Exhibit 4.2
I NNERWORKINGS , I NC .
I NVESTOR R IGHTS A GREEMENT
I NNERWORKINGS , I NC .
I NVESTOR R IGHTS A GREEMENT
T HIS I NVESTOR R IGHTS A GREEMENT (the “ Agreement ”) is
entered into as of the 13 th day of December, 2005 and deemed
effective as of January 3, 2006 (the “ Effective
Date ”), by and among I NNERWORKINGS
, I
NC
.
, a Delaware corporation
(the “ Company ”) and the investors
listed on Exhibit A , referred to in this
Agreement as the “ Investors ” and each
individually as an “ Investor
.”
R ECITALS
W HEREAS , certain of the Investors are purchasing shares
of the Company’s Series E Preferred Stock (the “
Series E Preferred ”) pursuant to that
certain Series E Preferred Stock Purchase Agreement (the
“ Purchase Agreement ”) as of this date
(the “ Financing ”);
W HEREAS , the
obligations in the Purchase Agreement are conditioned upon the
execution and delivery of this Agreement;
W HEREAS , in
connection with the consummation of the Financing, the Company, the
Investors holding Series E Preferred, the Investors holding shares
of the Company’s Series B Preferred Stock (the “
Series B Preferred ”) and the Investors holding
shares of the Company’s Series D Preferred Stock (the “
Series D Preferred ” and together with the
Series B Preferred and the Series E Preferred, the “
Preferred Stock ”) have agreed to enter into
this Agreement in order to grant registration, information rights
and other rights to the Investors and the other holders of
Preferred Stock as set forth below; and
W HEREAS , the
holders of Series B Preferred and Series D Preferred (the “
Prior Investors ”) and the Company are parties
to a Second Amended and Restated Investor Rights Agreement dated
August 19, 2004 (the “ Prior Agreement
”);
W HEREAS , prior to the consummation of the Financing, the
Company has converted from a limited liability company to a
corporation (the “ Reorganization ”) and,
in connection with such Reorganization, the Prior Agreement is
being amended and restated.
N OW ,
T HEREFORE
, in consideration of these premises and for other
good and valuable consideration, the receipt and sufficiency of
which are acknowledged, the parties agree as follows:
SECTION 1.
GENERAL.
1.1 Amendment and Restatement of
Prior Agreement. The
Prior Agreement is hereby amended in its entirety and restated
herein. Such amendment and restatement is effective upon the
consummation of the Reorganization and the execution of this
Agreement by the Company, the A Common Investors (as defined in the
Prior Agreement) holding more than 50% of the outstanding A Common
Units (as defined in the Prior Agreement), the holders of not
less
1.
than 60% of the outstanding B Preferred Units
(as defined in the Prior Agreement) and the D Preferred Investors
(as defined in the Prior Agreement) holding at least 60% of the
outstanding D Preferred Units (as defined in the Prior Agreement).
Upon such execution, all provisions of, rights granted and
covenants made in the Prior Agreement are hereby waived, released
and superseded in their entirety and shall have no further force or
effect, including, without limitation, all rights of first refusal
and any notice period associated therewith otherwise applicable to
the transactions contemplated by the Purchase Agreement.
1.2 Definitions.
As used in this Agreement the
following terms shall have the following respective
meanings:
(a) “Board” shall mean the
Company’s Board of Directors.
(b) “Certificate” shall
mean the Company’s Amended and Restated Certificate of
Incorporation as filed with the Delaware Secretary of State on
January 3, 2006, as amended from time to time.
(c) “Class A Common Stock” shall
mean the Company’s Class A Common Stock, $0.0001 par
value per share.
(d) “Class B Common Stock” shall
mean the Company’s Class B Common Stock, $0.0001 par value
per share.
(e) “Common Stock” shall
mean the Company’s Class A Common Stock, and Class B
Common Stock.
(f) “Exchange Act” means
the Securities Exchange Act of 1934, as amended.
(g) “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.
(h) “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 hereof.
(i) “Initial Offering”
means the Company’s first firm commitment underwritten public
offering of its Common Stock registered under the Securities
Act.
(j) “ NEA ” means New
Enterprise Associates 11, Limited Partnership or its
affiliates.
(k) “ PrintWorks ” means
PrintWorks Series E, LLC.
2.
(l) “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.
(m) “Registrable
Securities” means (a) shares of Common Stock,
(b) Class A Common Stock of the Company issuable or
issued upon conversion of the Shares 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 (i) sold by a person to the public
either pursuant to a registration statement or Rule 144,
(ii) sold in a private transaction in which the
transferor’s rights under Section 2 of this Agreement
are not assigned or (iii) held by a Holder (together with its
affiliates) if , as reflected on the Company’s list of
stockholders, such Holder (together with its affiliates) holds less
than 1% of the Company’s outstanding Common Stock (treating
all shares of Preferred Stock on an as converted basis), the
Company has completed its Initial Offering and all shares of Common
Stock of the Company issuable or issued upon conversion of the
Shares held by and issuable to such Holder (and its affiliates) may
be sold pursuant to Rule 144 during any ninety (90) day
period.
(n) “Registrable Securities then
outstanding” shall be the 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.
(o) “Registration
Expenses” shall 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 not to exceed
twenty-five thousand dollars ($25,000) 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).
(p) “SEC” or
“Commission” means the Securities and
Exchange Commission.
(q) “Securities Act” shall
mean the Securities Act of 1933, as amended.
(r) “Selling Expenses”
shall mean all underwriting discounts and selling commissions
applicable to the sale.
(s) “Shares” shall mean
(i) the Company’s Series E Preferred issued pursuant to
the Purchase Agreement and (ii) shares of the Company’s
Preferred Stock held from time to time by the Investors listed on
Exhibit A hereto and their permitted
assigns.
(t) “Special Registration
Statement” shall mean (i) a registration
statement relating to any employee benefit plan or (ii) with
respect to any corporate reorganization or transaction under
Rule 145 of the Securities Act, any registration statements
related to the
3.
issuance or resale of securities
issued in such a transaction or (iii) a registration related
to stock issued upon conversion of debt securities.
SECTION 2. REGISTRATION;
RESTRICTIONS ON TRANSFER.
2.1 Restrictions on
Transfer.
(a) Each Holder agrees not to make any disposition
of all or any portion of the Shares or Registrable Securities
unless and until:
(i) there is then in effect a registration statement
under the Securities Act covering such proposed disposition and
such disposition is made in accordance with such registration
statement; or
(ii) (A) The transferee has agreed in writing to
be bound by the terms of this Agreement, (B) such Holder shall
have notified the Company of the proposed disposition and shall
have furnished the Company with a detailed statement of the
circumstances surrounding the proposed disposition, and (C) if
reasonably requested by the Company, such Holder shall have
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. After its Initial Offering, the Company will not
require any transferee pursuant to Rule 144 to be bound by the
terms of this Agreement if the shares so transferred do not remain
Registrable Securities hereunder following such
transfer.
(b) Notwithstanding the provisions of subsection
(a) above, no such restriction shall apply to a transfer by a
Holder that is (A) a partnership transferring to its partners
or former partners in accordance with partnership interests,
(B) a corporation transferring to a wholly-owned subsidiary or
a parent corporation that owns all of the capital stock of the
Holder, (C) a limited liability company transferring to its
members or former members in accordance with their interest in the
limited liability company, (D) an individual transferring to
the Holder’s family members or trust or other entity for the
benefit of an individual Holder or his family members, or
(E) a trust transferring to its grantors or beneficiaries;
provided that in each case the transferee will agree in
writing to be subject to the terms of this Agreement to the same
extent as if he were an original Holder hereunder.
(c) Each certificate representing Shares or
Registrable Securities shall be stamped or otherwise imprinted with
legends 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 (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 SATISFACTORY TO
4.
THE COMPANY AND ITS COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED.
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 STOCKHOLDER AND THE COMPANY. COPIES OF
SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE
SECRETARY OF THE COMPANY.
(d) The Company shall be obligated to reissue
promptly unlegended certificates at the request of any Holder
thereof if the Company has completed its Initial Offering and 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 disposed of may
lawfully be so disposed of without registration, qualification and
legend, provided that the second legend listed above shall
be removed only at such time as the Holder of such certificate is
no longer subject to any restrictions hereunder.
(e) Any legend endorsed on an instrument pursuant to
applicable state securities laws and the stop-transfer instructions
with respect to such securities shall be removed upon receipt by
the Company of an order of the appropriate blue sky authority
authorizing such removal.
2.2 Demand
Registration.
(a) Subject to the conditions of this
Section 2.2, if the Company shall receive a written request
from the Holders of a majority of the Series E Preferred, including
Class A Common Stock issued on conversion of Series E
Preferred (the “ Initiating Holders ”),
that the Company file a registration statement under the Securities
Act covering the registration of an aggregate offering price to the
public of at least $10,000,000 of the Registrable Securities then
outstanding (a “ Qualified Public Offering
”), then the Company shall, within thirty (30) days of
the receipt thereof, give written notice of such request to all
Holders, and subject to the limitations of this Section 2.2,
effect, as expeditiously as reasonably possible, the registration
under the Securities Act of all Registrable Securities that all
Holders request to be registered.
(b) If the Initiating Holders intend to distribute
the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their
request made pursuant to this Section 2.2 or any request
pursuant to Section 2.4 and the Company shall include such
information in the written notice referred to in
Section 2.2(a) or Section 2.4(a), as applicable. In such
event, the right of any Holder to include its Registrable
Securities in such registration shall be conditioned upon such
Holder’s participation in such underwriting and the inclusion
of such Holder’s Registrable Securities in the underwriting
to the extent provided herein. 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
5.
underwriters shall be reasonably
acceptable to the Holders of a majority of the Registrable
Securities held by all Initiating Holders). Subject to
Section 2.2(d), 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
to the Holders of such Registrable Securities on a pro rata
basis based on the number of Registrable Securities held by all
such Holders (including the Initiating 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 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:
(i) prior to the earlier of (A) the fourth
anniversary of the date of this Agreement or (B) six
(6) months following the Initial Offering;
(ii) after the Company has effected two
(2) registrations pursuant to this Section 2.2, and such
registrations have been declared or ordered effective;
(iii) during the period starting with the date of
filing of, and ending on the date one hundred eighty
(180) days following the effective date of the registration
statement pertaining to the Initial Offering (or such longer period
as may be determined pursuant to Section 2.11 hereof);
provided that the Company makes reasonable good faith
efforts to cause such registration statement to become
effective;
(iv) if within thirty (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 file a registration statement for its
Initial Offering within ninety (90) days;
(v) if the Company shall furnish to Holders
requesting a registration statement pursuant to this
Section 2.2 a certificate signed by the Chairman of the Board
stating that in the good faith judgment of the Board of Directors
of the Company, it would be materially 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 ninety
(90) days after receipt of the request of the Initiating
Holders; provided that such right to delay a request shall
be exercised by the Company not more than once in any twelve
(12) month period; or
(vi) if the Initiating Holders propose to dispose of
shares of Registrable Securities that may be immediately registered
on Form S-3 pursuant to a request made pursuant to
Section 2.4 below.
(d) Notwithstanding anything to the contrary in this
Agreement, NEA and PrintWorks shall be entitled to sell at its
discretion Registrable Shares in the Initial Offering
with
6.
an aggregate offering price to the
public of at least $25,000,000. If the underwriter advises the
Company and NEA and PrintWorks that marketing factors require a
limitation of the number of securities to be underwritten
(including Registrable Securities) by NEA and Printworks such that
NEA and PrintWorks sell Registrable Securities in the Initial
Offering with an aggregate offering price of less than $25,000,000,
then NEA and Printworks shall be entitled, on a pro rata basis
based upon the number of shares of Series E Preferred held by NEA
and PrintWorks, respectively, and the Company shall be required to
offer the balance of any such shares not sold at in the Initial
Offering in the next subsequent secondary offering(s) of the
Company’s shares until NEA and Printworks have sold
Registrable Shares with an aggregate offering price of at least
$25,000,000. Any such sales in connection with any secondary
offering shall be free of any other cutbacks or limitations
described in this Section 2. After NEA and Printworks have
been able to sell Registrable Shares with an aggregate offering
price of $25,000,000 or more either in connection with the Initial
Offering or any secondary offering, as applicable, NEA and
Printworks shall be entitled to register its remaining Registrable
Shares in accordance with the registration rights described in this
Section 2 and shall be allowed to participate in the sale of
secondary shares on a prorated as-converted basis with the other
stockholders of the Company.
2.3 Piggyback Registrations. The Company
shall notify all Holders of Registrable Securities in writing at
least fifteen (15) 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 fifteen
(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 of 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 include Registrable Securities 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 this Agreement, subject to Section 2.2(d),
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 Company; second, to the Holders on a
pro rata basis 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;
provided, however , that no such reduction
7.
shall reduce the amount of
securities of the selling Holders included in the registration
below twenty five percent (25%) of the total amount of
securities included in such registration, unless such offering is
the Initial Offering and such registration does not include shares
of any other selling stockholders, in which event any or all of the
Registrable Securities of the Holders may be excluded in accordance
with the immediately preceding clause. If the Holders are so
limited, however, no party shall sell shares in such registration
other than the Company. In no event will shares of any other
selling stockholder be included in such registration that would
reduce the number of shares which may be included by Holders
without the written consent of Holders of not less than a majority
of the Registrable Securities proposed to be sold in the offering.
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,
limited liability company, corporation, trust or natural person,
the partners, retired partners, members, retired members,
stockholders, beneficiaries, grantors and family members of such
Holder, or the estates and family members of any such partners,
retired partners, members, retired members, beneficiaries, grantors
and family members and any trusts or other entities for the benefit
of any of the foregoing persons 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 carrying registration rights owned by
all entities and individuals included in such “Holder,”
as defined in this sentence or as otherwise provided in
Section 5.12.
(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 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 2.5 hereof.
2.4 Form S-3 Registration. In case the
Company shall receive from any Holder or Holders of Registrable
Securities a written request or requests that the Company effect a
registration on Form S-3 (or any 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:
(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all
other Holders of Registrable Securities; and
(b) as soon as practicable, effect such registration
and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution of all
or such portion of such Holder’s or Holders’
Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a
written request given within fifteen (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:
8.
(i) if Form S-3 is not available for such
offering by the Holders, or
(ii) if the Holders, together with the holders of any
other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public of less
than one million dollars ($1,000,000), or
(iii) if within thirty (30) days of receipt of a
written request from any Holder or Holders pursuant to this
Section 2.4, the Company gives notice to such Holder or
Holders of the Company’s intention to make a public offering
within ninety (90) days, other than pursuant to a Special
Registration Statement;
(iv) if the Company has, within the twelve
(12) month period preceding the date of such request, already
effected two (2) registrations on Form S-3 for the
Holders pursuant to this Section 2.4; or
(v) if the Company shall furnish to the Holders a
certificate signed by the Chairman of the Board of Directors of the
Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be materially 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 defer the filing of the Form S-3 registration
statement for a period of not more than one hundred twenty
(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 twelve (12) month period.
(c) Subject to the foregoing, the Company shall file
a Form S-3 registration statement covering the Registrable
Securities and other securities so requested to be registered as
soon as practicable after receipt of the requests of the Holders.
Registrations effected pursuant to this Section 2.4 shall not
be counted as demands for registration or registrations effected
pursuant to Section 2.2. All Registration Expenses incurred in
connection with registrations requested pursuant to this
Section 2.4 shall be paid by the Company, including the
expense of one (1) special counsel of the selling
stockholders.
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, 2.3 or 2.4 herein shall be borne by
the Company. All Selling Expenses incurred in connection with any
registrations hereunder, shall be borne by the holders of the
securities so registered pro rata on the basis of the number
of shares so registered. The Company shall not, however, be
required to pay for expenses of any registration proceeding begun
pursuant to Section 2.2 or 2.4, the request of which has been
subsequently withdrawn by the Initiating Holders unless
(a) the withdrawal is based upon material adverse information
concerning the Company of which the Initiating Holders were not
aware at the time of such request or (b) the Holders of a
majority of Registrable Securities agree to deem such registration
to have been effected as of the date of such withdrawal for
purposes of determining whether the Company shall be obligated
pursuant to Section 2.2(c) or 2.4(b), as applicable, to
undertake any subsequent registration, in which event such right
shall be forfeited by all Holders). If the Holders are required to
pay the Registration Expenses, such expenses shall be borne by
the
9.
holders of securities (including Registrable
Securities) requesting such registration in proportion to the
number of shares for which registration was requested. If the
Company is required to pay the Registration Expenses of a withdrawn
offering pursuant to clause (a) above, then such registration
shall not be deemed to have been effected for purposes of
determining whether the Company shall be obligated pursuant to
Section 2.2(c) or 2.4(b), as applicable, to undertake any
subsequent registration.
2.6 Obligations of the
Company. Whenever
required to effect the registration of any Registrable Securities,
the Company shall, as expeditiously as reasonably
possible:
(a) prepare and file with the SEC a registration
statement with respect to such Registrable Securities 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 thirty (30) days
or, if earlier, until the Holder or Holders have completed the
distribution related thereto; provided, however, that at any time,
upon written notice to the participating Holders and for a period
not to exceed sixty (60) days thereafter (the “
Suspension Period ”), the Company may delay the
filing or effectiveness of any registration statement or suspend
the use or effectiveness of any registration statement (and the
Initiating Holders hereby agree not to offer or sell any
Registrable Securities pursuant to such registration statement
during the Suspension Period) if the Company reasonably believes
that there is or may be in existence material nonpublic information
or events involving the Company, the failure of which to be
disclosed in the prospectus included in the registration statement
could result in a Violation (as defined below). In the event that
the Company shall exercise its right to delay or suspend the filing
or effectiveness of a registration hereunder, the applicable time
period during which the registration statement is to remain
effective shall be extended by a period of time equal to the
duration of the Suspension Period. The Company may extend the
Suspension Period for an additional consecutive sixty
(60) days with the consent of the holders of a majority of the
Registrable Securities registered under the applicable registration
statement, which consent shall not be unreasonably withheld. No
more than one (1) such Suspension Periods shall occur in any
twelve (12) month period. In no event shall any Suspension
Period, when taken together with all prior Suspension Periods,
exceed 120 days in the aggregate. If so directed by the Company,
all Holders registering shares under such registration statement
shall (i) not offer to sell any Registrable Securities
pursuant to the registration statement during the period in which
the delay or suspension is in effect after receiving notice of such
delay or suspension; and (ii) use their best efforts to
deliver to the Company (at the Company’s expense) all copies,
other than permanent file copies then in such Holders’
possession, of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice.
Notwithstanding the foregoing, the Company shall not be required to
file, cause to become effective or maintain the effectiveness of
any registration statement other than a registration statement on
Form S-3 that contemplates a distribution of securities on a
delayed or continuous basis pursuant to Rule 415 under the
Securities Act.
(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
subsection (a) above.
10.
(c) Furnish to the Holders such number of copies of
a prospectus, including a preliminary prospectus, in conformity
with the req