REGISTRATION RIGHTS
AGREEMENT
REGISTRATION
RIGHTS AGREEMENT (this “ Agreement ”), dated
as of October 27, 2005, by and among Telkonet, Inc., a Utah
corporation, with headquarters located at 20374 Seneca Meadows
Parkway, Germantown, MD 20876 (the “ Company ”),
and the undersigned buyers (each, a “ Buyer ”,
and collectively, the “ Buyers ”).
A. In
connection with the Securities Purchase Agreement by and among the
parties hereto of even date herewith (the “ Securities
Purchase Agreement ”), the Company has agreed, upon the
terms and subject to the conditions set forth in the Securities
Purchase Agreement, to issue and sell to each Buyer
(i) convertible notes of the Company (the “ Notes
”) which will, among other things, be convertible,
amortizable and/or redeemable into shares of the Company’s
common stock, par value $0.001 per share (the “ Common
Stock ”) (as converted, amortized and/or redeemed, the
“ Conversion Shares ”) in accordance with the
terms of the Notes, and (ii) warrants (the “ Initial
Warrants ”) which will be exercisable to purchase
additional shares of Common Stock (as exercised collectively, the
“ Initial Warrant Shares ”).
B. Upon
exercise of the Accelerated Payment Option (as defined in the
Notes), the Company shall issue certain Accelerated Payment Option
Warrants (as defined in the Notes) (the “ Additional
Warrants ,” and collectively with the Initial Warrants,
the “ Warrants ”), which will be exercisable to
purchase additional shares of Common Stock (as exercised
collectively, the “ Additional Warrant Shares ,”
and collectively with the Initial Warrant Shares, the “
Warrant Shares ”).
C. To induce
the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide the registration
rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute
(collectively, the “ 1933 Act ”), and applicable
state securities laws set forth in this Agreement.
NOW,
THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and each of the Buyers hereby agree as
follows:
Capitalized terms
used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement.
As used in this Agreement, the following terms shall have the
following meanings:
a.
“ Additional Effectiveness Deadline ” means the
date which is 90 days after the issuance of any Additional
Warrants, or if there is a full review of the Registration
Statement by the SEC, 120 days after such date.
b.
“ Additional Filing Deadline ” means
30 days after the date on which any Additional Warrants are
issued.
c.
“ Additional Registrable Securities ” means
(i) the Additional Warrant Shares issued or issuable upon
exercise of the Additional Warrants and (ii) any share capital
of the Company issued or issuable with respect to the Additional
Warrant Shares or the Additional Warrants as a result of any stock
split, stock dividend, recapitalization, exchange or similar event
or otherwise, without regard to any limitations on exercise of the
Additional Warrants.
d.
“ Additional Registration Statement ” means a
registration statement or registration statements of the Company
filed under the 1933 Act covering any Additional Registrable
Securities.
e.
“ Additional Required Registration Amount ”
means 130% of the number of Additional Warrant Shares issued and
issuable pursuant to the Additional Warrants as of the trading day
immediately preceding the applicable date of determination, subject
to adjustment as provided in Section 2(e), without regard to
any limitations on exercises of the Additional Warrants.
f.
“ Business Day ” means any day other than
Saturday, Sunday or any other day on which commercial banks in The
City of New York are authorized or required by law to remain
closed.
g.
“ Closing Date ” shall have the meaning set
forth in the Securities Purchase Agreement.
h.
“ Effective Date ” means, with respect to the
Initial Registration Statement or the Additional Registration
Statement, the date such Registration Statement has been declared
effective by the SEC.
i.
“ Effectiveness Deadline ” means the Initial
Effectiveness Deadline (as defined below) and the Additional
Effectiveness Deadline (as defined below), as
applicable.
j.
“ Filing Deadline ” means the Initial Filing
Deadline (as defined below) and the Additional Filing Deadline (as
defined below), as applicable.
k.
“ Initial Effectiveness Deadline ” means the
date which is 90 days after the Initial Closing Date, or if
there is a full review of the Registration Statement by the SEC,
120 days after the Initial Closing Date.
l.
“ Initial Filing Deadline ” means 30 days
after the Initial Closing Date.
m.
“ Initial Registrable Securities ” means
(i) the Conversion Shares issued or issuable upon conversion,
amortization or redemption of the Notes, (ii) the Initial
Warrant Shares issued or issuable upon exercise of the Initial
Warrants and (ii) any share capital of the Company issued or
issuable with respect to the Conversion Shares, the Notes, the
Initial Warrant Shares or the Initial Warrants as a result of any
stock split, stock dividend, recapitalization, exchange or similar
event or otherwise, without regard to any limitations on
conversions, amortizations or redemptions of the Notes or exercises
of the Initial Warrants.
2
n.
“ Initial Required Registration Amount ” means
130% of the number of Conversion Shares issued and issuable
pursuant to the Notes as of the trading day immediately preceding
the applicable date of determination (which amount includes the
number of Initial Warrant Shares issued and issuable pursuant to
the Initial Warrants), subject to adjustment as provided in
Section 2(e), without regard to any limitations on
conversions, amortizations or redemptions of the Notes or exercises
of the Initial Warrants.
o.
“Initial Registration Statement ” means a
registration statement or registration statements of the Company
filed under the 1933 Act covering the Initial Registrable
Securities.
p.
“ Investor ” means a Buyer or any transferee or
assignee thereof to whom a Buyer assigns its rights under this
Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 and any transferee or
assignee thereof to whom a transferee or assignee assigns its
rights under this Agreement and who agrees to become bound by the
provisions of this Agreement in accordance with
Section 9.
q.
“ Person ” means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any
department or agency thereof.
r.
“ register ,” “ registered ,”
and “ registration ” refer to a registration
effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and
pursuant to Rule 415 and the declaration or ordering of
effectiveness of such Registration Statement(s) by the
SEC.
s.
“ Registrable Securities ” means the Initial
Registrable Securities and the Additional Registrable
Securities.
t.
“ Registration Statement ” means a registration
statement or registration statements of the Company filed under the
1933 Act covering the Registrable Securities.
u.
“ Required Holders ” means the holders of at
least a majority of the Registrable Securities.
v.
“ Rule 415 ” means Rule 415 under the
1933 Act or any successor rule providing for offering securities on
a continuous or delayed basis.
w.
“ SEC ” means the United States Securities and
Exchange Commission.
a.
Initial Mandatory Registration . The Company shall prepare,
and, as soon as practicable, but in no event later than the Initial
Filing Deadline, file with the SEC the Initial Registration
Statement on Form S-3 covering the resale of all of the Initial
Registrable Securities. In the event that Form S-3 is unavailable
for such a registration, the Company shall use such other form as
is available for such a registration on another appropriate form
reasonably
3
acceptable to
the Required Holders, subject to the provisions of
Section 2(e). The Initial Registration Statement prepared
pursuant hereto shall register for resale at least the number of
shares of Common Stock equal to the Initial Required Registration
Amount as of the date the Registration Statement is initially filed
with the SEC. The Initial Registration Statement shall contain
(except if otherwise directed by the Required Holders) the “
Selling Shareholders ” and “ Plan of
Distribution ” sections in substantially the form
attached hereto as Exhibit B subject to any changes
necessary to make such sections complete, accurate and not
misleading in all material respects. The Company shall use its best
efforts to have the Initial Registration Statement declared
effective by the SEC as soon as practicable, but in no event later
than the Initial Effectiveness Deadline.
b.
Additional Mandatory Registrations . The Company shall
prepare, and, as soon as practicable but in no event later than the
applicable Additional Filing Deadline, file with the SEC an
Additional Registration Statement on Form S-3 covering the resale
of all of the Additional Registrable Securities not previously
registered on an Additional Registration Statement hereunder. In
the event that Form S-3 is unavailable for such a registration, the
Company shall use such other form as is available for such a
registration on another appropriate form reasonably acceptable to
the Required Holders, subject to the provisions of
Section 2(e). Each Additional Registration Statement prepared
pursuant hereto shall register for resale at least that number of
shares of Common Stock equal to the Additional Required
Registration Amount as to the Additional Registrable Securities not
previously registered hereunder as of the date such Registration
Statement is initially filed with the SEC. Each Additional
Registration Statement shall contain (except if otherwise directed
by the Required Holders) the “ Selling Shareholders
” and “ Plan of Distribution ” sections in
substantially the form attached hereto as Exhibit B . The
Company shall use its best efforts to have each Additional
Registration Statement declared effective by the SEC as soon as
practicable, but in no event later than the applicable Additional
Effectiveness Deadline.
c.
Allocation of Registrable Securities . The initial number of
Registrable Securities included in any Registration Statement and
any increase in the number of Registrable Securities included
therein shall be allocated pro rata among the Investors based on
the number of Registrable Securities held by each Investor at the
time the Registration Statement covering such initial number of
Registrable Securities or increase thereof is declared effective by
the SEC. In the event that an Investor sells or otherwise transfers
any of such Investor’s Registrable Securities, each
transferee shall be allocated a pro rata portion of the then
remaining number of Registrable Securities included in such
Registration Statement for such transferor. Any Shares of Common
Stock included in a Registration Statement and which remain
allocated to any Person which ceases to hold any Registrable
Securities covered by such Registration Statement shall be
allocated to the remaining Investors, pro rata based on the number
of Registrable Securities then held by such Investors which are
covered by such Registration Statement. The Company shall not
include any securities other than Registrable Securities on any
Registration Statement without the prior written consent of the
Required Holders.
d.
Legal Counsel . Subject to Section 5 hereof, the
Required Holders shall have the right to select one legal counsel
to review and oversee any registration pursuant to this
Section 2 (“ Legal Counsel ”), which shall
be Schulte Roth & Zabel LLP or such other counsel as thereafter
designated by the Required Holders. The Company and Legal
Counsel
4
shall
reasonably cooperate with each other in performing the
Company’s obligations under this Agreement.
e.
Ineligibility for Form S-3 . In the event that Form S-3
is not available for the registration of the resale of Registrable
Securities hereunder, the Company shall (i) register the
resale of the Registrable Securities on another appropriate form
reasonably acceptable to the Required Holders and
(ii) undertake to register the Registrable Securities on Form
S-3 as soon as either such form is available, provided that the
Company shall maintain the effectiveness of the Registration
Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been
declared effective by the SEC or the Company is no longer obligated
to maintain a registration statement for the Registrable Securities
pursuant to the terms hereof.
f.
Sufficient Number of Shares Registered . In the event the
number of shares available under a Registration Statement filed
pursuant to Section 2(a) is insufficient to cover all of the
Registrable Securities required to be covered by such Registration
Statement or an Investor’s allocated portion of the
Registrable Securities pursuant to Section 2(b), the Company
shall amend the applicable Registration Statement, or file a new
Registration Statement (on the short form available therefor, if
applicable), or both, so as to cover at least the Required
Registration Amount as of the trading day immediately preceding the
date of the filing of such amendment or new Registration Statement,
in each case, as soon as practicable, but in any event not later
than thirty (30) days after the necessity therefor arises. The
Company shall use its best efforts to cause such amendment and/or
new Registration Statement to become effective as soon as
practicable following the filing thereof. For purposes of the
foregoing provision, the number of shares available under a
Registration Statement shall be deemed “insufficient to cover
all of the Registrable Securities” if at any time the number
of shares of Common Stock available for resale under the
Registration Statement is less than the product determined by
multiplying (i) the Required Registration Amount as of such
time by (ii) 0.90. The calculation set forth in the foregoing
sentence shall be made without regard to any limitations on the
conversion, amortization or redemption of the Notes or the exercise
of the Warrants and such calculation shall assume that the Notes
are then convertible into Shares of Common Stock at the then
prevailing Conversion Rate (as defined in the Notes) and that the
Warrants are then exercisable for Shares of Common Stock at the
then prevailing Exercise Price (as defined in the
Warrants).
g.
Effect of Failure to File and Obtain and Maintain Effectiveness
of Registration Statement . If (i) a Registration
Statement covering all of the Registrable Securities required to be
covered thereby and required to be filed by the Company pursuant to
this Agreement is (A) not filed with the SEC on or before the
respective Filing Deadline (a “ Filing Failure
”) or (B) filed with the SEC but not declared effective
by the SEC on or before the respective Effectiveness Deadline (an
“ Effectiveness Failure ”) or (ii) on any
day after the Effective Date sales of all of the Registrable
Securities required to be included on such Registration Statement
cannot be made (other than during an Allowable Grace Period (as
defined in Section 3(r)) pursuant to such Registration
Statement (including, without limitation, because of a failure to
keep such Registration Statement effective, to disclose such
information as is necessary for sales to be made pursuant to such
Registration Statement or to register a sufficient number of Shares
of Common Stock) (a “ Maintenance Failure ”)
then, as partial relief for the
5
damages to any
holder by reason of any such delay in or reduction of its ability
to sell the underlying Shares of Common Stock (which remedy shall
not be exclusive of any other remedies available at law or in
equity), the Company shall pay to each holder of Registrable
Securities relating to such Registration Statement an amount in
cash, without duplication, equal to one percent (1.0%) of the
aggregate Purchase Price (as such term is defined in the Securities
Purchase Agreement) of such Investor’s Registrable Securities
included in such Registration Statement on each of the following
dates: (i) the day of a Filing Failure and on every thirtieth
day (pro rated for periods totaling less than thirty days) after a
Filing Failure until such Filing Failure is cured; (ii) the
day of an Effectiveness Failure and on every thirtieth day (pro
rated for periods totaling less than thirty days) after an
Effectiveness Failure until such Effectiveness Failure is cured;
and (iii) the initial day of a Maintenance Failure and on
every thirtieth day (pro rated for periods totaling less than
thirty days) after a Maintenance Failure until such Maintenance
Failure is cured. The payments to which a holder shall be entitled
pursuant to this Section 2(g) are referred to herein as “
Registration Delay Payments .” Registration Delay
Payments shall be paid on the day of the Filing Failure,
Effectiveness Failure and the initial day of a Maintenance Failure,
as applicable, and thereafter on the earlier of (I) the
thirtieth day after the event or failure giving rise to the
Registration Delay Payments has occurred and (II) the third
Business Day after the event or failure giving rise to the
Registration Delay Payments is cured. In the event the Company
fails to make Registration Delay Payments in a timely manner, such
Registration Delay Payments shall bear interest at the rate of one
percent (1.0%) per month (prorated for partial months) until paid
in full.
At such time as
the Company is obligated to file a Registration Statement with the
SEC pursuant to Section 2(a), 2(b) or 2(e), the Company will
use its best efforts to effect the registration of the Registrable
Securities in accordance with the intended method of disposition
thereof and, pursuant thereto, the Company shall have the following
obligations:
a.
The Company shall submit to the SEC, within two (2) Business
Days after the Company learns that no review of a particular
Registration Statement will be made by the staff of the SEC or that
the staff has no further comments on a particular Registration
Statement, as the case may be, a request for acceleration of
effectiveness of such Registration Statement to a time and date not
later than 48 hours after the submission of such request. The
Company shall keep each Registration Statement effective pursuant
to Rule 415 at all times until the earlier of (i) the
date as of which the Investors may sell all of the Registrable
Securities covered by such Registration Statement without
restriction pursuant to Rule 144(k) (or any successor thereto)
promulgated under the 1933 Act or (ii) the date on which the
Investors shall have sold all of the Registrable Securities covered
by such Registration Statement (the “ Registration
Period ”). The Company shall ensure that each
Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the
statements therein (in the case of prospectuses, in the light of
the circumstances in which they were made) not
misleading.
b.
The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a
Registration Statement and the
6
prospectus used
in connection with such Registration Statement, which prospectus is
to be filed pursuant to Rule 424 promulgated under the 1933
Act, as may be necessary to keep such Registration Statement
effective at all times during the Registration Period, and, during
such period, comply with the provisions of the 1933 Act with
respect to the disposition of all Registrable Securities of the
Company covered by such Registration Statement until such time as
all of such Registrable Securities shall have been disposed of in
accordance with the intended methods of disposition by the seller
or sellers thereof as set forth in such Registration Statement. In
the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the
Company filing a report on Form 10-Q, Form 10-K or any analogous
report under the Securities Exchange Act of 1934, as amended (the
“ 1934 Act ”), the Company shall have
incorporated such report by reference into such Registration
Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the 1934 Act
report is filed which created the requirement for the Company to
amend or supplement such Registration Statement.
c.
The Company shall (A) permit Legal Counsel to review and
comment upon (i) a Registration Statement at least five
(5) Business Days prior to its filing with the SEC and
(ii) all amendments and supplements to all Registration
Statements (except for Annual Reports on Form 10-K, and Reports on
Form 10-Q and any similar or successor reports) within a reasonable
number of days prior to their filing with the SEC, and (B) not
file any Registration Statement or amendment or supplement thereto
in a form to which Legal Counsel reasonably objects. The Company
shall not submit a request for acceleration of the effectiveness of
a Registration Statement or any amendment or supplement thereto
without the prior approval of Legal Counsel, which consent shall
not be unreasonably withheld. The Company shall furnish to Legal
Counsel, without charge, (i) copies of any correspondence from
the SEC or the staff of the SEC to the Company or its
representatives relating to any Registration Statement,
(ii) promptly after the same is prepared and filed with the
SEC, one copy of any Registration Statement and any amendment(s)
thereto, including financial statements and schedules, all
documents incorporated therein by reference, if requested by an
Investor, and all exhibits and (iii) upon the effectiveness of
any Registration Statement, one copy of the prospectus included in
such Registration Statement and all amendments and supplements
thereto. The Company shall reasonably cooperate with Legal Counsel
in performing the Company’s obligations pursuant to this
Section 3.
d.
The Company shall furnish to each Investor whose Registrable
Securities are included in any Registration Statement, without
charge, (i) promptly after the same is prepared and filed with
the SEC, at least one copy of such Registration Statement and any
amendment(s) thereto, including financial statements and schedules,
all documents incorporated therein by reference, if requested by an
Investor, all exhibits and each preliminary prospectus,
(ii) upon the effectiveness of any Registration Statement, ten
(10) copies of the prospectus included in such Registration
Statement and all amendments and supplements thereto (or such other
number of copies as such Investor may reasonably request) and
(iii) such other documents, including copies of any
preliminary or final prospectus, as such Investor may reasonably
request from time to time in order to facilitate the disposition of
the Registrable Securities owned by such Investor.
7
e.
The Company shall use its best efforts to (i) register and
qualify, unless an exemption from registration and qualification
applies, the resale by Investors of the Registrable Securities
covered by a Registration Statement under such other securities or
“blue sky” laws of all applicable jurisdictions in the
United States, (ii) prepare and file in those jurisdictions,
such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof during the
Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and
(iv) take all other actions reasonably necessary or advisable
to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to
(x) qualify to do business in any jurisdiction where it would
not otherwise be required to qualify but for this
Section 3(e), (y) subject itself to general taxation in
any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall
promptly notify Legal Counsel and each Investor who holds
Registrable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under
the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such
purpose.
f.
The Company shall notify Legal Counsel and each Investor in writing
of the happening of any event, as promptly as practicable after
becoming aware of such event, as a result of which the prospectus
included in a Registration Statement, as then in effect, includes
an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading (provided that in no event
shall such notice contain any material, nonpublic information),
and, subject to Section 3(r), promptly prepare a supplement or
amendment to such Registration Statement to correct such untrue
statement or omission, and deliver ten (10) copies of such
supplement or amendment to Legal Counsel and each Investor (or such
other number of copies as Legal Counsel or such Investor may
reasonably request). The Company shall also promptly notify Legal
Counsel and each Investor in writing (i) when a prospectus or
any prospectus supplement or post-effective amendment has been
filed, and when a Registration Statement or any post-effective
amendment has become effective (notification of such effectiveness
shall be delivered to Legal Counsel and each Investor by facsimile
or e-mail on the same day of such effectiveness and by overnight
mail), (ii) of any request by the SEC for amendments or
supplements to a Registration Statement or related prospectus or
related information, and (iii) of the Company’s
reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
g.
The Company shall use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of
any of the Registrable Securities for sale in any jurisdiction and,
if such an order or suspension is issued, to obtain the withdrawal
of such order or suspension at the earliest possible moment and to
notify Legal Counsel and each Investor who holds Registrable
Securities being sold of the issuance of such order and the
resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.
8
h.
To the extent any Investor is deemed, alleged or reasonably
believes may be alleged, to be an underwriter, at the reasonable
request of any Investor, the Company shall furnish to such
Investor, on the date of the effectiveness of the Registration
Statement and thereafter from time to time on such dates as an
Investor may reasonably request (i) a letter, dated such date,
from the Company’s independent certified public accountants
in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten
public offering, addressed to the Investors, and (ii) an
opinion, dated as of such date, of counsel representing the Company
for purposes of such Registration Statement, in form, scope and
substance as is, at the time requested, customarily given by
counsel to an issuer in an underwritten public offering, addressed
to the Investors.
i.
To the extent any Investor is deemed, alleged or reasonably
believes may be alleged, to be an underwriter, the Company shall
make available for inspection by (i) any Investor,
(ii) Legal Counsel and (iii) one firm of accountants or
other agents retained by the Investors (collectively, the “
Inspectors ”), all pertinent financial and other
records, and pertinent corporate documents and properties of the
Company (collectively, the “ Records ”), as
shall be reasonably deemed necessary by each Inspector, and cause
the Company’s officers, directors and employees to supply all
information which any Inspector may reasonably request; provided,
however, that each Inspector shall agree to hold in strict
confidence and shall not make any disclosure (except to an
Investor) or use of any Record or other information which the
Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the
disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement or is
otherwise required under the 1933 Act, (b) the release of such
Records is ordered pursuant to a final, non-appealable subpoena or
order from a court or government body of competent jurisdiction, or
(c) the information in such Records has been made generally
available to the public other than by disclosure in violation of
this or any other agreement of which the Inspector has knowledge.
Each Investor agrees that it shall, upon learning that disclosure
of such Records is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice
to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential. Nothing
herein (or in any other confidentiality agreement between the
Company and any Investor) shall be deemed to limit the
Investors’ ability to sell Registrable Securities in a manner
which is otherwise consistent with applicable laws and
regulations.
j.
The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with
federal or state securities laws or applicable rules and
regulations of Nasdaq or any other relevant market or exchange,
(ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration
Statement, (iii) the release of such information is ordered
pursuant to a subpoena or other final, non-appealable order from a
court or governmental body of competent jurisdiction, or
(iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or
any other agreement. The Company agrees that it shall, upon
learning that disclosure of such information concerning an Investor
is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt written notice to
such
9
Investor and
allow such Investor, at the Investor’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a
protective order for, such information.
k.
The Company shall use its best efforts either to (i) cause all
of the Registrable Securities covered by a Registration Statement
to be listed on each securities exchange on which securities of the
same class or series issued by the Company are then listed, if any,
if the listing of such Registrable Securities is then permitted
under the rules of such exchange, or (ii) secure designation and
quotation of all of the Registrable Securities covered by a
Registration Statement on the American Stock Exchange or
(iii) if, despite the Company’s best efforts to satisfy,
the preceding clauses (i) or (ii) the Company is
unsuccessful in satisfying the preceding clauses (i) or (ii),
to secure the inclusion for quotation on The Nasdaq SmallCap Market
for such Registrable Securities and, w
|
