EXHIBIT 4.2
AUXILIUM PHARMACEUTICALS,
INC.
THIRD AMENDED AND
RESTATED
INVESTOR RIGHTS
AGREEMENT
THIS THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT (this “Agreement”) is entered
into as of October 31, 2003, by and among Auxilium Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), the
holders of the Company’s Series A Preferred Stock, par value
$0.01 per share (the “Series A Preferred Stock”), set
forth on Exhibit A (the “Series A Investors”),
the holders of the Company’s Series B Preferred Stock, par
value $0.01 per share (the “Series B Preferred Stock”),
set forth on Exhibit B (the “Series B
Investors”), the holders of the Company’s Series C
Preferred Stock, par value $0.01 per share (the “Series C
Preferred Stock”), set forth on Exhibit C (the
“Series C Investors”) and the holders of the
Company’s Series D Preferred Stock, par value $0.01 per share
(the “Series D Preferred Stock”), set forth on
Exhibit D (the “Series D Investors”).
RECITALS
WHEREAS, the Company, the Series A
Investors, the Series B Investors and the Series C Investors
entered into an Amended and Restated Investor Rights Agreement,
dated as of June 21, 2003 (the “Prior Investor Rights
Agreement”), in connection with the Company’s sale of
up to 10,283,336 shares of its Series C Preferred Stock to the
Series C Investors and warrants to purchase 3,085,001 shares of the
Company’s common stock, par value $0.01 per share (the
“Common Stock”);
WHEREAS, the Company and the Series
D Investors have entered into the Series D Preferred Stock Purchase
Agreement, dated of even date herewith (the “Purchase
Agreement”), providing for, among other things, the sale and
issuance of an aggregate of 28,752,365 shares of the Series D
Preferred Stock and warrants to purchase up to 8,634,339 shares of
the Series D Preferred Stock in accordance with the terms and
conditions set forth in the Purchase Agreement;
WHEREAS, Section 5.6 of the Prior
Investor Rights Agreement provides that such agreement may be
amended by the written agreement of the Company, the holders of at
least a majority of the shares of the Series A Preferred Stock, the
holders of at least a majority of the shares of the Series B
Preferred Stock, and the holders of at least a majority of the
shares of the Series C Preferred Stock;
WHEREAS, the Series A Investors that
are signatories hereto own at least a majority of the Series A
Preferred Stock necessary to amend the Investors’ Rights
Agreement;
WHEREAS, the Series B Investors that
are signatories hereto own at least a majority of the Series B
Preferred Stock necessary to amend the Investors’ Rights
Agreement;
WHEREAS, the Series C Investors that
are signatories hereto own at least a majority of the Series C
Preferred Stock necessary to amend the Investors’ Rights
Agreement;
WHEREAS, in order to induce the
Company to enter into the Purchase Agreement and to induce the
Series D Investors to invest funds in the Company pursuant to the
Purchase Agreement, the Series A Investors, the Series B Investors,
the Series C Investors and the Company hereby desire to amend and
restate the Prior Investor Rights Agreement, such that this
Agreement shall govern the rights of the Series A Investors, the
Series B Investors, the Series C Investors and the Series D
Investors (the Series A Investors, the Series B Investors, the
Series C Investors and the Series D Investors hereinafter
collectively referred to as the “Investors”) to cause
the Company to register its shares of Common Stock issuable to the
Investors upon conversion of the Series A Preferred Stock, the
Series B Preferred Stock, the Series C Preferred Stock and the
Series D Preferred Stock and to address certain other matters as
set forth herein; and
WHEREAS, the execution and delivery
of this Agreement by the Company and the Investors is a condition
to the closing of the issuance, sale and purchase of the Series D
Preferred Stock pursuant to the Purchase Agreement.
NOW, THEREFORE, in consideration of
the mutual promises, representations, warranties, covenants and
conditions set forth in this Agreement and the investment of the
Series D Investors in the Series D Preferred Stock, the parties,
intending to be legally bound hereby, mutually agree as
follows:
SECTION 1. 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 which 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
2.9.
“Initial Public
Offering” means
the Company’s first firm commitment underwritten public
offering of its Common Stock registered under the Securities
Act.
“Litigation”
means the litigation resulting from
the complaints filed against the Company, Auxilium Holdings, Inc.,
and Geraldine Henwood in the Superior Court of Delaware in April
2002 (C.A. No. 02C-03-208).
“Qualified Public
Offering” means
an underwritten, firm commitment public offering registered under
the Securities Act covering the offer and sale by the Company of
its Common Stock in which (i) the aggregate proceeds to the Company
equal or exceed $40,000,000 (calculated after deducting
underwriters’ discounts and commissions and other offering
expenses), and (ii) at a price per share to the public that is at
least two times the then applicable conversion price of the Series
D Preferred Stock.
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“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) any Common Stock of the
Company issued or issuable upon exercise and conversion, if
applicable, of the warrants issued to the Investors under the
Series A Preferred Stock Purchase Agreement, dated July 18, 2000,
by and among the Company and the Series A Investors, the Series B
Preferred Stock Purchase Agreement, dated October 12, 2001, by and
among the Company and the Series B Investors, the Series C
Preferred Stock Purchase Agreement, dated June 21, 2003, by and
among the Company and the Series C Investors and the Purchase
Agreement (collectively, the “Warrants”); 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, such above described
securities. 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.
“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 are then issued,
outstanding or issuable pursuant to then exercisable or convertible
securities.
“Registration
Expenses” shall
mean all expenses incurred by the Company in complying with
Sections 2.2, 2.3 and 2.4, including all registration 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).
“SEC” or “Commission” means
the 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 Series A Preferred Stock, the
Series B Preferred Stock, the Series C Preferred Stock and the
Series D Preferred Stock issued to the Investors and their
permitted assigns, and the shares of Series D Preferred Stock
issued or issuable upon the exercise and conversion, if applicable,
of the warrants to purchase Series D Preferred Stock issued to the
Investors under the Purchase Agreement.
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SECTION 2. REGISTRATION; RESTRICTIONS ON
TRANSFER
2.1 Restrictions on
Transfer.
(a) In addition to the restriction
of transfer contained in the Third Amended and Restated
Stockholders Agreement, dated as of the date hereof, no Holder
shall 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;
(ii) Such disposition is made
pursuant to and in compliance with Rule 144; or
(iii) (A) The proposed transferee
has agreed in writing to be bound by the terms of this Agreement by
executing a counterpart signature page in the form attached as
Annex A (the “Counterpart Signature Page”)
(which shall not be deemed to be an amendment hereto), (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
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.
Notwithstanding the provisions of
paragraphs (i), (ii) and (iii) above, no such registration
statement or opinion of counsel shall be necessary for a transfer
by a Holder which is: (A) a Holder’s transfer of any or all
shares held either during such Holder’s lifetime or on death
by will or intestacy to such Holder’s immediate family or to
any custodian or trustee for the account of such Holder or such
Holder’s immediate family (“immediate family” as
used herein shall mean spouse, lineal descendant, father, mother,
brother, or sister of the Holder making such transfer); (B) a
Holder’s transfer of any or all of such Holder’s shares
to the Company or to any other stockholder of the Company; (C) a
Holder’s transfer of any or all of such Holder’s shares
to a person who, at the time of such transfer, is an officer or
director of the Company; (D) a corporate Holder’s transfer of
any or all of its shares pursuant to and in accordance with the
terms of any merger, consolidation, reclassification of shares or
capital reorganization of the corporate Holder, or pursuant to a
sale of all or substantially all of the stock or assets of a
corporate Holder; (E) a corporate Holder’s transfer of any or
all of its shares to any or all of its stockholders; (F) a transfer
by a Holder which is a limited or general partnership to any or all
of its partners or former partners in connection with a liquidation
or withdrawal event; (G) a transfer by a Holder to a limited
partnership (or other similar entity) in which at least 90% of the
general and limited partnership interests are held by, or in trust
for, the Holder’s immediate family; (H) a transfer by a
limited liability company to its members or former members in
accordance with their interest in the limited liability company;
(I) a transfer by a Holder to an affiliate; and (J) a transfer by a
Holder to a retirement plan (regardless of form) created by a
Holder for the primary benefit of, or in trust for, the Holder
and/or such Holder’s immediate family or a transfer from such
retirement plan to the designated beneficiary or beneficiaries
thereof; provided that in each of the cases provided above
the transferee has agreed in writing to
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be bound by the terms of this Agreement by
executing a Counterpart Signature Page (which shall not be deemed
to be an amendment hereto), and such transfer is in compliance with
all applicable federal and state securities laws.
(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):
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 UNLESS AND
UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED
AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY
AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
(c) The Company shall be obligated
to reissue promptly unlegended certificates at the request of any
holder thereof if the holder shall have obtained an opinion of
counsel (which counsel may be counsel to the Company) reasonably
acceptable to the Company to the effect that the securities
proposed to be unlegended 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 receives a request from the
Holders of at least 50% of the Registrable Securities then
outstanding (the “Initiating Holders”) that the Company
file a Registration Statement under the Securities Act then the
Company shall, within 15 days of the receipt thereof, give notice
of such request to all Holders. The Holders shall have the right,
by giving written notice to the Company within 15 days after the
Company provides its notice, to elect to have included in such
registration such of their Registrable Shares as such Holders may
request in such notice of election, and the Company shall use its
best efforts to effect, as soon as practicable, the registration of
all Registrable Securities that the Holders request to be
registered in such notice of election (and shall promptly notify in
writing the Holders registering Registrable Securities registered
under any such Registration Statement once any such Registration
Statement has been declared effective).
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(b) If the Initiating Holders intend
to distribute the Registrable Securities by means of an
underwriting, they shall so advise the Company as a part of their
demand pursuant to this Section 2.2 or Section 2.4 and the Company
shall include such information in the notice 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 participation in such
underwriting. The underwriter or underwriters for such offering
shall be selected by a majority in interest of the Holders
participating in such offering, subject to the approval of the
Board of Directors of the Company (the “Board”), which
approval shall not be unreasonably withheld. Notwithstanding any
other provision of this Section 2.2 or Section 2.4, if the
underwriter advises the Company that marketing factors require a
limitation of the number of securities to be underwritten
(including Registrable Securities) then the Company shall so advise
all participating Holders, and the number of shares that may be
included in the underwriting and registration shall be allocated
pro rata to the participating Holders based on the number of
Registrable Securities held; 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 proposed to be included in such
underwriting and registration by holders of the Company’s
securities are first entirely excluded from the underwriting and
registration. If all of the Registrable Securities so requested for
registration by the Holders requesting registration are excluded
from an offering under Section 2.2(a) by the underwriter or
underwriters for such offering (a “Reload Event”), then
such Holders shall have the right to one additional Demand
Registration under Section 2.2(a) upon the occurrence of each
Reload Event.
(c) The Company shall not be
required to effect any such registration pursuant to this Section
2.2:
(i) prior to the earlier of (A) the
second anniversary of the date of this Agreement or (B) six months
following the effective date of the registration statement
pertaining to an Initial Public Offering;
(ii) the aggregate offering price of
the proposed underwriting and registration is less than $5.0
million;
(iii) after the Company has effected
two registrations pursuant to this Section 2.2, and such
registrations have been declared or ordered effective, and the
securities offered pursuant to such registrations have been
sold;
(iv) during the period starting with
the date of filing of, and ending on the date six months following
the effective date of a registration statement pertaining to the
Initial Public Offering or to any other underwritten public
offering made pursuant to this Section 2.2 or Section 2.4 or in
which the Holders were given the opportunity to participate
pursuant to Section 2.3 and no more than 25% of the Registrable
Securities so requested to be registered by the Holders were
excluded from any such registration; provided that the
Company makes reasonable and diligent good faith efforts to cause
such registration statement to become effective;
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(v) if within 15 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 its Initial Public Offering
within 120 days;
(vi) if the Company shall furnish to
the Initiating Holders a certificate signed by the Chairman of the
Board stating that in the good faith judgment of the Board, it
would be seriously detrimental to the Company and its stockholders
for such registration statement to be effected at such time, in
which event the Company shall have the right to defer such filing
for a period of not more than 120 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
(vii) 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.
(d) If any Holder of Registrable
Securities disapproves of the terms of the underwriting, such
person may elect to withdraw therefrom by written notice to the
Company, the underwriter and the Initiating Holders delivered at
least 15 days prior to the effective date of the Registration
Statement; provided , however , that if the number of
Registrable Securities withdrawn in accordance herewith would
result in the registration of less than 20% of the Registrable
Securities then outstanding (or a lesser percent if the anticipated
aggregate offering price would exceed $5,000,000), then the Company
shall not be required to effect a registration pursuant to this
Section 2.2, and the Company shall not be required to pay the
Registration Expenses incurred to date. The securities so withdrawn
shall also be withdrawn from the Registration Statement.
2.3 Piggyback
Registrations . Following
the Company’s Initial Public Offering, the Company shall
notify all Holders at least 30 days prior to the filing of any
registration statement under the Securities Act for a public
offering of securities of the Company (including registration
statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to employee
benefit plans or corporate reorganizations or other transactions
under Rule 145 of the Securities Act) and will afford each such
Holder an opportunity to include in such registration statement all
or part of the Registrable Securities held by such Holder. Each
Holder desiring to include Registrable Securities in any such
registration statement shall notify the Company within 15 days
after the notice from the Company. Such notice shall state the
intended method of disposition of the Registrable Securities by
such Holder. If a Holder decides not to include all of its
Registrable Securities in any registration statement 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, all upon the terms and conditions set forth
herein.
(a) Underwriting . 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. In such event, the right of any Holder to be
included in a registration pursuant to this Section 2.3 shall be
conditioned upon the Holder’s participation in the
underwriting. Notwithstanding any other provision of the Agreement,
if the underwriter determines in good
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faith that marketing factors require a
limitation of the number of shares to be underwritten, the number
of shares that may be included in the underwriting shall be
allocated, first, to the Company; second, to the Holders pro rata
based on the total number of Registrable Securities held by the
Holders; and third, to any stockholder of the Company (other than a
Holder) on a pro rata basis. Notwithstanding the foregoing, no such
reduction shall reduce the amount of securities of the selling
Holders included in the registration below 25% of the total amount
of securities included in such registration, unless such offering
is the Initial Public Offering.
(b) Right to Terminate
Registration . The Company shall give written notice of its
determination to terminate or withdraw any registration initiated
by it under this Section 2.3 promptly after the occurrence thereof.
The Registration Expenses of such withdrawn registration shall be
borne by the Company in accordance with Section 2.5.
(c) If any Holder disapproves of the
terms of any such underwriting, such person may elect to withdraw
therefrom by written notice to the Company and the underwriter
delivered at least fifteen days prior to the effective date of the
Registration Statement. Any Registrable Securities or other
securities excluded or withdrawn from such underwriting shall be
withdrawn from such Registration.
2.4 Form S-3
Registration .
(a) If the Company shall receive
from any Holder or Holders a request that the Company effect a
registration on Form S-3 (or any successor to 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:
(i) promptly give notice of the
proposed registration, and any related qualification or compliance,
to all other Holders of Registrable Securities; and
(ii) as soon as practicable, effect
such registration and all such qualifications and compliances as
would permit or facilitate the sale and distribution of the
Registrable Securities specified in such request, together with the
Registrable Securities of any other Holder or Holders joining in
such request by notice to the Company given within 15 days after
receipt of such 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:
(1) if Form S-3 (or any successor or
similar form) is not available for such offering by the Holders,
or
(2) 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 $1,000,000, or
(3) if the Company shall furnish to
the Holders a certificate signed by the Chairman of the Board
stating that in the good faith judgment of the Board of Directors,
it would be seriously detrimental to the Company and its
stockholders for such Form S-3 registration to be effected at such
time, in which event the Company shall have the right to
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defer the filing of the Form S-3 registration
statement for a period of not more than 120 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
(4) if the Company has, within the
12-month period preceding the date of such request, already
effected a registration on Form S-3 for the Holders pursuant to
this Section 2.4, or
(5) in any particular jurisdiction
in which the Company would be required to qualify to do business or
to execute a general consent to service of process in effecting
such registration, qualification or compliance.
(b) 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 Sections 2.2 or 2.3,
respectively. If the Initiating Holders intend to distribute
Registrable Shares pursuant to an underwriting, they shall so
advise the Company in the demand pursuant to Section
2.2(a).
(c) After the Company’s
Initial Public Offering, the Company will use its commercially
reasonable efforts to qualify for the registration of its shares of
Common Stock on Form S-3.
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 or any registration under 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 Company or the stockholders selling the
securities on a pro-rata basis, as the case may be. The Company
shall not, however, be required to pay for expenses of any
registration proceeding begun pursuant to Section 2.2, the request
of which has been subsequently withdrawn by the Initiating Holders
unless the withdrawal is based upon material adverse information
concerning the Company (including a material drop in the market
price of the Company’s common stock) of which the Initiating
Holders were not aware at the time of such request. 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.
Notwithstanding the foregoing, the Holders shall be solely
responsible for the fees and expenses of any counsel retained by
such Holders on a pro-rata basis in connection with such withdrawn
registration (other than a withdrawal which is based upon material
adverse information concerning the Company, including a material
drop in the market price of the Company’s common stock, of
which the Initiating Holders were not aware at the time of such
request) and any transfer taxes or Selling Expenses incurred by the
Holders in connection therewith.
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2.6 Obligations of the
Company . Whenever
required to register any Registrable Securities, the Company shall,
as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a
registration statement with respect to such Registrable Securities
for an offering to be made on a continuous basis pursuant to Rule
415 promulgated under the Securities Act for a registration
pursuant to Section 2.4, and use all reasonable efforts to cause
such registration statement to become effective, and, upon the
request of the Holders of a majority of the Registrable Securities
registered thereunder, keep such registration statement effective
for up to six months for a registration pursuant to Section 2.2 and
for up to twenty-four months for a registration pursuant to Section
2.4 or, if earlier, until the Holder or Holders have completed the
distribution related thereto; provided , however ,
that (x) before filing a registration statement or prospectus or
any amendments or supplements thereto, the Company shall provide
counsel selected by the Holders holding a majority of the
Registrable Securities being registered in such registration
(“Holders’ Counsel”) with an adequate and
appropriate opportunity to review and comment on such Registration
Statement and each prospectus included therein (and each amendment
or supplement thereto) to be filed with the SEC, subject to such
documents being under the Company’s control, and (y) the
Company shall notify the Holders’ Counsel and each seller of
Registrable Securities of any stop order issued or threatened by
the SEC and take all action required to prevent the entry of such
stop order or to remove it if entered or of the receipt of any SEC
comment letter (a copy of which shall be provided to Holders’
Counsel).
(b) 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 with respect to the disposition of all securities covered by
such registration statement for the period set forth in paragraph
(a) above.
(c) 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.
(d) Use its reasonable 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.
(e) 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.
(f) Notify in writing each Holder of
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.
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(g) Use its reasonable best efforts
to furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are
being sold through underwriters, (i) an opinion, dated as of such
date, of the counsel representing the Company for the purposes of
such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the
underwriters, if any, and (ii) a letter dated as of such date, from
the independent certified public accountants of the Company, in
form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public
offering addressed to the underwriters.
(h) Keep Holders’ Counsel
advised in writing as to the initiation and progress of any
registration under Sections 2.2, 2.3 and 2.4 hereunder.
(i) Take all other steps reasonably
necessary to effect the registration of the Registrable Securities
contemplated hereby.
2.7 Furnishing
Information . It shall be
a condition precedent to the obligations of the Company to take any
action pursuant to Section 2.2, 2.3 or 2.4 that the selling Holders
shall furnish to the Company such information regarding themselves,
the Registrable Securities held by them and the intended method of
disposition of such securities and such other information as shall
be required to effect the registration of their Registrable
Securities as the Company may reasonably request in
writing.
2.8 Indemnification
. In the event any Registrable
Securities are included in a registration statement under Sections
2.2, 2.3 or 2.4:
(a) To the extent permitted by law,
the Company will indemnify and hold harmless each Holder and the
partners, officers, directors, stockholders and Affiliates (as
defined below) of each Holder, any underwriter (as defined in the
Securities Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the
Securities Act or the Exchange Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become
subject under the Securities Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a “Violation”) by the Company: (i) any
untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments
or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii)
any violation or alleged violation by the Company of the Securities
Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act
or any state securities law in connection with the offering covered
by such registration statement; and the Company will pay as
incurred to each such Holder, partner, officer, director,
stockholder, underwriter, Affiliate or controlling person for any
legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage,
liability or action (subject to recoupment if this indemnification
is determined to be inapplicable); provided , however
, that the indemnity agreement contained in this Section 2.8(a)
shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement
11
is effected without the consent of the Company,
which consent shall not be unreasonably withheld, nor shall the
Company be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or
is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in
connection with such registration by such Holder, partner, officer,
director, stockholder, underwriter, Affiliate or controlling person
of such Holder. The term “Affiliate” for purposes of
this Section 2.8 shall mean, with respect to any person, any other
person that, directly or indirectly, controls, is controlled by, or
is under common control with, such person.
(b) To the extent permitted by law,
each Holder, will severally and not jointly, if Registrable
Securities held by such Holder are included in the securities as to
which such registration, qualification or compliance is being
effected, indemnify and hold harmless the Company, each of its
directors, its officers and each person, if any, who controls the
Company within the meaning of the Securities Act,
