<PAGE>
Exh. 4.2
EXECUTION VERSION
INVESTOR RIGHTS AGREEMENT
BY
AND AMONG
OMRIX BIOPHARMACEUTICALS, INC.
AND
THE COMMON STOCKHOLDERS LISTED ON EXHIBIT A HERETO
----------
January 13, 2005
----------
<PAGE>
INVESTOR RIGHTS AGREEMENT
This
Investor Rights Agreement (this "Agreement") dated as of January
13,
2005 is entered into by and among Omrix Biopharmaceuticals, Inc., a
Delaware
corporation (the "Company"), and the holders of the Company's
Common Stock
listed on Exhibit A hereto (the "Common Stockholders")
RECITALS:
WHEREAS, pursuant to the Plan of Recapitalization (the "Plan of
Recapitalization") of even date herewith by and among the Company,
the Preferred
Stockholders and the Noteholders (each, as defined therein),
certain holders of
the Company's securities are exchanging all of the convertible
promissory notes,
shares of Preferred Stock and certain other securities of the
Company for shares
of Company's Common Stock (the "Recapitalization"); and
WHEREAS, as a condition precedent to the Recapitalization, the
Company and
the Common Stockholders desire to enter into this Agreement to
provide for
certain arrangements with respect to (i) the registration of shares
of capital
stock of the Company under the Securities Act; (ii) the Common
Stockholders'
right of first refusal with respect to certain issuances of
securities of the
Company, and (iii) certain covenants of the Company in accordance
with the terms
and conditions set forth below.
NOW,
THEREFORE, in consideration of the mutual promises and
covenants
contained in this Agreement and other good and valuable
consideration, the
receipt and adequacy of which are hereby acknowledged the parties
hereto agree
as follows:
SECTION 1
CERTAIN DEFINITIONS
As
used in this Agreement, the following terms shall have the
following
respective meanings:
1.1
"Affiliate" means any person or entity directly or indirectly
controlling, controlled by or under common control with another
person or
entity, provided that, with respect to the Company and any Common
Stockholder
that is a partnership, corporation or limited liability company, an
"Affiliate"
shall also include without limitation, any general partner, limited
partner,
retired partner, shareholder, member, retired member, officer,
director or
affiliate of the Company or such Common Stockholder, as applicable,
or any
general partner, limited partner, retired partner, shareholder,
member, retired
member, officer, director or affiliate of the foregoing, or
investment vehicles
now or hereafter existing for whom any of the foregoing serves as a
general
partner or manager, as applicable, or the estates, beneficiaries,
trustees or
family members of any such general partner, limited partner,
retired partner,
shareholder, member, retired member, officer, director or affiliate
of the
foregoing, or any trusts for the benefit of any of the foregoing
persons.
<PAGE>
1.2
"Available Undersubscription Amount" means the difference between
the
total of all Basic Amounts available for purchase by the Major
Investors
pursuant to Section 3 and the Basic Amounts subscribed for pursuant
to Section
3.
1.3
"Basic Amount" means, with respect to a Major Investor, his, her or
its
pro rata portion of the Offered Securities determined by
multiplying the number
of Offered Securities by a fraction, the numerator of which is the
aggregate
number of shares of Common Stock then held by such Major Investor
(giving effect
to the conversion or exercise into Common Stock of convertible or
exercisable
securities then held by such Major Investor that are then
convertible or
exercisable for shares of Common Stock without the payment of
additional
consideration) and the denominator of which is the total number of
shares of
Common Stock then outstanding (giving effect to the conversion or
exercise into
Common Stock of all outstanding convertible or exercisable
securities that are
then convertible or exercisable for shares of Common Stock without
the payment
of additional consideration).
1.4
"By-laws" means the Company's Amended and Restated By-laws, as
amended
from time to time.
1.5
"Certificate of Incorporation" means the Company's Amended and
Restated
Certificate of Incorporation, as amended from time to time.
1.6
"Code" means the Internal Revenue Code of 1986, as amended.
1.7
"Commission" means the Securities and Exchange Commission, or any
other
Federal agency at the time administering the Securities Act.
1.8
"Common Stock" means the common stock, $0.01 par value per share,
of
the Company.
1.9
"Company" has the meaning ascribed to it in the introductory
paragraph
hereto.
1.10
"Company Sale" means (a) a merger or consolidation in which (i)
the
Company is a constituent party, or (ii) a Subsidiary of the Company
is a
constituent party and either (x) the Company issues shares of its
capital stock
pursuant to such merger or consolidation, or (y) as a result of
such merger or
consolidation of a Subsidiary, the Company's ownership interest in
the surviving
entity is reduced, except any such merger or consolidation referred
to in (a)(i)
or (a)(ii) above involving the Company or a Subsidiary in which the
holders of
capital stock of the Company immediately prior to such merger or
consolidation
continue to hold immediately following such merger or consolidation
at least a
majority of the voting power of (1) the surviving or resulting
entity or (2) if
the surviving or resulting entity is a wholly-owned subsidiary of
another entity
immediately following such merger or consolidation, the parent
entity of such
surviving or resulting entity provided, that, for purposes of the
exceptions
described in the foregoing clauses (1) and (2), the holders or
former holders of
the Company's Common Stock shall, as among themselves, own the
capital stock of
such surviving or resulting entity in approximately the same
relative
proportions as they owned the Company's Common Stock prior to such
merger or
consolidation; (b) the disposition by holders of the Company's then
outstanding
capital stock of at least a majority of the then outstanding equity
voting power
of the Company in a single or a series of related transactions; (c)
the sale,
lease or other
2
<PAGE>
disposition of all or substantially all of the assets of the
Company in a single
transaction or series of related transactions (except any such sale
to a
wholly-owned subsidiary of the Company unless such sale, lease or
other
disposition is followed by a subsequent disposition or transfer of
at least a
majority of the then outstanding equity voting power of the Company
or such
Subsidiary in a single or a series of related transactions); or (d)
the
disposition by exclusive license, sale, assignment or otherwise of
all or
substantially all or a significant portion of the intellectual
property rights
of the Company, except for non-exclusive licenses under such
intellectual
property rights in the ordinary course of business.
1.11
"Exchange Act" means the Securities Exchange Act of 1934, as
amended,
or any successor statute, and the rules and regulations of the
Commission issued
under such Act, as they each may, from time to time, be in
effect.
1.12
"Indemnified Party" means a party entitled to indemnification
pursuant
to Section 2.6.
1.13
"Indemnifying Party" means a party obligated to provide
indemnification pursuant to Section 2.6.
1.14
"Initiating Holder" means any Common Stockholder initiating a
request
for registration pursuant to Section 2.1(a) or any Major Investor
initiating a
request for registration pursuant to Section 2.1(b), as the case
may be.
1.15
"Initial Public Offering" means the closing of the initial
underwritten public offering of shares of Common Stock pursuant to
an effective
Registration Statement under the Securities Act.
1.16
"Major Investor" means any Common Stockholder who owns on the date
of
such determination greater than 1% of the then outstanding shares
of Common
Stock; provided that for purposes of determining whether a Common
Stockholder is
a Major Investor all shares of Common Stock held by any Affiliate
of such Common
Stockholder shall be deemed to be held by such Common
Stockholder.
1.17
"MPM" means, collectively, MPM Capital Advisors LLC, BB
BioVentures
LLP, MPM Asset Management Investors 1998 LLC, MPM BioVentures
Parallel Fund,
L.P. and Affiliates thereof, together with their respective
successors and
assigns.
1.18
"Notice of Acceptance" means a written notice from a Common
Stockholder to the Company containing the information specified in
Section
3.1(b).
1.19
"Offer" means a written notice of any proposed or intended
issuance,
sale or exchange of Offered Securities containing the information
specified in
Section 3.1(a).
1.20
"Offered Securities" means (i) any shares of Common Stock, (ii)
any
other equity securities of the Company, (iii) any option, warrant
or other right
to subscribe for, purchase or otherwise acquire any equity
securities of the
Company or (iv) any debt securities convertible into or
exchangeable for capital
stock of the Company.
3
<PAGE>
1.21
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by an amendment or prospectus
supplement,
including post-effective amendments, and all material incorporated
by reference
or deemed to be incorporated by reference in such Prospectus.
1.22
"Plan of Recapitalization" has the meaning ascribed to it in
the
recitals hereto.
1.23
"Refused Securities" means those Offered Securities as to which
a
Notice of Acceptance has not been given by the Common Stockholders
pursuant to
Section 3.1.
1.24
"Registration Expenses" means all expenses incurred by the Company
in
complying with the provisions of Section 2, including, without
limitation, all
registration and filing fees, exchange listing fees, printing
expenses, fees and
expenses of counsel for the Company and the fees and expenses of
one counsel to
represent all Selling Stockholders selected by holders of a
majority of the
Registrable Shares held by the Selling Stockholders, state Blue Sky
fees and
expenses, and the expense of any special audits incident to or
required by any
such registration, but excluding underwriting discounts, selling
commissions and
the fees and expenses of any additional counsel to the Selling
Stockholders'.
1.25
"Registrable Shares" means (i) the Shares (as defined in Section
1.29)
acquired by the Common Stockholders, (ii) any other shares of
Common Stock, and
any shares of Common Stock issued or issuable upon the conversion
or exercise of
any other securities acquired by the Common Stockholders after the
date hereof
(other than Shares acquired in the public market pursuant to
brokers'
transactions after the Company's Initial Public Offering), and
(iii) any other
shares of Common Stock issued in respect of such shares or
securities (because
of stock splits, stock dividends, reclassifications,
recapitalizations, or
similar events); provided however, that shares of Common Stock
which are
Registrable Shares shall cease to be Registrable Shares (x) upon
any sale of
such shares pursuant to a Registration Statement or Rule 144 under
the
Securities Act or (y) upon any sale in any manner to a person or
entity that is
not entitled pursuant to Section 5 to the rights provided by this
Agreement or
(z) as to any Shares held by any Common Stockholder, when the
aggregate number
of shares held by such Common Stockholder is less than 100,000
shares and such
Shares are eligible for resale pursuant to Rule 144(k) under the
Securities Act.
Wherever reference is made in this Agreement to a request or
consent of holders
of a certain percentage of Registrable Shares, the determination of
such
percentage shall include shares of Common Stock issuable upon
conversion of such
Registrable Shares even if such conversion has not yet been
effected.
1.26
"Registration Statement" means a registration statement filed by
the
Company with the Commission for a public offering and sale of
securities of the
Company (other than a registration statement on Form S-8 or Form
S-4, or their
successors, or any other form for a similar limited purpose, or any
registration
statement covering only securities proposed to be issued in
exchange for
securities or assets of another corporation).
1.27
"Securities Act" means the Securities Act of 1933, as amended, or
any
successor Federal statute, and the rules and regulations of the
Commission
issued under such Act, as they each may, from time to time, be in
effect.
4
<PAGE>
1.28
"Selling Stockholder" means any Common Stockholder or Major
Investor,
as the case may be, and his, her or its successors or assigns
owning Registrable
Shares included in a Registration Statement.
1.29
"Shares" means shares of Common Stock owned by the Common
Stockholders.
1.30
"Stockholders Agreement" means the Stockholders' Agreement dated as
of
the date hereof by and among the Company and the Common
Stockholders named
therein.
1.31
"Subsidiary" or "Subsidiaries" means any corporation,
partnership,
limited liability company, trust or other entity of which the
Company directly
or indirectly owns at the time (a) a majority of the outstanding
shares of every
class of voting equity securities of such corporation, partnership,
limited
liability company, trust or other entity or (b) the right to
receive more than
50% of the net assets of such entity available for distribution to
the holders
of outstanding stock or ownership interests upon a liquidation or
dissolution of
such entity.
1.32
"Undersubscription Amount" means, with respect to a Major
Investor,
any additional portion of the Offered Securities attributable to
the Basic
Amounts of other Major Investors as such Major Investor indicates
it will
purchase or acquire should the other Major Investors subscribe for
less than
their Basic Amounts.
SECTION 2
REGISTRATION RIGHTS
2.1
Required Registrations
(a) At any time after 180 days following the Initial Public
Offering,
a Common Stockholder or Common Stockholders holding in the
aggregate at least a
majority of the Registrable Shares then outstanding may request, in
writing,
that the Company effect the registration on Form S-1 or, after the
Company
becomes eligible to use such form, Form S-2 (or any successor form)
of
Registrable Shares owned by such Common Stockholder or Common
Stockholders.
Except as provided in Section 2.1(c), the Company shall not
register any
additional shares of stock of the Company on a Registration
Statement at the
same time as a demand registration pursuant to this Section 2.1(a)
without the
prior written consent of the holders of at least a majority of the
Registrable
Shares to be included in the demand registration.
(b) At any time after the Company becomes eligible to file a
Registration Statement on Form S-3 (or any successor form relating
to secondary
offerings), a Major Investor or Major Investors holding, in the
aggregate, not
less than 1,000,000 Registrable Shares (as adjusted for any stock
dividends,
combinations, splits, recapitalizations and the like with respect
to such shares
after the date hereof) may request, in writing, that the Company
effect the
registration on Form S-3 (or any successor form relating to
secondary
offerings).
(c) Upon receipt of any request for registration pursuant to
Section
2.1(a), the Company shall promptly give written notice of such
proposed
registration to all other Common Stockholders in accordance with
Section 6.1.
Upon receipt of any request for registration pursuant to Section
2(b), the
Company shall promptly give written notice of such proposed
5
<PAGE>
registration to all other Major Investors in accordance with
Section 6.1. Such
Common Stockholders or Major Investors, as applicable, shall have
the right, by
giving written notice, to the Company within 30 days after the
Company provides
its registration notice, to elect to have included in such
registration the
number of Registrable Shares as such Common Stockholders or Major
Investors, as
applicable, may request in such notice of election, subject in the
case of an
underwritten offering to the terms of Section 2.1(d). Thereupon,
the Company
shall, as expeditiously as possible, use its best commercial
efforts to effect
the registration on an appropriate Registration Statement of all
Registrable
Shares that the Company has been requested to so register; provided
however,
that in the case of a registration requested under Section 2.1(b),
the Company
will only be obligated to effect such registration on Form S-3 (or
any successor
form).
(d) If the Initiating Holders intend to distribute the
Registrable
Shares covered by their request by means of an underwriting, they
shall so
advise the Company as a part of their request made pursuant to
Section 2.1(a)
or (b), as the case may be, and the Company shall include such
information in
its written notice referred to in Section 2.l(c). In such event,
(i) the right
of any other Common Stockholder to include its Registrable Shares
in such
registration pursuant to Section 2.l(a) and the right of any other
Major
Investor to include its Registrable Shares in such registration
pursuant to
Section 2.l(b), as the case may be, shall be conditioned upon such
other Common
Stockholder's or Major Investor's participation in such
underwriting on the
terms set forth herein, and (ii) all Common Stockholders or Major
Investors, as
applicable, including Registrable Shares in such registration shall
enter into
an underwriting agreement upon customary terms with the underwriter
or
underwriters managing the offering. The Initiating Holders shall
have the right
to select the managing underwriter(s) for any underwritten offering
requested
pursuant to Section 2.l(a) or (b), subject to the approval of the
Company, which
approval will not be unreasonably withheld, conditioned or delayed.
If any
Common Stockholder or Major Investor, as applicable, who has
requested inclusion
of its Registrable Shares in such registration as provided above
disapproves of
the terms of the underwriting, such person may elect, by written
notice to the
Company, to withdraw its Registrable Shares from such registration
and
underwriting. In an underwritten offering, if the managing
underwriter advises
the Company in writing that market factors require a limitation on
the number of
shares to be underwritten, the number of Registrable Shares to be
included in
the Registration Statement and underwriting shall be allocated
among all Common
Stockholders or Major Investors, as applicable, requesting
registration in
proportion, as nearly as practicable, to the respective number of
Registrable
Shares held by them on the date of the request for registration
made by the
Initiating Holders pursuant to Section 2.1(a) or (b), as the case
may be. If
any Common Stockholder or Major Investor, as applicable, would thus
be entitled
to include more Registrable Shares than such Common Stockholder or
Major
Investor requested to be registered, the excess shall be allocated
among other
requesting Common Stockholders or Major Investors, as applicable,
pro rata in
the manner described in the preceding sentence.
(e) The Company shall not be required to effect more than two
(2)
registrations requested by the Common Stockholders pursuant to
paragraph (a)
above. In addition, the Company shall not be required to effect any
registration
(other than on Form S-3 or any successor form) within one hundred
twenty (120)
days after the effective date of any other Registration Statement
of the Company
or within one hundred eighty (180) days after the effective date of
the
Registration Statement for the Initial Public Offering of the
Company's
6
<PAGE>
Common Stock. For purposes of this Section 2.1(e), a Registration
Statement
shall not be counted (i) until such time as such Registration
Statement has been
declared effective by the Commission (unless the Initiating Holders
withdraw
their request for such registration (other than as a result of
information
concerning a materially adverse change in the business, properties,
assets or
condition (financial or otherwise) of the Company which is made
known to the
Common Stockholders after the date on which such registration was
requested) and
elect not to pay the Registration Expenses therefor pursuant to
Section 2.5) or
(ii) if (A) less than sixty percent (60%) of the total number of
Registrable
Shares that Common Stockholders have requested to be included in
such
Registration Statement are sold (in the case of a Registration
Statement for an
underwritten offering) or included in such Registration Statement
at the time it
is declared effective (in the case of a Registration Statement for
an "at the
market" secondary offering or a shelf registration) or (B) the
Company or any
other person registers additional shares of stock of the Company on
a
Registration Statement at the same time as a demand registration
pursuant to
this Section 2.1, except (x) as required by Section 2.1(c) or (y)
a
Registration Statement on Form S-8, Form S-4, or any similar or
successor form.
(f) If at the time of any request to register Registrable
Shares
pursuant to this Section 2.1 the Company is engaged or has plans to
engage in a
registered public offering or is engaged in any other activity
which, in the
good faith determination of the Company's Board of Directors, would
be adversely
affected by the requested registration, then the Company may at its
option
direct that such request be delayed for a period not in excess of
ninety (90)
days from the effective date of such request, provided that such
right to delay
a request may not be exercised by the Company more than once in any
twelve month
period, and the Company shall thereafter promptly file a
Registration Statement
and cause such Registration Statement to become effective as soon
as possible
after filing.
2.2
Incidental Registration
(a) Whenever the Company proposes to file a Registration Statement
for
the public offer and sale of the Company's equity securities
(including pursuant
to Section 2.l(a), to the extent required or permitted by Section
2.1(c), but
excluding a Registration Statement for the Company's Initial Public
Offering and
a Registration Statement on Form S-4, S-8 or any similar or
successor form) at
any time and from time to time, it will, prior to such filing, give
written
notice to all Major Investors of its intention to do so, which
notice shall set
forth the manner of distribution of the equity securities to be
offered and sold
pursuant to such Registration Statement. Upon the written request
of a Major
Investor or Major Investors given within thirty (30) days after the
Company
provides such notice, the Company shall use its best commercial
efforts to cause
all Registrable Shares which the Company has been requested by such
Major
Investor or Major Investors to register to be registered under the
Securities
Act to the extent necessary to permit their sale or other
disposition in
accordance with the intended methods of distribution specified in
the Company's
notice to such Major Investor or Major Investors; provided that the
Company
shall have the right to postpone or withdraw any registration
effected pursuant
to this Section 2.2 without obligation to any Major Investor.
(b) If the registration for which the Company gives notice pursuant
to
Section 2.2(a) is a registered public offering involving an
underwriting, the
Company shall so advise the Major Investors as a part of their
written notice
made pursuant to Section 2.2(a). In such event,
7
<PAGE>
(i) the right of any Major Investor to include his, her or its
Registrable
Shares in such registration pursuant to Section 2.2 shall be
conditioned upon
such Major Investor's participation in such underwriting on the
terms set forth
herein, and (ii) all Major Investors including Registrable Shares
in such
registration shall enter into an underwriting agreement upon
customary terms
with the underwriter or underwriters selected for the underwriting
by the
Company. If any Major Investor who has requested inclusion of his,
her or its
Registrable Shares in such registration as provided above
disapproves of the
terms of the underwriting, such Major Investor may elect, by
written notice to
the Company, to withdraw his, her or its Registrable Shares from
such
Registration Statement and underwriting. If the managing
underwriter advises the
Company in writing that market factors require a limitation on the
number of
shares to be underwritten, all of the shares held by holders other
than the
Major Investors, including any officers, directors or employees of
the Company,
shall first be excluded from such Registration Statement and
underwriting to the
extent deemed advisable by the managing underwriter, and, if
further reduction
of the number of shares is required, the number of shares that may
be included
in the Registration Statement and underwriting shall be allocated
among all
Major Investors requesting registration in proportion, as nearly as
practicable,
to the respective number of Registrable Shares held by them on the
date the
Company gives the notice specified in Section 2.2(a); provided
that, except for
a Registration Statement for the Company's Initial Public Offering,
the number
of Registrable Shares permitted to be included therein shall in no
event be less
than 25% of the total number of shares of Common Stock included in
such
underwriting. If any Common Stockholder would thus be entitled to
include more
shares than such holder requested to be registered, the excess
shall be
allocated among other requesting Common Stockholders pro rata in
the manner
described in the preceding sentence.
2.3
Aggregation. For purposes of this Section 2, the Affiliates of
any
Common Stockholder that is a partnership, corporation or limited
liability
company, shall be deemed to be a single "Common Stockholder."
2.4
Registration Procedures.
(a) If and whenever the Company is required by the provisions of
this
Agreement to use its best commercial efforts to effect the
registration of any
Registrable Shares under the Securities Act, the Company shall, as
expeditiously
as possible:
(i) prepare and file with the Commission a Registration
Statement
with respect to such Registrable Shares and use its best commercial
efforts to
cause that Registration Statement to become effective as soon as
possible and to
keep the Registration Statement effective for up to twelve (12)
months from the
effective date or such lesser period until all such Registrable
Shares are sold;
provided however, that such twelve-month period shall be extended
for a period
of time equal to the period the Selling Stockholders refrain from
selling any
securities of the Company included in such registration at the
request of an
underwriter of the Company's Common Stock or as required pursuant
to Section
2.4(b) and (c);
(ii) prepare and file with the Commission any amendments and
supplements to the Registration Statement and the Prospectus
included in the
Registration Statement as may be necessary to comply with the
provisions of the
Securities Act (including the anti-fraud provisions thereof);
8
<PAGE>
(iii) furnish to each Selling Stockholder such reasonable
numbers
of copies of the Prospectus, including a preliminary prospectus, in
conformity
with the requirements of the Securities Act, and such other
documents as the
Selling Stockholder may reasonably request in order to facilitate
the public
sale or other disposition of the Registrable Shares owned by such
Selling
Stockholder;
(iv) register or qualify the Registrable Shares covered by the
Registration Statement under the securities or Blue Sky laws of
such states as
the Selling Stockholders shall reasonably request, and do any and
all other acts
and things that may be necessary or desirable to enable the Selling
Stockholders
to consummate the public sale or other disposition in such states
of the
Registrable Shares owned by the Selling Stockholder; provided
however, that the
Company shall not be required in connection with this subsection
(iv) to qualify
as a foreign corporation or execute or file a general consent to
service of
process in any jurisdiction, unless the Company is already subject
to service in
such jurisdiction and except as may be required by the Securities
Act;
(v) cause all such Registrable Shares to be listed on each
securities exchange or automated quotation system on which similar
securities
issued by the Company are then listed;
(vi) provide a transfer agent and registrar for all such
Registrable Shares and a CUSIP number not later than the effective
date of such
Registration Statement;
(vii) make available for inspection by the Selling
Stockholders,
any managing underwriter participating in any disposition pursuant
to such
Registration Statement, and any attorney or accountant or other
agent retained
by any such underwriter or selected as counsel to all the Selling
Stockholders
in connection with their required due diligence examination of the
Company, all
financial and other records, pertinent corporate documents and
properties of the
Company and cause the Company's officers, directors, employees and
independent
accountants to supply all information reasonably requested by any
such Selling
Stockholder, underwriter, attorney, accountant or agent in
connection with such
Registration Statement;
(viii) notify each Selling Stockholder, promptly after it shall
receive notice thereof, of the time when such Registration
Statement has become
effective or a supplement to any Prospectus forming a part of such
Registration
Statement has been filed;
(ix) following the effectiveness of such Registration
Statement,
notify each Selling Stockholder of any request by the Commission
for the
amending or supplementing of such Registration Statement or
Prospectus;
(x) notify each Selling Stockholder of Registrable Shares
covered
by such Registration Statement upon the occurrence of any event as
a result of
which the Prospectus included in a Registration Statement, as then
in effect,
contains an untrue statement of material fact or omits to state a
material fact
required to be stated therein or necessary to make the statements
therein not
misleading in light of the circumstances then existing, and
prepare, file and
furnish to each such Selling Stockholder a reasonable number of
copies of a
supplement or
9
<PAGE>
an amendment to such Prospectus as may be necessary so that such
Prospectus does
not contain an untrue statement of material fact or omit to state a
material
fact required to be stated therein or necessary to make the
statements therein
not misleading in light of the circumstances then existing;
(xi) use its best commercial efforts to prevent the issuance of
any stop order or other order suspending the effectiveness of a
Registration
Statement covering Registrable Shares and, if such an order is
issued, to obtain
the withdrawal thereof at the earliest possible time and to notify
the Selling
Stockholders of the issuance of such order and the resolution
thereof; and
(xii) at the request of any Selling Stockholder at any time
after
any Registrable Shares held by such Selling Stockholder become
eligible for
resale pursuant to Rule 144(k) under the Securities Act, deliver a
letter to the
Company's transfer agent irrevocably instructing the transfer agent
to remove
any securities law legend from any certificate representing such
Registrable
Shares which have become eligible for sale pursuant to Rule 144(k),
which
instructions shall be irrevocable unless and until such Selling
Stockholder
informs the Company or the Company otherwise reasonably determines
that such
Selling Stockholder is an "affiliate" (as defined in Rule 144 under
the
Securities Act,
(b) If the Company has delivered a Prospectus to the Selling
Stockholders and after having done so the Prospectus is amended to
comply with
the requirements of the Securities Act, the Company shall promptly
notify the
Selling Stockholders and, if requested, the Selling Stockholders
shall
immediately cease making offers of Registrable Shares and return
all
Prospectuses to the Company. The Company shall promptly provide the
Selling
Stockholders with revised Prospectuses and, following receipt of
the revised
Prospectuses, the Selling Stockholders shall be free to resume
making offers of
the Registrable Shares.
(c) In the event that, in the reasonable judgment of the Company,
it
is advisable to suspend use of a Prospectus included in a
Registration Statement
due to pending material developments or other events that have not
yet been
publicly disclosed and as to which the Company believes public
disclosure would
be detrimental to the Company, the Company shall notify all Selling
Stockholders
to such effect, and, upon receipt of such notice, each such Selling
Stockholder
shall immediately discontinue any sales of Registrable Shares
pursuant to such
Registration Statement until such Selling Stockholder has received
copies of a
supplemented or amended Prospectus or until such Selling
Stockholder is advised
in writing by the Company that the then current Prospectus may be
used and has
received copies of any additional or supplemental filings that are
incorporated
or deemed incorporated by reference in such Prospectus.
Notwithstanding anything
to the contrary herein, the Company shall not exercise its rights
under this
Section 2.4(c) to suspend sales of Registrable Shares for a period
in excess of
30 calendar days consecutively or 60 calendar days in the aggregate
in any
365-day period.
2.5
Allocation of Expenses. The Company shall pay all Registration
Expenses
of all registrations under this Agreement; provided however, that
if a
registration under Section 2.1(a) is withdrawn at the request of
the Initiating
Holders holding a majority of the shares requested by such
Initiating Holders to
be so registered and if such Initiating Holders elect not to have
such
10
<PAGE>
registration counted as a registration requested under Section
2.1(a), the
Selling Stockholders shall pay the Registration Expenses of such
registration
pro rata in accordance with the number of their Registrable Shares
included in
such registration; provided further however, that if at the time of
such
withdrawal, the Initiating Holders have either (i) learned
information
concerning the business, properties, assets or condition (financial
or
otherwise) of the Company which is made known to the Selling
Stockholders after
the date on which such registration was requested and such
information is
reasonably likely to have a material adverse effect on the market
for the Common
Stock, or (ii) been informed by the underwriters of such
registration that more
than 25% of the Registrable Shares requested for registration shall
not be
included therein due to market factors, and in either such case the
Initiating
Holders have withdrawn the request with reasonable promptness
following such
disclosure, then the Selling Stockholders shall not be required to
pay the
Registration Expenses and shall retain all of their rights,
including their
demand and incidental registration rights pursuant to Sections 2.1
and 2.2.
2.6
Indemnification and Contribution.
(a) In the event of any registration of any of the Registrable
Shares
under the Securities Act pursuant to this Agreement, the Company
will indemnify
and hold harmless each Selling Stockholder, each underwriter of
such Registrable
Shares, and each other person, if any, who controls such Selling
Stockholder or
underwriter within the meaning of the Securities Act or the
Exchange Act against
any losses, claims, damages or liabilities, joint or several, to
which such
Selling Stockholder, underwriter or controlling person may become
subject under
the Securities Act, the Exchange Act, state securities or Blue Sky
laws or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in
respect thereof) arise out of or are based upon (i) any untrue
statement or
alleged untrue statement of a material fact contained in any
Registration
Statement under which such Registrable Shares were registered under
the
Securities Act, any preliminary prospectus or final prospectus
contained in the
Registration Statement, or any amendment or supplement to such
Registration
Statement, (ii) the omission or alleged omission to state a
material fact
required to be stated therein or necessary to make the statements
therein not
misleading, or (iii) any violation or alleged violation by the
Company of the
Securities Act, the Exchange Act, any state securities law or any
rule or
regulation promulgated under the Securities Act, the Exchange Act
or any state
securities law in connection with the Registration Statement or the
offering
contemplated thereby; and the Company will reimburse such Selling
Stockholder,
underwriter and each such controlling person for any legal or any
other expenses
reasonably incurred by such Selling Stockholder, underwriter or
controlling
person in connection with investigating or defending any such loss,
claim,
damage, liability or action; provided however, that the Company
will not be
liable in any such case to the extent that any such loss, claim,
damage or
liability arises out of or is based upon any untrue statement or
omission made
in such Registration Statement, preliminary prospectus or final
prospectus, or
any such amendment or supplement, in reliance upon and in
conformity with
information relating to such Selling Stockholder, underwriter or
controlling
person that is furnished to the Company, in writing, by or on
behalf of such
Selling Stockholder, underwriter or controlling person specifically
for use in
the preparation thereof.
(b) In the event of any registration of any of the Registrable
Shares
under the Securities Act pursuant to this Agreement, each Selling
Stockholder,
severally and not jointly, will indemnify and hold harmless the
Company, each of
its directors and officers and each
11
<PAGE>
underwriter (if any) and each person, if any, who controls the
Company or any
such underwriter within the meaning of the Securities Act or the
Exchange Act,
against any losses, claims, damages or liabilities, joint or
several, to which
the Company, such directors and officers, underwriter or
controlling person may
become subject under the Securities Act, Exchange Act, state
securities or Blue
Sky laws or otherwise, insofar as such losses, claims, damages or
liabilities
(or actions in respect thereof) arise out of or are based upon (i)
any untrue
statement or alleged untrue statement of a material fact contained
in any
Registration Statement under which such Registrable Shares were
registered under
the Securities Act, any preliminary prospectus or final prospectus
contained in
the Registration Statement, or any amendment or supplement to the
Registration
Statement, or (ii) any omission or alleged omission to state a
material fact
required to be stated therein or necessary to make the statements
therein not
misleading, in each case if and to the extent (and only to the
extent) that the
statement or omission was made solely in reliance upon and in
conformity with
information relating to such Selling Stockholder furnished in
writing to the
Company by or on behalf of such Selling Stockholder specifically
for use in
connection with the preparation of such Registration Statement,
prospectus,
amendment or supplement; provided however, that the obligations of
each such
Selling Stockholder hereunder shall be limited to an amount equal
to the net
proceeds received by such Selling Stockholder from the sale of
Registrable
Shares sold in connection with such registration.
(c) Each Indemnified Party shall give notice to the Indemnifying
Party
promptly after such Indemnified P
