with the SEC such amendments and supplements
to
such registration statement and the prospectus used in connection
with such
registration statement as may be necessary to comply with the
provisions of the
Securities Act (including the anti-fraud provisions thereof) with
respect to the
disposition of all securities covered by such registration
statement for the
period set forth in paragraph (b) above.
(d) Take such action as may be necessary so that (i) any
registration
statement, and any amendment thereto, and any prospectus forming a
part thereof,
and any amendment or supplement thereto (and each report or other
document
incorporated therein by reference in each case) complies in all
material
respects with the Securities Act and the Exchange Act, and the
respective rules
and regulations thereunder, (ii) any registration statement, and
any amendment
thereto, does not, when it becomes effective, contain 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, in the light of the
circumstances
under which they were made, not misleading, and (iii) any
prospectus forming
part of any registration statement, and any amendment or supplement
to such
prospectus, does not include an untrue statement of a material fact
or omit to
state a material fact necessary in
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order to make the statements, in the light of the circumstances
under which they
were made, not misleading.
(e) Furnish to the Holders such number of copies of a
prospectus,
including a preliminary prospectus, in conformity with the
requirements of the
Securities Act, and such other documents as they may reasonably
request in order
to facilitate the disposition of Registrable Securities owned by
them.
(f) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities
or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the
Holders;
provided that the Company shall not be required in connection
therewith or as a
condition thereto to qualify to do business or to file a general
consent to
service of process in any such states or jurisdictions.
(g) In the event of any underwritten public offering, enter into
and
perform its obligations under an underwriting agreement, in usual
and customary
form, with the managing underwriter(s) of such offering. Each
Holder
participating in such underwriting shall also enter into and
perform its
obligations under such an agreement.
(h) Notify each Holder holding Registrable Securities covered by
such
registration statement at any time when a prospectus relating
thereto is
required to be delivered under the Securities Act of the happening
of any event
as a result of which the prospectus included in such registration
statement, as
then in effect, includes an untrue statement of a material fact or
omits to
state a material fact required to be stated therein or necessary to
make the
statements therein not misleading in the light of the circumstances
then
existing, such obligation to continue until the earlier to occur of
120 days
after the effective date of such registration statement or until
the
distribution contemplated in the registration statement has been
completed. The
Company will use reasonable efforts to amend or supplement such
prospectus in
order to cause such prospectus not to include any untrue statement
of a material
fact or omit to state a material fact required to be stated therein
or necessary
to make the statements therein not misleading in the light of the
circumstances
then existing.
(i) Cause all such Registrable Securities registered hereunder to
be
listed on each securities exchange, or included in the Nasdaq Stock
Market or
similar quotation system, on which similar securities issued by the
Company are
then listed.
(j) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP numbe
