Exhibit 10.34
HYDRO MED SCIENCES, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
May 30, 2003
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TABLE OF CONTENTS
PAGE
SECTION 1
GENERAL...................................................1
1.1
Definitions...............................................1
SECTION 2
RESTRICTIONS ON TRANSFER; REGISTRATION....................3
2.1
Restrictions on Transfer..................................3
2.2 Demand
Registration.......................................5
2.3 Piggyback
Registrations...................................6
2.4 Form S-2
and S-3 Registration.............................7
2.5 Expenses
of Registration..................................9
2.6
Obligations of the Company................................9
2.7
Termination of Registration Rights.......................11
2.8 Delay of
Registration; Furnishing Information............11
2.9
Indemnification..........................................11
2.10
Assignment of Registration Rights........................13
2.11
Amendment of Registration Rights.........................14
2.12
Limitation on Subsequent Registration Rights.............14
2.13
"Market Stand-Off" Agreement.............................14
2.14
Agreement to Furnish Information.........................14
2.15
Rule 144 Reporting.......................................14
SECTION 3
COVENANTS................................................15
3.1 Basic
Financial Information and Reporting................15
3.2 Inspection
Rights........................................15
3.3
Confidentiality of Records...............................16
3.4
Reservation of Common Stock..............................16
3.5 Stock
Vesting............................................16
3.6 Special
Relationships of Prospective Employees...........16
3.7 Directors'
Liability and Indemnification.................17
3.8
Reimbursement of Expenses................................17
3.9 Qualified
Small Business.................................17
3.10
Election of Directors....................................17
3.11
Observer Rights..........................................17
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3.12
Termination of Covenants.................................18
SECTION 4
PREEMPTIVE RIGHTS........................................18
4.1 Subsequent
Offerings.....................................18
4.2 Exercise
of Preemptive Rights............................18
4.3
Termination and Waiver of Preemptive Right...............19
4.4 Transfer
of Preemptive Rights............................19
4.5 Excluded
Securities......................................19
SECTION 5
MISCELLANEOUS............................................20
5.1 Governing
Law............................................20
5.2
Survival.................................................20
5.3 Successors and
Assigns...................................20
5.4 Entire
Agreement.........................................20
5.5
Severability.............................................20
5.6 Amendment
and Waiver.....................................20
5.7 Delays or
Omissions......................................21
5.8
Notices..................................................21
5.9 Attorneys'
Fees..........................................21
5.10
Titles and Subtitles.....................................21
5.11
Additional Investors.....................................21
5.12
Counterparts.............................................22
5.13
Joinder of Spouses.......................................22
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HYDRO MED SCIENCES, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this
"Agreement")
is entered into as of May 30, 2003, by and
among HYDRO MED SCIENCES, INC., a
Delaware corporation (the "Company"), the
stockholders of the Company listed as
"Common Stock Investors" on Exhibit A
hereto (collectively, the "Common Stock
Investors", and each individually, a
"Common Stock Investor"), the investors
listed as the "Series B Investors" on
Exhibit A hereto (the "Series B
Investors"), and the stockholders of the
Company listed as "Series A Investors"
on Exhibit A hereto (the "Series A
Investors" and, together with the Common
Stock Investors and the Series B Investors,
the "Investors").
RECITALS
The Series B Investors are purchasing shares of the Company's
Series B
Convertible Preferred Stock pursuant to
that certain Stock Purchase Agreement
(the "Purchase Agreement") of even date
herewith (the "Financing").
The obligations in the Purchase Agreement are conditioned upon
the
execution and delivery of this
Agreement.
In connection with the consummation of the Financing, the
parties
desire to enter into this Agreement in
order to grant registration, information
rights and other rights to the Investors as
set forth below.
AGREEMENT
In consideration of the premises and for other good and
valuable
consideration, the receipt and sufficiency
of which are hereby acknowledged,
intending to be legally bound hereby, the
parties agree hereto as follows:
1.
GENERAL.
1.1. Definitions. As used in this Agreement
the following terms shall have the
following respective meanings:
"Board of Directors" means the Company's Board of Directors.
"Certificate" means the Company's Restated Certificate of
Incorporation, as filed with the Delaware
Secretary of State on May 30, 2003.
"Common Stock" means the Company's common stock, par value
$.001 per share.
"Equity Securities" means (i) any Common Stock, Preferred
Stock, or other security of the Company,
(ii) any security convertible, with or
without consideration, into any Common
Stock, Preferred Stock, or other security
of the Company (including any option to
purchase such a convertible security),
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(iii) any security carrying any warrant or
right to subscribe to or purchase any
Common Stock, Preferred Stock, or other
security of the Company, or (iv) any
such warrant or right.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Form S-2" means such form under the Securities Act as in
effect on the date hereof or any successor
or similar registration form under
the Securities Act subsequently adopted by
the SEC that permits inclusion or
incorporation of certain information by
reference to other documents filed by
the Company with the SEC.
"Form S-3" means such form under the Securities Act as in
effect on the date hereof or any successor
or similar 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.
"GP Strategies" means GP Strategies Corporation, a Delaware
corporation.
"Holder" means any person owning of record Registrable
Securities, or securities convertible into
Registrable Securities that have not
been sold to the public or any assignee of
record of such Registrable Securities
or securities in accordance with Section
2.10 hereof.
"Preferred Stock" means the Company's preferred stock, par
value $.001 per share.
"Qualified Offering" a firm commitment underwritten public
offering of the Company's Common Stock,
pursuant to an effective registration
statement under the Securities Act (i) at a
public offering price per share,
before deductions for underwriter discounts
and commissions, of at least three
(3) times the higher of the then-applicable
conversion price of the Series B
Convertible Preferred Stock or Series A
Convertible Preferred Stock, and (ii)
with aggregate proceeds to the Company of
at least $25,000,000 before deductions
for underwriter discounts and commissions
and any and all expenses of such
underwritten offering incurred by the
Company.
"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) for purposes of Section
2.3 and 2.4 only (and to the extent such
provisions relate to Section 2.3 or
2.4, Sections 2.1, 2.5, 2.6, 2.7, 2.8, 2.9,
2.10, 2.11, 2.12, 2.13, 2.14, 2.15
or Section 5), Common Stock owned by GP
Strategies, 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
either 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, excluding any Registrable
Securities as to which the rights under
Section 2 have terminated pursuant to
Section 2.7.
"Registration Expenses" mean all expenses incurred by the
Company in complying with Sections 2.2, 2.3
and 2.4 hereof, including, without
limitation, 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" means the Securities Act of 1933, as amended.
"Selling Expenses" mean all underwriting discounts and selling
commissions applicable to the sale.
"Series A Convertible Preferred Stock" means shares of the
Company's Preferred Stock designated as
Series A Convertible Preferred Stock,
par value $.001 per share.
"Series B Convertible Preferred Stock" means shares of the
Company's Preferred Stock designated as
Series B 10% Convertible Preferred
Stock, par value $.001 per share.
"Shares" mean (i) Series B Convertible Preferred Stock issued
pursuant to the Purchase Agreement held by
the Series B Investors hereto and
their permitted assigns, (ii) Series A
Convertible Preferred Stock held by the
Series A Investors and their permitted
assigns, and (iii) for purposes of
Section 2.3 and 2.4 only (and to the extent
such provisions relate to Section
2.3 or 2.4, Sections 2.1, 2.5, 2.6, 2.7,
2.8, 2.9, 2.10, 2.11, 2.12, 2.13 and
2.14 or Section 5), shares of Common Stock
held by GP Strategies and its
permitted assigns.
"Special Registration Statement" means a registration
statement relating to any employee benefit
plan or with respect to any corporate
reorganization or other transaction under
Rule 145 of the Securities Act.
2. RESTRICTIONS ON TRANSFER;
REGISTRATION.
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
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(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 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
except in unusual circumstances.
Notwithstanding the provisions of paragraphs (i) and (ii)
above, no such registration statement,
detailed statement or opinion of counsel
shall be necessary for a transfer by a
party hereto which is (A) a partnership
to its partners or former partners in
accordance with partnership interests, (B)
a corporation to its shareholders in
accordance with their interest in the
corporation, (C) a limited liability
company to its members or former members in
accordance with their interest in the
limited liability company, (D) to the
party's family member or trust for the
benefit of an individual party, (E) an
entity which is controlled by, controls or
is under common control with the
transferor (an "Affiliate"), or (F) a
Common Stock Investor to another Common
Stock Investor or then current employees of
the Company; provided that in each
case the transferee will be subject to the
terms of this Agreement to the same
extent as if he, she or it were an original
party 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 or under any other
agreement):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE STATE
SECURITIES
OR BLUE SKY LAWS OF ANY JURISDICTION. SUCH SHARES MAY NOT BE
SOLD,
OFFERED FOR SALE, PLEDGED OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND
SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. COPIES OF
THE
AGREEMENTS COVERING THE PURCHASE OF THESE SHARES AND RESTRICTING
THEIR
TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY
THE
HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
CORPORATION.
(c) If such Shares or Registrable
Securities are proposed to be disposed of, the
Company shall be obligated to reissue
promptly certificates without the
foregoing legend 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 may
lawfully be so disposed of thereafter
without registration, qualification, or
legend.
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2.2. Demand Registration.
(a) Subject to the conditions of this
Section 2.2, if the Company shall receive
a written request from a Holder or 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 covering the registration of a
majority of the Registrable Securities
owned by such Initiating Holders, then
the Company shall, within 30 days of
receipt thereof, give written notice of
such request to all Holders and, subject to
the limitations of this Section 2.2,
use its commercially reasonable efforts to
file a registration statement under
the Securities Act with the Commission
covering all Registrable Securities that
the Initiating 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 and the
Company shall include such information in
the written notice referred to in
Section 2.2(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. All
Holders proposing to distribute their
securities through such underwriting shall
enter into an underwriting agreement in
customary form with the underwriter or
underwriters selected for such underwriting
by the Company (which underwriter or
underwriters shall be reasonably acceptable
to a majority in interest of the
Initiating Holders). Notwithstanding any
other provision of this Section 2.2, 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 Holders of Registrable
Securities that would otherwise be
underwritten pursuant hereto, and the number
of shares that may be included in the
underwriting shall be allocated first to
the Holders who are holders of Series B
Convertible Preferred Stock (or shares
of Common Stock issued upon conversion
thereof) and Series A Convertible
Preferred Stock (or shares of Common Stock
issued upon conversion thereof) on a
pro rata basis based on the total number of
Registrable Securities held by such
Holders of Series B Convertible Preferred
Stock and Series A Convertible
Preferred Stock; 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.
(c) The Company shall not be required to
effect a registration pursuant to this
Section 2.2:
(1) prior to the earlier of (A) six months following a
Qualified Offering, and (B) December 31,
2004;
(2) after the Company has effected two (2) registrations
pursuant to Section 2.2(a), and such
registrations have been declared or ordered
effective;
<PAGE>
(3) during the period starting with the date of filing of,
and ending on the date 90 days following
the effective date of, any registration
statement (other than a Special
Registration Statement) of the Company;
(4) if within 30 days of receipt of a written request from
Initiating Holders pursuant to Section
2.2(a), the Company gives notice to the
Holders of the Company's intention to make
a Qualified Offering within 90 days;
(5) if the Company shall furnish to the Initiating Holders,
a certificate signed by the Chairman of the
Board of Directors 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 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 twelve-month period;
or
(6) 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. The Company
shall notify all Holders of
Registrable Securities in writing at least
20 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,
registration statements relating to
secondary offerings of securities of the
Company, but excluding Special Registration
Statements) and will afford each
such Holder an opportunity to include in
such registration statement all or part
of such Registrable Securities held by such
Holder. Each Holder desiring to
include in any such registration statement
all or any part of the Registrable
Securities held by it shall, within 15 days
after the above-described notice
from the Company, so notify the Company in
writing. 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 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.
(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 of Registrable
Securities. 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
in customary form with the underwriter or
underwriters selected for such
underwriting by the Company.
Notwithstanding any other provision of the
Agreement, if the underwriter determines in
good faith that marketing factors
<PAGE>
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 who are
holders of Series B Convertible
Preferred Stock (or shares of Common Stock
issued upon conversion thereof) and
Series A Convertible Preferred Stock (or
shares of Common Stock issued upon
conversion thereof) on a pro rata basis
based on the total number of Registrable
Securities held by such Holders of Series A
Convertible Preferred Stock and
Series B Convertible Preferred Stock; and
third, to the Holders who are holders
of Common Stock (issued otherwise than upon
conversion of Series B Convertible
Preferred Stock or Series A Convertible
Preferred Stock) on a pro rata basis
based on the total number of Registrable
Securities held by such Holders;
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 (other than
securities being offered by the
Company and Registrable Securities being
offered by the Holders) are first
entirely excluded from the underwriting and
registration. 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 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. For any
Holder that is a partnership or
corporation, the partners, retired partners,
stockholders and Affiliates 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 person shall be deemed to be
a single "Holder," and any pro rata
reduction with respect to such "Holder"
shall be based upon the aggregate amount
of shares of Registrable Securities owned
by all entities and individuals
included in such "Holder," as defined in
this sentence.
(b) Right to Terminate Registration. 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-2 and S-3 Registration. In case
the Company shall receive from a
Holder or Holders of at least 50% of the
Registrable Securities then outstanding
a written request or requests that the
Company effect a registration on Form S-2
or 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, use its best
efforts to file such registration
statement as may be so requested and as
would permit or facilitate the sale and
distribution of all or such portion of such
Holder's 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 15 days after receipt of 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:
<PAGE>
(i) if Form S-2 or Form S-3, as the case
may be, is not available for such
offering by the Holders, or
(ii) if the Company shall furnish to the
Holders a certificate signed by the
Chairman of the Board of Directors 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-2 or Form S-3
registration to be effected at such
time, in which event the Company shall have
the right to defer the filing of the
registration statement for a period of not
more than 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 twelve-month period, or
(iii) 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, or
(iv) if the Holders, together with the
holders of any other securities of the
Company entitled to inclusion in such Form
S-2 or Form S-3 registration
statement, propose to sell Registrable
Securities and such other securities (if
any) at an aggregate price to the public of
less than $3,000,000; or
(v) if the Company has filed a registration
statement at the request of Holders
under this Section 2.4 within the preceding
six months.
(c) Subject to the foregoing, the Company
shall file a Form S-2 or Form S-3
registration statement, as the case may be,
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.
(d) If the registration statement under
which the Company gives notice under
this Section 2.4 is for an underwritten
offering, the Company shall so advise
the Holders of Registrable Securities. In
such event, the right of any such
Holder to be included in a registration
pursuant to this Section 2.4 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
in customary form with the underwriter or
underwriters selected for such
underwriting by the Company.
Notwithstanding any other provision of this
Agreement, if the underwriter determines in
good 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 Holders who are holders of Series B
Convertible Preferred Stock (or shares
<PAGE>
of Common Stock issued upon conversion
thereof) and Series A Convertible
Preferred Stock (or shares of Common Stock
issued upon conversion thereof) on a
pro rata basis based on the total number of
Registrable Securities held by such
Holders of Series A Convertible Preferred
Stock and Series B Convertible
Preferred Stock; and second, to the Holders
who are holders of Common Stock
issued other than upon conversion of the
Series B Convertible Preferred Stock or
Series A Convertible Preferred Stock on a
pro rata basis based on the total
number of Registrable Securities held by
such Holders; 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 (other than securities being
offered by the Company and
Registrable Securities being offered by the
Holders) are first entirely excluded
from the underwriting and registration. 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. For any
Holder which is a partnership or
corporation, the partners, retired
partners, stockholders and Affiliates 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 person shall be
deemed to be a single "Holder," and any pro
rata reduction with respect to such
"Holder" shall be based upon the aggregate
amount of shares of Registrable
Securities owned by all entities and
individuals included in such "Holder," as
defined in this sentence.
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; provided,
however, that the Company shall not be
required to pay any Registration Expenses
incurred in connection with any
registration, qualification or compliance
proceedings begun pursuant to a request
under Section 2.2 if such request is
subsequently withdrawn by the Holders of a
majority of the Registrable
Securities to be included in such
registration, qualification or compliance (in
which case all participating Holders shall
bear all such Registration Expenses).
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
and sold.
2.6. Obligations of the Company. Whe
