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Exhibit
99.5
REGISTRATION RIGHTS
AGREEMENT
2007 REGISTRATION RIGHTS
AGREEMENT (this “ Agreement ”), dated as of
June 1, 2007, by and WorldSpace, Inc., a Delaware corporation,
with headquarters located at 8515 Georgia Avenue, Silver Springs,
Maryland 20910 (the “ Company ”), and the
undersigned buyers (each, a “ Buyer ”, and
collectively, the “ Buyers ”).
WHEREAS:
A. The Company and the Buyers
are parties to that certain Securities Purchase Agreement, dated as
of December 30, 2004 (the “ Existing Securities
Purchase Agreement ”), pursuant to which, among other
things, the Buyers purchased from the Company (i) convertible
secured notes (the “ Existing Notes ”), which
are convertible into shares of the Company’s Class A
Common Stock, $0.01 par value per share (the “ Common
Stock ”, as converted, the “ Existing Conversion
Shares ”), in accordance with the terms of the Existing
Notes.
B. In connection with the
Amendment, Redemption and Exchange Agreements by and among the
Company and each of the Buyers, dated as of the date hereof (the
“ Amendment Agreements ”), the Company has
agreed, among other things, (i) to amend and restate all of
such Buyer’s Existing Notes for notes in the form attached
thereto as Exhibit B (the “ Notes ”) which shall
be convertible into Common Stock (the “ Conversion
Shares ”) and (ii) to issue to each of the Buyers
warrants (the “ Warrants ”), which will be
exercisable into shares of Common Stock (the “ Warrant
Shares ”).
C. In accordance with the
terms of the Securities Purchase Agreement, the Company has agreed
to provide certain 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.
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:
1. Definitions
.
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. “ 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.
b. “ Closing
Date ” shall have the meaning set forth in the Securities
Purchase Agreement.
c. “ Effective
Date ” means the date the Registration Statement has been
declared effective by the SEC.
d. “ Effectiveness
Deadline ” means the date which is one hundred twenty
(120) calendar days after the Closing Date.
e. “ Filing
Deadline ” means the date which is sixty
(60) calendar days after the Closing Date.
f. “ 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 8 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 8.
g. “ 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.
h. “ 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.
i. “ Registrable
Securities ” means (i) the Warrant Shares issued or
issuable upon exercise of the Warrants and (ii) any share
capital of the Company issued or issuable with respect to the
Warrant Shares or the Warrants as a result of any stock split,
stock dividend, recapitalization, exchange or similar event or
otherwise, without regard to any limitations on exercises of the
Warrants.
j. “ Registration
Statement ” means a registration statement or
registration statements of the Company filed under the 1933 Act
covering the Registrable Securities.
k. “ Required
Holders ” means the holders of at least a majority of the
Registrable Securities.
l. “ Required
Registration Amount ” means 120% of the sum of
(i) the number of Warrant Shares issued and issuable pursuant
to the Warrants as of the trading day immediately preceding the
applicable date of determination all subject to adjustment as
provided in Section 2(e), without regard to any limitations on
exercises of the Warrants.
m. “ Rule 415
” means Rule 415 under the 1933 Act or any successor rule
providing for offering securities on a continuous or delayed
basis.
n. “ SEC ”
means the United States Securities and Exchange
Commission.
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2. Registration
.
a. Mandatory
Registration . The Company shall prepare, and, as soon as
practicable but in no event later than the Filing Deadline, file
with the SEC the Registration Statement on Form S-3 covering the
resale of all of the Registrable Securities. The Registration
Statement prepared pursuant hereto shall register for resale at
least the number of shares of Common Stock equal to the Required
Registration Amount determined as of date the Registration
Statement is initially filed with the SEC. The Registration
Statement shall contain (except if otherwise directed by the
Required Holders) the “ Selling Stockholders ”
and “ Plan of Distribution ” sections in
substantially the form attached hereto as Exhibit B . The
Company shall use its best efforts to have the Registration
Statement declared effective by the SEC as soon as practicable, but
in no event later than the Effectiveness Deadline. By 9:30 am on
the Business Day following the Effective Date, the Company shall
file with the SEC in accordance with Rule 424 under the 1933 Act
the final prospectus to be used in connection with sales pursuant
to such Registration Statement.
b. 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. In no event shall the Company include any securities
other than Registrable Securities on any Registration Statement
without the prior written consent of the Required
Holders.
c. 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 shall reasonably cooperate
with each other in performing the Company’s obligations under
this Agreement.
d. 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 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.
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e. 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 fifteen (15) days
after the necessity therefor arises. The Company shall use its
reasonable 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 exercise of
the Warrants and such calculation shall assume that the Warrants
are then exercisable for shares of Common Stock at the then
prevailing Exercise Price (as defined in the Warrants).
f. 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) 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 or otherwise (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, to
register a sufficient number of shares of Common Stock or to
maintain the listing of the Common Stock) (a “ Maintenance
Failure ”) then, as partial relief for the 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 equal to (A) one-half of a percent (0.5%) of the
aggregate principal amount of such Investor’s Notes relating
to the Registrable Securities included in such Registration
Statement on each of the following dates: (i) the day of a
Filing Failure; (ii) the day of an Effectiveness Failure;
(iii) the initial day of a Maintenance Failure and
(B) one percent (1.0%) of the aggregate principal amount
on each of the following dates: (i) on every thirtieth day
after the day of a Filing Failure and thereafter (pro rated for
periods totaling less than thirty days) until such Filing Failure
is cured; (ii) on every thirtieth day after the day of an
Effectiveness Failure and thereafter (pro rated for periods
totaling less than thirty days) until such Effectiveness Failure is
cured; and (iii) on every thirtieth day after the initial day
of a Maintenance Failure and thereafter (pro rated for periods
totaling less than thirty days) until such Maintenance Failure is
cured. The payments to which a holder shall be entitled pursuant to
this Section 2(f) are referred to herein as “
Registration Delay Payments .”
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Registration Delay Payments
shall be paid on the earlier of (I) the dates set forth above
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.
3. Related Obligations
.
At such time as the Company
is obligated to file a Registration Statement with the SEC pursuant
to Section 2(a), 2(d) 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
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.
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c. The Company shall
(A) permit Legal Counsel and each Investor 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 or any Investor reasonably object.
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 and
each Investor, which consent shall not be unreasonably withheld.
The Company shall furnish to Legal Counsel and each Investor,
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 and each Investor 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.
e. The Company shall use its
reasonable 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
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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 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
reasonable 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 notice of the initiation or threat of any proceeding
for such purpose.
h. If any Investor is
required under applicable securities laws to be described in the
Registration Statement as an underwriter , upon the written request
of any Investor in connection with such Investor’s due
diligence requirements, if any, 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
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to the public other than by
disclosure in violation of this Agreement. 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 shall be deemed to limit the Investors’ ability to
sell Registrable Securities in a manner which is otherwise
consistent with applicable laws and regulations.
i. The Company shall hold in
confidence and not make any disclosure of information concerning an
Investor provided to the Company by such Investor in writing unless
(i) disclosure of such information is necessary to comply with
federal or state securities laws, (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 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.
j. The Company shall use its
reasonable 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 the inclusion for
quotation of all of the Registrable Securities covered by the
Registration Statement on The NASDAQ Global Market or
(iii) if, despite the Company’s reasonable best efforts
to satisfy, the preceding clauses (i) and (ii) the
Company is unsuccessful in satisfying the preceding clauses
(i) and (ii), to secure the inclusion for quotation on The
NASDAQ Global Select Market, The NASDAQ Capital Market or the
American Stock Exchange for such Registrable Securities and,
without limiting the generality of the foregoing, to use its
reasonable best efforts to arrange for at least two market makers
to register with the National Association of Securities Dealers,
Inc. (“ NASD ”) as such with respect to such
Registrable Securities. The Company shall pay all fees and expenses
in connection with satisfying its obligation under this
Section 3(j).
k. The Company shall
cooperate with the Investors who hold Registrable Securities being
offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates (not bearing any
restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case
may be, as the Investors may reasonably request and registered in
such names as the Investors may request.
l. If requested by an
Investor, the Company shall (i) as soon as practicable
incorporate in a prospectus supplement or post-effective amendment
such information as an Investor reasonably requests to be included
therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect
to
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the number of Registrable
Securities being offered or sold, the purchase price being paid
therefor and any other terms of the offering of the Registrable
Securities to be sold in such offering; (ii) as soon as
practicable make all required filings of such prospectus supplement
or post-effective amendment after being notified of the matters to
be incorporated in such prospectus supplement or post-effective
amendment; and (iii) as soon as practicable, supplement or
make amendments to any Registration Statement if reasonably
requested by an Investor holding any Registrable
Securities.
m. The Company shall use its
reasonable best efforts to cause the Registrable Securities covered
by a Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary
to consummate the disposition of such Registrable
Securities.
n. The Company shall make
generally available to its security holders as soon as practical,
but not later than ninety (90) days after the close of the
period covered thereby, an earnings statement (in form complying
with, and in the manner provided by, the provisions of Rule 158
under the 1933 Act) covering a twelve-month period beginning not
later than the first day of the Company’s fiscal quarter next
following the effective date of a Registration
Statement.
o. The Company shall
otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC in connection with any
registration hereunder.
p. Within two
(2) Business Days after a Registration Statement which covers
Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel for the Company to
deliver, to the transfer agent for such Registrable Securities
(with copies to the Investors whose Registrable Securities are
included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the SEC in
the form attached hereto as Exhibit A .
q. Notwithstanding anything
to the contrary herein, at any time after the Effective Date, the
Company may delay the disclosure of material, non-public
information concerning the Company the disclosure of which at the
time is not, in the good faith opinion of the Board of Directors of
the Company and its counsel, in the best interest of the Company
and, in the opinion of counsel to the Company otherwise required (a
“ Grace Period ”); provided, that the Company
shall promptly (i) notify the Investors in writing of the
existence of material, non-public information giving rise to a
Grace Period (provided that in each notice the Company will not
disclose the content of such material, non-public information to
the Investors) and the date on which the Grace Period will begin,
and (ii) notify the Investors in writing of the date on which
the Grace Period ends; and, provided further, that no Grace Period
shall exceed thirty (30) consecutive days and during any three
hundred sixty five (365) day period such Grace Periods shall
not exceed an aggregate of sixty (60) days and the first day
of any Grace Period must be at least five (5) trading days
after the last day of any prior Grace Period (each, an “
Allowable Grace Period ”). For purposes of determining
the length of a Grace Period above, the Grace Period shall begin on
and include the date the Investors receive the notice referred to
in clause (i) and shall end on and include the later of the
date the Investors receive the notice referred to in clause
(ii) and the date referred to in such notice. The provisions
of Section 3(g) hereof shall not
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be applicable during the
period of any Allowable Grace Period. Upon expiration of the Grace
Period, the Company shall again be bound by the first sentence of
Section 3(f) with respect to the information giving rise
thereto unless such material, non-public information is no longer
applicable. Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to deliver unlegended shares of
Common Stock to a transferee of an Investor in accordance with the
terms of the Securities Purchase Agreement in connection
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