ALEXZA MOLECULAR DELIVERY
CORPORATION
SECOND AMENDED AND RESTATED
INVESTORS’ RIGHTS AGREEMENT
This Second Amended And
Restated Investors’ Rights Agreement (the “
Agreement ”) is made and entered into as of
November 5, 2004 by and among Alexza Molecular Delivery
Corporation , a Delaware corporation (the “
Company ”), the parties listed on the Schedule
attached to this Agreement as Exhibit A and incorporated
herein by reference (the “ Schedule of Holders
”) as investors (the “ Investors
”), and the parties listed on the Schedule of Holders as
holders of Common Stock of the Company and, as provided in
Section 7.14 hereof, supersedes in its entirety that certain
Amended and Restated Investors’ Rights Agreement dated as of
September 17, 2002 by and among the Company and the other
parties thereto (the “ Prior Agreement
”).
The parties hereby
agree as follows, for good and valuable consideration
received:
(a) “
register ,” “ registered
,” and “ registration ” refer to a
registration effected by preparing and filing a registration
statement in compliance with the Securities Act of 1933, as amended
(the “ 1933 Act ”), and the declaration
or ordering of effectiveness of such registration
statement.
(b) “ Registrable
Securities ” means: (i) all the shares of Common
Stock of the Company issued or issuable upon the conversion of any
shares of Series A ,
Series A-1 , Series B ,
Series C or Series D Preferred
Stock of the Company (“ Series A Preferred
,” “ Series A-1 Preferred ,”
“ Series B Preferred , ”
“ Series C Preferred ” and “
Series D Preferred ,” respectively) that
are now owned or may hereafter be acquired by any Investor or any
Investor’s permitted successors and assigns, (ii) all
shares of Common Stock held by Minimum Common Holders (as defined
below), (iii) solely for purposes of Sections 3.1, 3.1
and 3.5 through 3.12, shares of Common Stock issuable upon exercise
of the warrant issued to Montgomery & Co., LLC (the
“Montgomery Warrant”), and (iv) all shares of
Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, all such shares of
Common Stock described in clauses (i), (ii) and (iii) of this
Section 1.1(b), and; excluding in all cases, however, any
Registrable Securities sold by a person in a transaction in which
rights under Section 3 are not assigned in accordance with
this Agreement or any Registrable Securities sold to the public or
sold pursuant to Rule 144 promulgated under the 1933
Act.
(c) “ Registrable
Securities then outstanding ” means the number of
shares of Common Stock which are Registrable Securities and
(i) are then issued and outstanding or
1.
(ii) are
then issuable pursuant to the exercise or conversion of then
outstanding and then exercisable options, warrants or convertible
securities.
(d) “
Holder ” means any person owning of record
Registrable Securities that have not been sold to the public or
pursuant to Rule 144 promulgated under the 1933 Act or any
assignee of record of such Registrable Securities to whom rights
under Section 3 have been duly assigned in accordance with
this Agreement; provided, however, that for purposes of this
Agreement, a record holder of shares of Series A,
Series A-l, Series B, Series C or Series D
Preferred convertible into such Registrable Securities will be
deemed to be the Holder of such Registrable Securities, and
provided, further, that the Company will in no event be obligated
to register shares of Series A, Series A-l,
Series B, Series C or Series D Preferred, and that
Holders of Registrable Securities will not be required to convert
their shares of Series A, Series A-1, Series B,
Series C or Series D Preferred into Common Stock in order to
exercise the registration rights granted hereunder, until
immediately before the closing of the offering to which the
registration relates.
(e) “ Minimum
Common Holder ” means a holder of at least 250,000
shares of Common Stock (as adjusted for stock dividends,
combinations, stock splits and the like) who is a party to this
Agreement.
(f) “
Form S-3 ” means such registration form
under the 1933 Act as is in effect on the date hereof or any
successor registration form under the 1933 Act subsequently adopted
by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company
with the SEC.
(g) “ SEC
” means the U.S. Securities and Exchange
Commission.
(h) “ Conversion
Stock ” means Common Stock issued or issuable upon
the conversion of Series A, Series A-1, Series B,
Series C or Series D Preferred Stock.
(i) “ IPO
” means the consummation of the sale of securities pursuant
to a registration statement filed by the Company under the 1933 Act
in connection with the initial firm commitment underwritten
offering of its securities to the general public.
2.1
Financial Information. The
Company will deliver to each Holder who so requests in writing and
at the time of such request holds at least 500,000 shares of
Series A, Series A-1, Series B, Series C or
Series D Preferred Stock, Common Stock or Conversion Stock
arising from the conversion of Series A, Series A-1,
Series B, Series C or Series D Preferred Stock (as
adjusted for stock dividends, combinations, stock splits and the
like) the following:
(a) Annual Reports. The
Company will furnish to the Holder, as soon as practicable and in
any event within one hundred twenty (120) days after the end
of each fiscal year of the Company, a consolidated Balance Sheet as
of the end of such fiscal year, a consolidated Statement of Income
and a consolidated Statement of Cash Flows of the Company and its
subsidiaries for such year, setting forth in each case in
comparative form the figures from the Company’s previous
fiscal year, all prepared in accordance with generally
accepted
2.
accounting
principles and practices and audited by nationally recognized
independent certified public accountants;
(b) Quarterly Reports.
The Company will furnish to the Holder, as soon as practicable and
in any case within sixty (60) days after the end of each
fiscal quarter of the Company (except the last quarter of the
Company’s fiscal year), quarterly unaudited financial
statements, including an unaudited Balance Sheet, and an unaudited
Statement of Income and an unaudited Statement of Cash
Flows;
(c) Annual Budget. The
Company will furnish to the Holder, as soon as practicable and in
any event no later than thirty (30) days after the close of
each fiscal year of the Company an annual operating plan and
budget, prepared on a monthly basis, for the next immediate fiscal
year. The Company will also promptly furnish to such Holder
amendments to the annual budget, if any.
2.2
Information Meetings. The Company
will hold, not less than twice in each calendar year, a meeting
(the “ Information Meeting ”) at which
all holders of Series A, Series A-1, Series B,
Series C and Series D Preferred Stock may meet, as a group,
with the Company’s Board of Directors (the “
Board ”), as a group, to discuss the status of
the Company and other appropriate matters of mutual interest
concerning the Company. Information meetings will not take place
during meetings of the Board. At least one of the Information
Meetings may be held, at the Company’s election, in
conjunction with the Company’s Annual Meeting of
Stockholders. The Company will send written notice of each
Information Meeting to all holders of Series A,
Series A-1, Series B, Series C and Series D
Preferred Stock at least 30 days in advance of the date fixed
for such meeting.
2.3 Confidentiality. Each
Holder will hold all information received pursuant to
Sections 2.1 and 2.2 in confidence, and will not use or
disclose any of such information to any third party, except
(i) to the extent such information is made publicly available
through no action of the Investors, and (ii) to the extent any
investor which is a partnership or other venture capital fund
desires, according to its policies as in effect from time to time,
to disclose summary or financial information about the Company to
investors in and other partners of such Investor as part of such
Investor’s regular communication process with its investors
and partners, provided that prior to any such disclosure the
Investor will furnish the Company with a copy of information
relating to the Company, which the Investor proposes to so
distribute to its investors and partners, and the Investor and the
Company, discussing in good faith and with commercial
reasonableness, will agree on the final content of any such
disclosure as to the Company to be made by the Investor. Financial
information of the Company will be subject to the confidentiality
obligations of this Section 2.3, but need not be furnished to
the Company or discussed with the Company prior to permitted
disclosure.
2.4
Termination of Certain Rights.
The Company’s obligations under Sections 2.1 and 2.2
hereof will terminate upon the closing of the IPO or an Asset
Transfer or Acquisition (each as defined in
Section 4.7).
2.5
Rule 144A Information. The
Company will provide each Holder without regard to the number of
shares of the Company’s stock held by the Holder, upon
request, with such
3.
written
information as may be required in order to permit such Investor to
resell any shares of the Company’s stock pursuant to
Rule 144A promulgated under the 1933 Act.
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3.
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Registration Rights; Restrictions on Transfer
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3.1
Limitations on Disposition . Each
Holder agrees not to make any disposition of all or any portion of
the Registrable Securities unless and until: (a) there is then
in effect a registration statement under the 1933 Act covering such
proposed disposition and such disposition is made in accordance
with such registration statement; or (b) (i) such Holder has
notified the Company of the proposed disposition and will have
furnished the Company with a statement of the circumstances
surrounding the proposed disposition, and (ii) the Holder
will, have furnished the Company, at the expense of such Holder or
such Holder’s transferee, with an opinion of counsel,
reasonably satisfactory to the Company, that such disposition will
not require registration of such securities under the 1933 Act.
Notwithstanding the provisions of Sections 3.1(a) and
(b) hereof, no such registration statement or opinion of
counsel will be required: (i) for any transfer of any
Registrable Securities in compliance with SEC Rule 144 or
Rule 144A; (ii) for the transfer by gift, will or
intestate succession by the Investor to his or her spouse or lineal
descendants or ancestors or any trust for any of the foregoing; or
(iii) for the transfer to an affiliate, partnership, partner,
retired partner, member, retired member, the estate of any partner
or member or his or her spouse or lineal descendants or any trust
for the benefit of the foregoing of any Holder; (iv) in the
case of Zesiger Capital Group (“ ZCG ”),
for the transfer to any principal, employee or investment advisory
client of ZCG and (v) in the case of an MDS Entity (as defined
below), for the transfer to any transferee which is an MDS Entity;
provided that in each of the foregoing cases the transferee agrees
in writing to be subject to the terms of this Agreement to the same
extent as if the transferee were an original Holder hereunder, and
provided that Holder hereby covenants not to effect such transfer
if such transfer either would invalidate either the securities laws
exemptions pursuant to which the Registrable Securities were
originally offered and sold or would itself require registration
and/or qualification under the Securities Act or applicable state
securities laws. “ MDS Entity ” means any
corporation, trust, partnership, limited liability corporation or
partnership or other form of business entity or legal person which
is an investment fund to which MDS Capital Corp. or any of its
affiliates provides investment management and/or advisory services
(and also means MDS Capital Corp. and its affiliates) and
“MDS Entities” means all of them.
(a) Request by Holders.
If the Company receives at any time after the earlier of:
(i) six (6) months after the effective date of the IPO; or
(ii) November 5, 2009, a written request from the Holders
of Conversion Stock holding at least thirty percent (30%) of the
Registrable Securities held by all Holders of Conversion Stock (the
“ Initiating Holders ”) that the Company
file a registration statement under the 1933 Act covering the
registration of Registrable Securities pursuant to this
Section 3.2, then the Company will, within ten
(10) business days after the receipt of such written request,
give written notice of such request (the “ Request
Notice ”) to all Holders of Conversion Stock, and
effect, as soon as practicable, and, in connection with a
registration that is not an IPO, within ninety (90) days after
receipt of such request, the registration under the 1933 Act of all
Registrable Securities which the Holders request to be registered
and included in such registration, by written notice given by
such
4.
Holders to the
Company within twenty (20) days after receipt of the Request
Notice, subject only to the limitations of this Section 3.2;
provided that the Registrable Securities requested by all Holders
of Conversion Stock to be registered pursuant to such request must
be at least thirty percent (30%) of all Registrable Securities then
outstanding having an aggregate offering price of at least
$5,000,000.00.
(b) Underwriting. If the
Initiating Holders intend to distribute the Registrable Securities
covered by their request by means of an underwriting, then they
will so advise the Company as a part of their request made pursuant
to this Section 3.2 and the Company will include such
information in the Request Notice. In such event, the right of any
Holder to include such Holder’s Registrable Securities in
such registration will be conditioned upon such Holder’s
participation in such underwriting and the inclusion of such
Holder’s Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein.
All Holders proposing to distribute their securities through such
underwriting will enter into an underwriting agreement in customary
form with the managing underwriter or underwriters selected for
such underwriting by the Company and acceptable to a majority in
interest of the Initiating Holders. Notwithstanding any other
provision of this Section 3.2, if the underwriter(s) advise(s)
the Company in writing that marketing factors require a limitation
of the number of securities to be underwritten then the Company
will so advise all Holders of Registrable Securities which would
otherwise be registered and underwritten pursuant hereto, and the
number of Registrable Securities that may be included in the
underwriting will be reduced as required by the underwriter(s) and
allocated among the Holders of Registrable Securities on a pro rata
basis according to the number of Registrable Securities then
outstanding held by each Holder requesting registration (including
the Initiating Holders); provided, however, that the number
of shares of Registrable Securities to be included in the demand
registration will not be reduced unless (i) all other
securities of the Company are first entirely excluded from the
underwriting and registration, and (ii) all Registrable
Securities included in the demand registration pursuant to
Section 3.3 hereof are first entirely excluded from the
underwriting and registration. Any Registrable Securities excluded
and withdrawn from such underwriting will be withdrawn from the
registration.
(c) Maximum Number of Demand
Registrations. The Company is obligated to effect only two (2)
such registrations pursuant to this Section 3.2, subject to
the provisions of Section 3.2(d) hereof with respect to demand
registrations that are withdrawn by the Holders, as described
therein.
(d) Expenses. Subject to
the limitations set forth in Section 3.2(d), all expenses
incurred in connection with the registrations pursuant to this
Section 3.2, including without limitation all registration and
qualification fees, printers’ and accounting fees, fees and
disbursements of counsel for the Company, and the reasonable fees
and disbursements of one counsel for the selling Holders (but
excluding underwriters’ discounts and commissions), will be
borne by the Company. Each Holder participating in such
registrations pursuant to this Section 3.2 will bear such
Holder’s proportionate share based on the total number of
shares sold in such registration by all Holders selling shares in
such registration, of all discounts, commissions or other amounts
payable to underwriters or brokers in connection with such
offering. Notwithstanding the foregoing, the Company will not be
required to pay for any expenses of any registration proceeding
begun pursuant to this Section 3.2 if the
registration
5.
request is
subsequently withdrawn at the request of the Holders of a majority
of the Registrable Securities to be registered, and the Holders who
had requested to sell shares in such withdrawn registration will
pay and reimburse the Company for all of the Company’s costs
and expenses, including without limitation its fees and costs of
its counsel, related to such withdrawn registration unless the
Holders agree to forfeit their right to one demand registration
pursuant to Section 3.2; provided, further, however ,
that if at the time of such withdrawal, the Holders have learned of
a material adverse change in the condition (financial or otherwise)
or business of the Company not known to the Holders at the time of
their request for such registration and have withdrawn their
request for registration with reasonable promptness after learning
of such material adverse change, then the Holders will not be
required to pay any of such expenses and will retain their full
rights pursuant to this Section 3.2.
3.3 Piggyback Registrations.
The Company will notify all Holders of Registrable Securities in
writing at least thirty (30) days prior to filing any
registration statement under the 1933 Act for purposes of effecting
a public offering of securities of the Company (including, but not
limited to, registration statements relating to secondary offerings
of securities of the Company, but excluding any registration under
Section 3.4 of this Agreement or pursuant to any employee
benefit plan or a corporate reorganization) and will afford each
such Holder an opportunity to include in such registration
statement all or any part of the Registrable Securities then held
by such Holder. Each Holder desiring to include in any such
registration statement all or any part of the Registrable
Securities held by such Holder will, within twenty (20) days
after receipt of the above-described notice from the Company, so
notify the Company in writing, and in such notice will inform the
Company of the number of Registrable Securities such Holder wishes
to include in such registration statement. If a Holder decides not
to include all of its Registrable Securities in any registration
statement thereafter filed by the Company, such Holder will
nevertheless continue to have the right to include any Registrable
Securities in any subsequent registration statement or registration
statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth
herein.
(a) Underwriting. If a
registration statement under which the Company gives notice under
this Section 3.3 is for an underwritten offering, then the
Company will so advise the Holders of Registrable Securities. In
such event, the right of any such Holder’s Registrable
Securities to be included in a registration pursuant to this
Section 3.3 will be conditioned upon such Holder’s
participation in such underwriting and the inclusion of such
Holder’s Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their
Registrable Securities through such underwriting will enter into an
underwriting agreement in customary form with the managing
underwriter or underwriter(s) selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the
managing underwriter determine(s) in good faith that marketing
factors require a limitation of the number of shares to be
underwritten, then the managing underwriter(s) may exclude shares
(including Registrable Securities) from the registration and the
underwriting, and the number of shares that may be included in the
registration and the underwriting will be allocated first to the
Company, and second to each of the Holders requesting inclusion of
their Registrable Securities in such registration statement on a
pro rata basis based on the total number of Registrable Securities
then held by each such Holder; provided , however ,
that the right of the underwriters to exclude shares (including
Registrable Securities) from the registration and underwriting as
described above will be restricted so that: (i) the number of
Registrable Securities included in
6.
any such
registration is not reduced below thirty-three and one-third
percent (33.33%) of the shares included in the registration, except
for a registration relating to the IPO, from which all Registrable
Securities may be excluded (provided that no stockholders of the
Company other than those exercising rights under Section 3.2,
if any, are included in the IPO); (ii) all shares that are not
Registrable Securities and are held by persons who are officers or
directors of the Company (or any subsidiary of the Company) will
first be excluded from such registration and underwriting before
any Registrable Securities are so excluded; and
(iii) Registrable Securities held by Minimum Common Holders
will be excluded from registration and underwriting before any
other Registrable Securities. If any Holder disapproves of the
terms of any such underwriting, such Holder may elect to withdraw
therefrom by written notice to the Company and the underwriter,
delivered at least ten (10) business days prior to the
effective date of the registration statement. Any Registrable
Securities excluded or withdrawn from such underwriting, whether by
a Holder or by the underwriter(s), will be excluded and withdrawn
from the registration. For (i) any Holder which is a
partnership or corporation, an affiliate, partner (including,
without limitation, a limited partner) or member of such Holder, or
an entity controlling, controlled by or under common control with
such Holder, (ii) in the case of ZCG, any principal, employee
or investment advisory client of ZCG and (iii) in the case of
an MDS Entity, any MDS Entity, the partners, retired partners and
holders of common stock of such Holder, or the estates and family
members of any such partners and retired partners and any trusts
for the benefit of any of the foregoing persons will be deemed to
be a single “Holder,” and any pro rata reduction with
respect to such “Holder” will be based upon the
aggregate amount of shares carrying registration rights owned by
all entities and individuals included in such “Holder,”
as defined in this sentence.
(b) Expenses. All
expenses incurred in connection with a registration pursuant to
this Section 3.3 (excluding underwriters’ and
brokers’ discounts and commissions), including, without
limitation all federal and “blue sky” registration and
qualification fees, printers’ and accounting fees, fees and
disbursements of counsel for the Company and reasonable fees and
disbursements of one counsel for the selling Holders and Common
Holders, will be borne by the Company.
3.4 Form S-3 Registration. If
the Company receives from any Holder or Holders of at least 30% of
all Registrable Securities then outstanding a written request or
requests that the Company effect a registration on Form S-3 and any
related qualification or compliance with respect to all or a part
of the Registrable Securities owned by such Holder or Holders, then
the Company will:
(a) Notice. Promptly give
written notice of the proposed registration and the Holder’s
or Holders’ request therefor, and any related qualification
or compliance, to all other Holders of Registrable Securities;
and
(b) Registration. As soon
as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such
portion of such Holder’s or Holders’ Registrable
Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other Holder or
Holders joining in such request as are specified in a written
request given within twenty (20) days after receipt of such
written notice from the Company; provided, however,
that
7.
the Company
will not be obligated to effect any such registration,
qualification or compliance pursuant to this Section 3.4 if
any of the following apply:
(i) If Form S-3 is not
available for such offering by the Holders;
(ii) If the Holders,
together with the holders of any other securities of the Company
entitled to inclusion in such registration, propose to sell
Registrable Securities and such other securities (if any) at an
aggregate price to the public of less than
$1,000,000.00;
(iii) If the Company
has, within the twelve (12) month period preceding the date of
such request, already effected two registrations on Form S-3 for
the Holders pursuant to this Section 3.4; or
(iv) In any particular
jurisdiction in which the Company would be required to qualify to
do business or to execute a general consent to service of process
in effecting such registration, qualification or
compliance.
(c) Expenses. Subject to
the foregoing, the Company will file a Form S-3 registration
statement covering the Registrable Securities and other securities
so requested to be registered pursuant to this Section 3.4 as
soon as practicable after receipt of the request or requests of the
Holders for such registration. The Company will pay all expenses
incurred in connection with each registration requested pursuant to
this Section 3.4 (excluding underwriters’ or
brokers’ discounts and commissions), including without
limitation all filing, registration and qualification,
printers’ and accounting fees and the reasonable fees and
disbursements of one counsel for the selling Holder or Holders and
counsel for the Company.
(d) Not Demand
Registration. Form S-3 registrations will not be deemed to
be demand registrations as described in Section 3.2
hereof.
3.5 Obligations of the
Company. Whenever required to effect the registration of any
Registrable Securities under this Agreement, the Company will, as
expeditiously as reasonably possible:
(a) Registration
Statement. Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its
reasonable best efforts to cause such registration statement to
become effective, and, upon the request of the Holders of a
majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to one hundred twenty
(120) days.
(b) Amendments and
Supplements. Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used
in connection with such registration statement as may be necessary
to comply with the provisions of the 1933 Act with respect to the
disposition of all securities covered by such registration
statement.
(c) Copies of Prospectus.
Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the
requirements of the 1933
8.
Act, and such
other documents as they may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by
them that are included in such registration.
(d) Other Securities
Laws. Use its reasonable best efforts to register and qualify
the securities covered by such registration statement under such
other securities or Blue Sky laws of such jurisdictions as will be
reasonably requested by the Holders; provided ,
however , that the Company will not be required in
connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any
such states or jurisdictions in which it is not qualified to do
business or is not subject to service.
(e) Underwriting
Agreement. In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing
underwriter(s) of such offering. Each Holder participating in such
underwriting will also enter into and perform its obligations under
such an agreement.
(f) Update of Prospectus.
Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating
thereto is required to be delivered under the 1933 Act of the
happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
then existing.
(g) Opinion; Comfort
Letter. Furnish, at the request of any Holder requesting
registration of Registrable Securities, on the date that such
Registrable Securities are delivered to the underwriters for sale,
if such securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the date
that the registration statement with respect to such securities
becomes effective, (i) an opinion, dated as of such date, of
the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to
underwriters in an underwritten public offering and reasonably
satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any and (ii) a
“comfort” letter dated as of such date, from the
independent certified public accountants of the Company, in form
and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of
the Holders requesting registration, addressed to the underwriters,
if any.
(h) Listing. Caused all
such Registrable Securities registered hereunder to be listed on
each securities exchange or nationally recognized quotation system
on which similar securities issued by the Company are then
listed.
3.6
Furnish Information. It will be a
condition precedent to the obligations of the Company to take any
action pursuant to Sections 3.2, 3.3 or 3.4 hereof that the
selling Holders, where applicable, furnish to the Company such
information regarding themselves, the Registrable Securities held
by them, and the intended method of disposition of such securities
as will be required to timely effect the registration of their
Registrable Securities.
9.
3.7 Delay of Registration. No
Holder will have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the
result of any controversy that might arise with respect to the
interpretation or implementation of this Section 3.
3.8 Right of Deferral.
Notwithstanding the foregoing, the Company will not be obligated to
file a registration statement pursuant to this
Section 3:
(a) if the Company, within ten
(10) days after its receipt of the request of the Initiating
Holders, gives notice of its bona fide intention to effect the
filing of a registration statement with the SEC within sixty
(60) days of receipt of such request (other than a
registration of securities in a Rule 145 transaction or with
respect to an employee benefit plan), provided that the Company is
actively employing all reasonable efforts to cause such
registration statement to become effective;
(b) within six
(6) months immediately following the effective date of any
registration statement pertaining to the securities of the Company
(other than a registration of securities in a Rule 145
transaction or with respect to an employee benefit plan);
or
(c) if the Company furnishes
to Initiating Holders, a certificate signed by the President or
Chief Executive Officer of the Company stating that in the good
faith judgment of the Board, it would be seriously detrimental to
the Company and its holders of Common Stock for such registration
statement to be filed and it is therefore essential to defer the
filing of such registration statement, then the Company will have
the right to defer such filing for a period of not more than ninety
(90) days after receipt of the request of the Initiating
Holders; provided, however, that the Company may not utilize
this right more than once in any twelve (12) month
period.
3.9
Indemnification. In the event any
Registrable Securities are included in a registration statement
under Sections 3.2, 3.3 or 3.4 hereof:
(a) By the Company. To
the extent permitted by law, the Company will indemnify and hold
harmless each Holder, the partners, members, officers and directors
of each Holder, any underwriter (as defined in the 1933 Act) for
such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the 1933 Act or the Securities
Exchange Act of 1934, as amended, (the “ 1934
Act ”), against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject
under the 1933 Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a
“ Violation ”):
(i) Any untrue statement
or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or
final prospectus contained therein or any amendments or supplements
thereto;
(ii) The omission or
alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not
misleading, or
10.
(iii) Any violation or
alleged violation by the Company of the 1933 Act, the 1934 Act, any
federal or state securities law or any rule or regulation
promulgated under the 1933 Act, the 1934 Act or any federal or
state securities law in connection with the offering covered by
such registration statement;
and the Company
will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses
reasonably incurred by them, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided, however, that the indemnity agreement
contained in this Section 3.9(a) will not apply to amounts
paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the
Company (which consent will not be unreasonably withheld), nor will
the Company be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or
is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in
connection with such registration by such Holder, partner, officer,
director, underwriter or controlling person of such
Holder.
(b) By Selling Holders.
To the extent permitted by law, each selling Holder will indemnify
and hold harmless the Company, each of its directors, each of its
officers who have signed the registration statement, each person,
if any, who controls the Company within the meaning of the 1933
Act, any underwriter and any other Holder selling securities under
such registration statement or any of such other Holder’s
partners, members, directors or officers or any person who controls
such Holder within the meaning of the 1933 Act or the 1934 Act,
against any losses, claims, damages or liabilities (joint or
several) to which the Company or any such director, officer,
controlling person, underwriter or other such Holder, partner or
director, officer or controlling person of such other Holder may
become subject under the 1933 Act, the 1934 Act or other federal or
state law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in
connection with such registration; and each such Holder will
reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person,
underwriter or other Holder, partner, member, officer, director or
controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided, however, that the indemnity agreement
contained in this Section 3.9(b) will not apply to amounts
paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the
Holder, which consent will not be unreasonably withheld; and
provided further, that the total amounts payable in indemnity by a
Holder under this Section 3.9(b) in respect of any Violation
will not exceed the net proceeds received by such Holder in the
registered offering out of which such Violation arises.
(c) Notice. Promptly
after receipt by an indemnified party under this Section 3.9
of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim
i
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