GLU MOBILE INC.
(formerly Sorrent, Inc.)
AMENDED AND RESTATED
INVESTORS’ RIGHTS AGREEMENT
(formerly Sorrent,
Inc.)
AMENDED AND RESTATED
INVESTORS’ RIGHTS AGREEMENT
THIS AMENDED
AND RESTATED INVESTORS’ RIGHTS AGREEMENT (this “
Agreement ”) is made effective as of
March 29, 2006 by and among Glu Mobile Inc., a California
corporation formerly known as Sorrent, Inc. (the “
Company ”), the investors identified on the
Schedule of Investors attached hereto as Exhibit A (the
“ Investors ”) and the shareholders
identified on the Schedule of iFone Shareholders attached hereto as
Exhibit B (the “ iFone Shareholders
”).
WHEREAS ,
the Investors possess registration rights, information rights,
rights of first offer, and other rights pursuant to the Amended and
Restated Investors’ Rights Agreement dated as of July 26,
2005, by and among the Company and the Investors (the “
Original Agreement ”) as an investor or a
transferee of an investor under the Original Agreement.
WHEREAS ,
the Original Agreement may be amended, and any provision therein
waived, with the consent of the Company and the holders of a
majority of the Registrable Securities then outstanding (as such
term is defined in the Original Agreement).
WHEREAS ,
the undersigned Investors, as holders of greater than a majority of
the Registrable Securities then outstanding (as such term is
defined in the Original Agreement) of the Company, desire to
terminate the Original Agreement and to accept the rights created
pursuant hereto in lieu of the rights granted to them under the
Original Agreement.
WHEREAS ,
the Company and the iFone Shareholders are parties to the Exchange
Agreement dated as of March 29, 2006 (the “
Exchange Agreement ”), whereby the Company will
issue shares of the Company’s Special Junior Preferred Stock
to the iFone Shareholders in exchange for all of the issued and
outstanding share capital of iFone Holdings Limited (the “
Exchange ”).
WHEREAS ,
the obligations of the Company and the iFone Shareholders under the
Exchange Agreement are conditioned, among other things, upon the
execution and delivery of this Agreement by the Company, the
undersigned Investors and the iFone Shareholders.
WHEREAS ,
the parties intend that this Agreement shall take effect only upon
the occurrence of the consummation of the Exchange and that this
Agreement shall be deemed null and void ab initio in the
event that the Exchange Agreement is terminated for any
reason.
NOW,
THEREFORE, in consideration of the mutual promises and
covenants contained herein, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree
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that,
contingent and effective upon the Closing (as defined in the
Exchange Agreement), the Original Agreement shall be amended and
restated in its entirety as follows:
1. Certain Definitions. As used in this Agreement, the
following terms shall have the following respective
meanings:
“
Commission ” means the United States Securities
and Exchange Commission or any other federal agency at the time
administering the Securities Act.
“
Common Stock ” means the Company’s Common
Stock, no par value.
“
Consulting Agreement ” means the Consulting
Agreement dated as of March 29, 2006 by and between the
Company and LOLA, a Societe Anonyme Monegasque.
“
Conversion Stock ” means the Senior Conversion
Stock and the Special Junior Conversion Stock.
“
Exchange Related Shares ” means the Special
Junior Conversion Stock and any Common Stock of the Company
issuable or issued with respect to the Exchange Shares or the
Special Junior Conversion Stock upon any stock split, stock
dividend, or similar event.
“
Exchange Shares ” means the shares of Special
Junior Preferred Stock issued pursuant to the Exchange Agreement
(including pursuant to the Earn Out Schedule attached as
Appendix A to the Exchange Agreement) and the shares of
Special Junior Preferred Stock issued pursuant to the Consulting
Agreement and any shares issued in connection with a transfer of
such shares pursuant to the terms of this Agreement, the Exchange
Agreement and the Consulting Agreement.
“
Exchange Act ” means the Securities Exchange
Act of 1934, as amended, or any similar federal rule or statute and
the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
“
Holders ” means (i) each Investor and
iFone Shareholder holding Registrable Securities, and
(ii) each person holding Registrable Securities to whom the
rights under this Agreement have been transferred in accordance
with Section 11 hereof.
“
Initiating Holders ” means any Holder or
Holders, other than a Holder or Holders of Exchange Related Shares,
who, in the aggregate, hold not less than thirty percent (30%) of
the Registrable Securities (excluding any Exchange Related Shares),
then outstanding, with respect to a request for registration made
pursuant to Section 5.1.
“
Major Holder ” means any Holder who holds at
least five hundred thousand (500,000) shares of Registrable
Securities (as adjusted for stock splits, stock dividends and the
like, but excluding any Mandatory Conversion Shares and any
Exchange Related Shares).
“
Preferred Stock ” shall mean the
Company’s (i) Series A Preferred Stock,
(ii) Series B Preferred Stock, (iii) Series C
Preferred Stock, (iv) Series D Preferred Stock,
(v) Series D-1 Preferred Stock and (vi) Special
Junior Preferred Stock.
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“
Registrable Securities ” means (1) the
Senior Conversion Stock and any Common Stock of the Company
issuable or issued with respect to the Senior Preferred Stock or
Senior Conversion Stock upon any stock split, stock dividend, or
similar event, (2) the Common Stock of the Company issued
pursuant to the Restricted Stock Purchase Agreement (the “
RSPA ”) dated as of April 25, 2005 between
the Company and the Investor defined as the Purchaser therein or
(3) the Exchange Related Shares provided, however, that
the Exchange Related Shares shall not be deemed Registrable
Securities and the Holders of Exchange Related Shares shall not be
deemed Initiating Holders or Major Holders for the purposes of
Sections 5.1, 6 and 8 and provided further however ,
that the term “ Registrable Securities ”
shall exclude in all cases any shares of Common Stock issued upon
conversion of Preferred Stock pursuant to Article III,
Section B.3(e) of the Company’s Amended and Restated
Articles of Incorporation (or any successor thereto) (the “
Restated Articles ”) (which Paragraph is
entitled “ Special Mandatory Conversion
”), as such provision may be amended from time to time
(“ Special Mandatory Conversion Shares
”). In addition, securities shall only be treated as
Registrable Securities if and so long as (i) they have not
been registered or sold to or through a broker, dealer, market
maker or underwriter in a public distribution or a public
securities transaction and (ii) the registration rights with
respect to such securities have not terminated pursuant to
Section 5.10 below.
The
terms “ 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 the
effectiveness of such registration statement.
“
Registration Expenses ” shall mean all
expenses, except Selling Expenses, incurred by the Company in
complying with Sections 5.1, 5.2 and 5.3 below, including
without limitation, (i) all registration, qualification and
filing fees, (ii) printing expenses and escrow fees,
(iii) fees and disbursements of counsel for the Company,
(iv) fees and disbursements up to twenty thousand dollars
($20,000) for one counsel for the Holders, (v) “blue
sky” fees and expenses, (vi) the expense of any special
audits incidental to or required by any such registration, and
(vii) the compensation of regular employees of the Company
which shall be paid in any event by the Company.
“
Restricted Securities ” shall mean the
securities of the Company required to bear the legends set forth in
Section 3 below.
“
Rule 144 ” and “
Rule 145 ” shall mean Rules 144 and
145, respectively, promulgated under the Securities Act, or any
similar federal rules thereunder, all as the same shall be in
effect at the time.
“
Securities Act ” shall mean the Securities Act
of 1933, as amended, or any similar federal rule or statute and the
rules and regulations of the Commission thereunder, all as the same
shall be in effect at the time.
“
Selling Expenses ” shall mean all underwriting
discounts, selling commissions and stock transfer taxes applicable
to the securities registered by the Holders.
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“
Senior Conversion Stock ” means the Common
Stock issuable or issued pursuant to conversion of the Senior
Preferred Stock.
“
Senior Preferred Stock ” shall mean the
Company’s (i) Series A Preferred Stock,
(ii) Series B Preferred Stock, (iii) Series C
Preferred Stock, (iv) Series D Preferred Stock and
(v) Series D-1 Preferred Stock.
“
Special Junior Conversion Stock ” means the
Common Stock issuable or issued pursuant to conversion of the
Special Junior Preferred Stock.
2. Restrictions on Transferability. The Restricted
Securities shall not be sold, assigned, transferred or pledged
except pursuant to the provisions of Section 4 below. Each
Holder will cause any proposed purchaser, assignee, transferee or
pledgee of any such shares held by such Holder to agree to take and
hold such securities subject to the provisions and upon the
conditions specified in this Agreement.
3. Restrictive Legends. Each certificate representing the
Senior Preferred Stock, the Senior Conversion Stock or any other
securities issued in respect of such stock upon any stock split,
stock dividend, recapitalization, merger, or similar event shall
(unless otherwise permitted by the provisions of Section 4
below) be stamped or otherwise imprinted with legends in
substantially the following form (in addition to any legends
required by agreement or by applicable state securities
laws):
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “
ACT ”). SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF SUCH A REGISTRATION UNLESS THE COMPANY RECEIVES
AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH
SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE ACT.
Each certificate
representing the Preferred Stock, the Conversion Stock or any other
securities issued in respect of such stock upon any stock split,
stock dividend, recapitalization, merger, or similar event shall
(unless otherwise permitted by the provisions of Section 4
below) be stamped or otherwise imprinted with legends in
substantially the following forms (in addition to any legends
required by agreement or by applicable state securities
laws):
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER
RESTRICTIONS INCLUDING A LOCKUP PERIOD OF UP TO 180 DAYS FOLLOWING
THE EFFECTIVE DATE OF A REGISTRATION STATEMENT OF THE COMPANY FILED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AS SET FORTH IN AN
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.
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THE SALE,
PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A
CERTAIN INVESTOR RIGHTS AGREEMENT BY AND BETWEEN THE SHAREHOLDER
AND THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON
WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.
Each Holder
consents to the Company making a notation on its records and giving
stop transfer instructions to any transfer agent of its capital
stock in order to implement the restrictions on transfer
established in this Agreement.
4. Notice
of Proposed Transfers. The Holder of each certificate
representing Restricted Securities by acceptance thereof agrees to
comply in all respects with the provisions of this Section 4.
Without in any way limiting the immediately preceding sentence, no
sale, assignment, transfer or pledge of Restricted Securities shall
be made by any Holder thereof to any person unless such person
shall first agree in writing to be bound by the restrictions of
this Agreement. Prior to any proposed sale, assignment, transfer or
pledge of any Restricted Securities, unless there is in effect a
registration statement under the Securities Act covering the
proposed transfer, the Holder thereof shall give written notice to
the Company of such Holder’s intention to effect such
transfer, sale, assignment or pledge. Each such notice shall
describe the manner and circumstances of the proposed transfer,
sale, assignment or pledge in sufficient detail, and, if reasonably
requested by the Company, the Holder shall also provide, at such
Holder’s expense, either:
(a) a
written opinion of legal counsel reasonably satisfactory to the
Company addressed to the Company, to the effect that the proposed
transfer of the Restricted Securities may be effected without
registration under the Securities Act, or
(b) a
“no action” letter from the Commission to the effect
that the transfer of such securities without registration will not
result in a recommendation by the staff of the Commission that
action be taken with respect thereto, whereupon the Holder of such
Restricted Securities shall be entitled to transfer such Restricted
Securities in accordance with the terms of the notice delivered by
the Holder to the Company; provided, however, that the
Company shall not request an opinion of counsel or “no
action” letter with respect to:
(i) a
transfer not involving a change in beneficial ownership;
(ii) a
transfer to an affiliate of such Holder (including in the case of a
venture capital fund, other venture capital funds affiliated with
such fund);
(iii) a
transaction involving the distribution without consideration of
Restricted Securities by the Holder to its constituent partners or
members or a retired partner, or to the estate of any such partners
or retired partners; or
(iv) a
transaction involving the transfer without consideration of
Restricted Securities by an individual Holder during such
Holder’s lifetime by way of gift or on death by will or
intestacy.
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Each certificate
evidencing Restricted Securities transferred as provided above
shall bear, except if such transfer is made pursuant to
Rule 144, the appropriate restrictive legend set forth in
Section 3 above, except that such certificate shall not bear
such restrictive legend if in the opinion of counsel for such
Holder and counsel for the Company such legend is not required in
order to establish compliance with any provision of the Securities
Act. Notwithstanding the foregoing, each holder of Restricted
Securities agrees that it will not request that a transfer of the
Restricted Securities be made or that the legend set forth in
Section 3 above be removed from the certificate representing
the Restricted Securities solely in reliance on Rule 144(k),
if as a result thereof the Company would be rendered subject to the
reporting requirements of the Exchange Act.
5.1 Requested Registration.
(a)
Request for Registration. In case the Company shall
receive a written request from Initiating Holders that the Company
file a registration statement under the Securities Act with respect
to the Registrable Securities, the Company will:
(i) promptly
give written notice of the proposed registration to all other
Holders; and
(ii) as
soon as practicable, use its best efforts to effect such
registration as part of a firm commitment underwritten public
offering with underwriters reasonably acceptable to the Company
(including, without limitation, appropriate qualification under
applicable state securities laws and appropriate compliance with
applicable regulations issued under the Securities Act and any
other governmental requirements or regulations) as may be so
requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities
as are specified in such request, together with all or such portion
of the Registrable Securities of any Holder or Holders that deliver
a written notice to such effect to the Company within fifteen (15)
business days after the date of such written notice from the
Company.
(b)
Exceptions to Obligation to Register. Notwithstanding
the foregoing, the Company shall not be obligated to take any
action to effect or complete any such registration pursuant to this
Section 5.1:
(i) In
any particular jurisdiction in which the Company would be required
to execute a general consent to service of process in effecting
such registration, qualification or compliance, unless the Company
is already subject to service of process in such jurisdiction and
except as may be required by the Securities Act;
(ii) Prior
to the earlier of (i) six (6) months after the effective
date of the Company’s first registered public offering of its
Common Stock, or (ii) June 7, 2007;
(iii) If
such registration, qualification or compliance is not proposed to
be part of a firm commitment underwritten public offering with
nationally recognized underwriters reasonably acceptable to the
Company;
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(iv) If,
after the Company gives the notice specified, the Holders propose
to sell a number of shares of Registrable Securities and the
reasonably anticipated aggregate offering proceeds, net of Selling
Expenses, are less than Seven Million Five Hundred Dollars
($7,500,000);
(v) If
the resale of the Company’s securities to be covered by the
required registration statement could be registered on Form
S-3;
(vi) During
the period starting with the date sixty (60) days prior to the
Company’s estimated date of filing of, and ending on the date
one hundred eighty (180) days immediately following the
effective date of, any registration statement pertaining to
securities of the Company (other than a registration of securities
in a Rule 145 transaction or with respect to an employee
benefit plan), provided that the Company is actively employing in
good faith commercially reasonable efforts to cause such
registration statement to become effective;
(vii) After
the Company has effected two (2) registrations pursuant to
Section 5.1(a) above; provided that a registration that is
closed or withdrawn at the request of the Holders (other than a
request for registration that is withdrawn due to a material
adverse change to the Company) will count as a registration
pursuant to this subparagraph 5.1(b)(vii);
(viii) If
the Company shall furnish to the Initiating Holders a certificate
signed by the President of the Company stating that in the good
faith judgment of the Company’s Board of Directors it would
be seriously detrimental to the Company or its shareholders for a
registration statement to be filed in the near future; in which
case the Company’s obligation to use its best efforts to
register, qualify or comply under this Section 5.1 shall be
deferred for a period not to exceed one hundred twenty
(120) days from the date of receipt of the written request
from the Initiating Holders, provided that the Company may not
exercise this deferral right more than once per twelve
(12) month period; or
(ix) If
the Company gives notice to the Initiating Holders, within thirty
(30) days after receipt of the Initiating Holders’
notice of request for registration, of its intent to file a
registration statement covering the initial public offering of the
Company’s securities within ninety (90) days.
(x) Subject
to the foregoing clauses, the Company shall file a registration
statement covering the Registrable Securities so requested to be
registered as soon as practicable after receipt of the request or
requests of the Initiating Holders.
(c)
Underwriting. In the event of a registration pursuant
to this Section 5.1, the Company shall advise the Holders as
part of the notice given pursuant to Section 5.1(a)(i) above
that the right of any Holder to registration pursuant to this
Section 5.1 shall be conditioned upon such Holder’s
participation in the underwriting arrangements required by this
Section 5.1, and the inclusion of such Holder’s
Registrable Securities in the underwriting, to the extent requested
shall be limited to the extent provided herein.
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(d)
Underwriting Agreement; Limitation of Underwritten
Shares. The Company shall enter, together with all Holders
proposing to distribute their securities through such underwriting,
into an underwriting agreement in customary form with the managing
underwriter selected for such underwriting. Notwithstanding any
other provision of this Section 5.1, if the managing
underwriter advises the Initiating Holders and the Company in
writing that marketing factors require a limitation of the number
of shares to be underwritten, then the Company shall so advise all
Holders requesting to be included in the registration and
underwriting and the number of shares of Registrable Securities
that may be included in the registration and underwriting shall be
allocated among all Holders requesting to be included in the
registration and underwriting in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities
held by them at the time of filing the registration statement;
provided however that no shares of Registrable Securities, other
than Exchange Related Shares, shall be excluded from such offering
unless all Exchange Related Shares have been first excluded and no
Exchange Related Shares shall be excluded from such offering unless
all other securities of the Company, other than Registrable
Securities, are reduced in their entirety. No Registrable
Securities excluded from the underwriting by reason of the
underwriter’s marketing limitation shall be included in such
registration. To facilitate the allocation of shares in accordance
with the above provisions, the Company or the underwriters may
round the number of shares allocated to any Holder to the nearest
one hundred (100) shares. 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.
5.2 Company Registration.
(a)
Notice of Registration. If at any time or from time
to time the Company shall determine to register any of its equity
securities, either for its own account or the account of a Holder
or other holders, other than (i) a registration relating
solely to employee benefit plans, (ii) a registration relating
solely to a Rule 145 transaction or (iii) a registration
in which the only equity security being registered is Common Stock
issuable upon conversion of convertible debt securities which are
also being registered, the Company will:
(i) promptly
give to each Holder written notice thereof; and
(ii) include
in such registration (and any related qualifications including
compliance with “blue sky” laws), and in any
underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made within fifteen
(15) business days after the date of such written notice from
the Company, by any Holder.
(b)
Underwriting. If the registration of which the
Company gives notice is for a registered public offering involving
an underwriting, the Company shall so advise the Holders as part of
the written notice given pursuant to Section 5.2(a)(i) above.
In such event, the right of any Holder to registration pursuant to
this Section 5.2 shall be conditioned upon such Holder’s
participation in such underwriting, and the inclusion of
Registrable Securities in the underwriting shall be limited to the
extent provided herein.
(c)
Underwriting Agreement; Limitation of Underwritten
Securities. All Holders proposing to distribute their
securities through such underwriting shall (together
with
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the Company and
all the other Holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting
by the Company. Notwithstanding any other provision of this
Section 5.2, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to
be underwritten, the managing underwriter may limit the Registrable
Securities to be included in such registration (i) in the case
of the Company’s initial public offering, to zero (0), and
(ii) in the case of any other offering, to an amount no less than
twenty-five percent (25%) of all shares to be included in such
offering. No shares of Registrable Securities, other than Exchange
Related Shares, shall be excluded from such offering unless all
Exchange Related Shares have been first excluded and no Exchange
Related Shares shall be excluded from such offering unless all
other securities of the Company, other than Registrable Securities,
are excluded in their entirety. The Company shall so advise all
Holders requesting to be included in the registration and
underwriting that the number of shares of Registrable Securities
that may be included in the registration and underwriting shall be
allocated among all the Holders requesting to be included in the
registration and underwriting in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities
held by them at the time of filing the registration statement. To
facilitate the allocation of shares in accordance with the above
provisions, the Company or the underwriters may round the number of
shares allocated to any Holder to the nearest one hundred
(100) shares. If any Holder disapproves of the terms of any
such underwriting, such person may elect to withdraw therefrom by
written notice to the Company.
(d)
Right to Terminate Registration. The Company shall
have the right to terminate or withdraw any registration initiated
by it under this Section 5.2 prior to the effectiveness of
such registration whether or not any Holder has elected to include
securities in such registration, and shall promptly notify any
Holder that has elected to include shares in such registration of
such termination or withdrawal. The Registration Expenses of such
withdrawn registration shall be borne by the Company in accordance
with Section 5.5 hereof.
5.3 Registration on Form S-3.
(a)
Request for Registration. In the event the Company
receives a written request from Holders, who, in the aggregate,
hold not less than ten percent (10%) of the Registrable Securities
then outstanding, that the Company file a registration statement on
Form S-3 (or any successor form to Form S-3) for a public offering
of shares of Registrable Securities the aggregate price to the
public of which would exceed one million dollars ($1,000,000) net
of Selling Expenses, and the Company is a registrant entitled to
use Form S-3 to register the Registrable Securities for such an
offering, the Company shall use commercially reasonable efforts to
cause such Registrable Securities to be registered for the offering
on such form and to cause such Registrable Securities to be
qualified in such jurisdictions as such Holder or Holders may
reasonably request. The Company shall inform the other Holders of
the proposed registration and offer them the opportunity to
participate. In the event the registration is proposed to be part
of a firm commitment underwritten public offering, the substantive
provisions of Section 5.1(d) above shall be applicable to each
such registration initiated under this Section 5.3.
(b)
Exceptions to Obligation to Register. Notwithstanding
the foregoing, the Company shall not be obligated to take any
action pursuant to this Section 5.3:
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(i) If,
within thirty (30) days of receipt of a written request from
any Holder or Holders pursuant to this Section 5.3, the
Company gives notice to such Holder or Holders of the
Company’s intention to make a public offering (other than a
registration of securities in a Rule 145 transaction or with
respect to an employee benefit plan) within ninety (90) days,
provided that such Holders are permitted to register such shares as
requested to be registered pursuant to Section 5.3 hereof
without reduction by the underwriter thereof and provided that the
Company is actively employing in good faith commercially reasonable
efforts to cause such registration statement to become
effective;
(ii) If,
during the previous twelve (12) months, the Company has
effected three (3) registrations pursuant to this Section 5.3;
or
(iii) If
the Company shall furnish to the Holders requesting the S-3
registration a certificate signed by the President of the Company
stating that, in the good faith judgment of the Board of Directors,
it would be seriously detrimental to the Company or its
shareholders for a registration statement to be filed in the near
future, in which case the Company’s obligation to use its
commercially reasonable efforts to file a registration statement
shall be deferred for a period not to exceed one hundred twenty
(120) days from the receipt of the request to file such
registration by such Holders, provided that the Company may not
exercise this deferral right more than once per twelve
(12) month period.
5.4 Subsequent Registration Rights. The Company shall not
enter into any agreement granting any holder or prospective holder
of any securities of the Company registration rights superior to or
on a pari passu basis with the rights granted to the Holders
hereunder without the written consent of the holders of a majority
of the Registrable Securities (excluding the Exchange Related
Shares).
5.5 Expenses of Registration. All Registration Expenses
incurred pursuant to Section 5.1, all registrations pursuant
to Section 5.2, and pursuant to Section 5.3 shall be
borne by the Company, except for the Registration Expenses incurred
pursuant to the third registration to be effected within a twelve
(12) month period pursuant to Section 5.3 as such
Registration Expenses shall be borne by the Holders requesting such
registration. In the event that Initiating Holders cause the
Company to begin a registration pursuant to Section 5.1 and
the request for such registration is subsequently withdrawn by the
Initiating Holders or is otherwise not successfully completed due
to no fault of the Company, all Holders shall not be deemed to have
forfeited their right to one registration under Section 5.1.
Unless otherwise agreed, all Selling Expenses relating to
securities registered on behalf of the Holders and all other
registration expenses shall be borne by the Holders of such
securities pro rata on the basis of the number of shares so
registered or proposed to be so registered.
5.6 Registration Procedures. The Company will keep each
Holder advised in writing as to the initiation of each registration
effected by the Company pursuant to this Agreement and as to the
completion thereof. The Company will:
(a) prepare
and file with the Commission a registration statement and such
amendments and supplements as may be necessary, and use
commercially reasonable efforts to cause such registration
statement to become and remain effective for at least
one
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hundred twenty
(120) days or until the distribution described in the
registration statement has been completed;
(b) furnish
to the Holders and to the underwriters of the securities being
registered such reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus and such other
documents as such underwriters and Holders may reasonably request
in order to facilitate the public offering of such
securities;
(c) use
its reasonable 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;
(d) 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;
(e) notify
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. 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; and
(f) use
its reasonable 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.
(a) The
Company will indemnify each Holder, each of its officers,
directors, shareholders and partners, any underwriters (as defined
in the Act) for such Holder and each person controlling such Holder
within the meaning of Section 15 of the Securities Act, with
respect to which registration has been effected pursuant to this
Agreement, against all expenses, claims, losses, damages or
liabilities (or actions in respect thereof), including any of the
foregoing incurred in settlement of any litigation, commenced or
threatened, arising out of or
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based on any
untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering
circular or other document, or any amendment or supplement thereto,
incident to any such registration, or based on any omission (or
alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading,
or any violation by the Company of the Securities Act, the Exchange
Act, state securities laws or any rule or regulation promulgated
under such laws applicable to the Company in connection with any
such registration, and the Company will reimburse each such Holder,
each of its officers, directors, partners and shareholders and
underwriter and each person controlling such Holder or underwriter,
for any legal and any other expenses reasonably incurred, as such
expenses are incurred, in connection with investigating, preparing
or defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to
the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or
alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by an
instrument duly executed by such Holder or controlling person, and
stated to be specifically for use therein; provided,
however, that the foregoing indemnity agreement is subject to
the condition that, insofar as it relates to any such untrue
statement, alleged untrue statement, omission or alleged omission
made in a preliminary prospectus on file with the Commission at the
time the registration statement becomes effective or the amended
prospectus is filed with the Commission pursuant to Rule 424(b)
(the “ Final Prospectus ”), such
indemnity agreement shall not inure to the benefit of any Holder if
a copy of the Final Prospectus was not furnished to the person
asserting the loss, liability, claim or damage at or prior to the
time such action is required by the Securities Act, and if the
Final Prospectus would have cured the defect giving rise to the
loss, liability, claim or damage.
(b) Each
Holder will, if Registrab
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