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EXHIBIT 4.3
BIOVEX GROUP, INC.
STOCKHOLDERS' AGREEMENT
AUGUST 30, 2005
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.
.
TABLE OF CONTENTS
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1. CERTAIN
DEFINITIONS...................................................
1
2. REGISTRATION
RIGHTS...................................................
5
2.1 Required
Registrations...........................................
5
2.2 Incidental
Registration.......................................... 7
2.3 Registration
Procedures.......................................... 8
2.4 Allocation of
Expenses........................................... 10
2.5 Indemnification and
Contribution................................. 10
2.6 Other Matters with Respect to
Underwritten Offerings............. 12
2.7 Information by
Holder............................................ 12
2.8 "Lock-Up" Agreement;
Confidentiality of Notices.................. 13
2.9 Limitations on Subsequent
Registration Rights.................... 13
2.10 Rule 144
Requirements............................................
13
3.
[Reserved]............................................................
14
4. CONSENTS AND
COVENANTS................................................
14
4.1 Matters Requiring Preferred
Majority Consent..................... 14
4.2 Matters Requiring Preferred
Director Consent..................... 15
4.3 Board
Committees.................................................
16
4.4 Directors;
Observers............................................. 16
4.5
Information......................................................
18
4.6 Managers' Restrictive
Covenants.................................. 20
5. TRANSFER PROVISIONS; FIRST OFFER, TAG ALONG AND DRAG ALONG
RIGHTS..... 21
5.1 Restrictions on
Transfer......................................... 21
5.2 Permitted
Transfers..............................................
21
5.3 First
Offer......................................................
22
5.4 Compulsory Transfer by
Leavers................................... 24
5.5 Tag
Along........................................................
25
5.6 Drag
Along.......................................................
26
5.7 Bank Holding Company Act
Matters................................. 27
6. RESTRICTIONS ON SALES OF CONTROL OF THE
COMPANY....................... 28
7. VOTING
AGREEMENTS.....................................................
29
7.1 Voting of
Shares.................................................
29
7.2 No
Revocation....................................................
30
7.3 Obligations Binding on
Transferees............................... 30
8.
GENERAL...............................................................
30
8.1 Future
Stockholders..............................................
30
8.2 Confidentiality and
Disclosure................................... 30
8.3 Actions by Preferred
Holders..................................... 31
8.4 VCT
Matters......................................................
31
8.5
Legends..........................................................
31
8.6
Severability.....................................................
32
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8.7 Governing
Law....................................................
32
8.8
Notices..........................................................
32
8.9 Complete
Agreement...............................................
33
8.10 Amendments
and Waivers........................................... 33
8.11 Termination
Provisions........................................... 33
8.12 Transfers
of Rights; Calculation of Share Numbers................
34
8.13
Pronouns.........................................................
34
8.14
Counterparts; Facsimile Signatures...............................
34
8.15 Section
Headings and References..................................
34
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BIOVEX GROUP, INC.
STOCKHOLDERS' AGREEMENT
This
Stockholders' Agreement, dated as of August 30, 2005, is entered
into
by and among BioVex Group, Inc., a Delaware corporation (the
"COMPANY"); the
holders of the Company's Preferred Stock listed on Exhibit A hereto
(together,
the "PREFERRED HOLDERS"); the Managers (as defined below); and each
other holder
of Common Stock of the Company listed on Exhibit B hereto (the
"COMMON
HOLDERS").
Recitals
WHEREAS, BioVex Limited, a limited company organized under the laws
of
England and Wales (the "SUBSIDIARY"), is currently a wholly owned
subsidiary of
the Company; and
WHEREAS, the Preferred Holders, the Managers and the Common
Holders
previously held shares in the Subsidiary, all of which were
exchanged for shares
in the capital stock of the Company pursuant to a Share
Contribution and
Exchange Agreement dated as of the date hereof (such transaction,
the "SHARE
EXCHANGE"); and
WHEREAS, in their capacity as shareholders of the Subsidiary, the
Preferred
Holders were entitled to certain rights and privileges pursuant to
the Articles
of Association of the Subsidiary (the "ARTICLES"); an Investment
Agreement dated
as of October 3, 2003 (the "INVESTMENT AGREEMENT") by and among the
Subsidiary,
the Managers (as defined therein) and the Preferred Holders, as
holders of
shares in the Subsidiary; a Subscription Agreement dated as of
December 21, 2004
(the "DECEMBER SUBSCRIPTION AGREEMENT") by and among the
Subsidiary, the
Managers (as defined therein) and the Preferred Holders; and a
Subscription
Agreement dated as of May 26, 2005 (the "MAY SUBSCRIPTION
AGREEMENT") by and
among the Subsidiary, the Managers (as defined therein) and the
Preferred
Holders; and
WHEREAS, the Company, the Managers, the Common Holders and the
Preferred
Holders intend that (i) with respect to the Company and in their
capacity as
holders of Preferred Stock of the Company, the Preferred Holders
shall be
entitled to rights and privileges under the Company's Certificate
of
Incorporation and this Agreement that are comparable to those
previously enjoyed
with respect to the Subsidiary and in their capacity as
shareholders of the
Subsidiary under the Articles, the Investment Agreement, the
December
Subscription Agreement and the May Subscription Agreement and (ii)
the Managers
shall be subject to certain restrictive covenants under this
Agreement;
NOW,
THEREFORE, in consideration of the mutual promises and
covenants
contained in this Agreement, the parties hereto agree as
follows:
1.
CERTAIN DEFINITIONS.
As
used in this Agreement, the following terms shall have the
following
respective meanings:
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"AFFILIATED PARTY" means, with respect to any Preferred Holder,
any
person or entity which, directly or indirectly, controls, is
controlled by or is
under common control with such Preferred Holder, including, without
limitation,
any general partner, officer or director of such Preferred Holder
and any
venture capital fund now or hereafter existing which is controlled
by one or
more general partners of, or shares the same management company as,
such
Preferred Holder.
"BOARD" means the Board of Directors of the Company as
constituted
from time to time.
"BUDGET" means the annual budget of the Group from time to time,
as
defined in Section 4.5 (Information).
"CERTIFICATE OF INCORPORATION" means the Certificate of
Incorporation
of the Company, as amended or restated from time to time.
"COMMISSION" means the U.S. Securities and Exchange Commission, or
any
other federal agency at the time administering the Securities
Act.
"COMMON STOCK" means the common stock, $0.0001 par value per share,
of
the Company.
"COMPANY" means BioVex Group, Inc., a Delaware corporation.
"COMPANY SALE" means: (a) a merger or consolidation in which (i)
the
Company is a constituent party, or (ii) a Company Subsidiary is a
constituent
party and the Company issues shares of its capital stock pursuant
to such merger
or consolidation, except in the case of either clause (i) or (ii)
any such
merger or consolidation involving the Company or a Company
Subsidiary in which
the shares of capital stock of the Company outstanding immediately
prior to such
merger or consolidation continue to represent, or are converted
into or
exchanged for shares of capital stock which represent, immediately
following
such merger or consolidation, a majority by voting power of the
capital stock of
(A) the surviving or resulting corporation or (B) if the surviving
or resulting
corporation is a wholly owned subsidiary of another corporation
immediately
following such merger or consolidation, the parent corporation of
such surviving
or resulting corporation; (b) the sale, lease, transfer, exclusive
license or
other disposition, in a single transaction or series of related
transactions, by
the Company or a Company Subsidiary of all or substantially all the
assets of
the Company and the Company Subsidiaries taken as a whole (except
where such
sale, lease, transfer, exclusive license or other disposition is to
a wholly
owned Company Subsidiary); or (c) the sale or transfer, in a single
transaction
or series of related transactions, by the stockholders of the
Company of a
majority by voting power of the then-outstanding capital stock of
the Company to
any person or entity or group of affiliated persons or
entities.
"COMPANY SUBSIDIARY" means any corporation, partnership, trust,
limited liability company or other non-corporate business
enterprise in which
the Company (or another Company Subsidiary) holds stock or other
ownership
interests representing (a) more than 50% of the voting power of all
outstanding
stock or ownership interests of such entity or (b) the right to
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receive more than 50% of the net assets of such entity available
for
distribution to the holders of outstanding stock or ownership
interests upon a
liquidation or dissolution of such entity.
"CONFIDENTIAL INFORMATION" means any information that is labeled
as
confidential, proprietary or secret that a Preferred Holder obtains
from the
Company pursuant to financial statements, reports and other
materials provided
by the Company to such Preferred Holder pursuant to this Agreement
or pursuant
to visitation or inspection rights granted hereunder.
"EXCHANGE ACT" means the U.S. Securities Exchange Act of 1934,
as
amended, or any successor federal statute, and the rules and
regulations of the
Commission issued under such Act, as they each may, from time to
time, be in
effect.
"GROUP" means the Company and the Company Subsidiaries from time
to
time, taken as a whole.
"INDEMNIFIED PARTY" means a party entitled to indemnification
pursuant
to Section 2.5 (Indemnification and Contribution).
"INDEMNIFYING PARTY" means a party obligated to provide
indemnification pursuant to Section 2.5 (Indemnification and
Contribution).
"INITIAL PUBLIC OFFERING" means the initial underwritten public
offering of shares of Common Stock.
"INITIATING HOLDERS" means the Preferred Holders initiating a
request
for registration pursuant to Section 2.1(a) or 2.1(b) (Required
Registrations),
as the case may be.
"MANAGER" means each of Dr. Gareth Beynon, Dr. Robert Coffin,
Philip
Astley-Sparke and Dr. Colin Love.
"MANAGERS' SHARES" means shares of the capital stock of the
Company
owned by the Managers from time to time.
"OTHER HOLDERS" means holders of securities of the Company (other
than
Preferred Holders) who are entitled, by contract with the Company,
to have
securities included in a Registration Statement.
"PREFERRED DIRECTOR" means a member of the Board nominated solely
by
the holders of Preferred Stock pursuant to the Certificate of
Incorporation and
Section 7 (Voting), below.
"PREFERRED MAJORITY" means the holders of at least sixty percent
(60%)
of the Preferred Stock outstanding from time to time (voting
together as a
single class and not as separate series).
"PROSPECTUS" means the prospectus included in any Registration
Statement, as amended or supplemented by an amendment or prospectus
supplement,
including post-effective
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amendments, and all material incorporated by reference or deemed to
be
incorporated by reference in such Prospectus.
"PREFERRED HOLDER" means the holders of Preferred Stock as of the
date
hereof.
"PREFERRED STOCK" means the Series A Stock, the Series B Stock,
the
Series C Stock, the Series D Stock and the Series M Stock.
"REGISTRABLE SHARES" means (a) the shares of Common Stock issued
or
issuable upon conversion of the Preferred Stock; (b) any other
shares of Common
Stock, and any shares of Common Stock issued or issuable upon the
conversion or
exercise of any other securities, acquired by the Preferred
Holders; (c) any
other shares of Common Stock issued in respect of such shares
(because of stock
splits, stock dividends, reclassifications, recapitalizations or
similar
events); and (d) for purposes of Section 2.2 only, the Managers'
Shares;
provided, however, that shares of Common Stock which are
Registrable Shares
shall cease to be Registrable Shares (i) upon any sale pursuant to
a
Registration Statement or Rule 144 under the Securities Act; (ii)
upon any sale
in any manner to a person or entity which is not entitled to the
rights under
this Agreement; or (iii) at such time, following an Initial Public
Offering, as
they become eligible for sale pursuant to Rule 144(k) under the
Securities Act.
Wherever reference is made in this Agreement to a request or
consent of holders
of a certain percentage of Registrable Shares, the determination of
such
percentage shall include shares of Common Stock issuable upon
conversion of the
Preferred Stock even if such conversion has not been effected.
"REGISTRATION EXPENSES" means all expenses incurred by the Company
in
complying with the provisions of Section 2 (Registration Rights),
including,
without limitation, all registration and filing fees, exchange
listing fees,
printing expenses, fees and expenses of counsel for the Company and
the fees and
expenses of one counsel selected by the Selling Stockholders to
represent the
Selling Stockholders, state Blue Sky fees and expenses, and the
expense of any
special audits incident to or required by any such registration,
but excluding
underwriting discounts, selling commissions and the fees and
expenses of Selling
Stockholders' own counsel (other than the counsel selected to
represent all
Selling Stockholders).
"REGISTRATION STATEMENT" means a registration statement filed by
the
Company with the Commission for a public offering and sale of
securities of the
Company (other than a registration statement on Form S-8 or Form
S-4, or their
successors, or any other form for a similar limited purpose, or any
registration
statement covering only securities proposed to be issued in
exchange for
securities or assets of another corporation).
"REMUNERATION COMMITTEE" means the remuneration committee of the
Board
from time to time, as appointed in accordance with Section 4.3
(Remuneration
Committee).
"SECURITIES ACT"
means the U.S. Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the
Commission
issued under such act, as they each may, from time to time, be in
effect.
"SELLING STOCKHOLDER" means any Preferred Holder or Manager
owning
Registrable Shares included in a Registration Statement.
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"SERIES A STOCK" means the Series A Preferred Stock of the
Company,
$0.0001 par value per share; "SERIES B STOCK" means the Series B
Preferred Stock
of the Company, $0.0001 par value per share; "SERIES C STOCK" means
the Series C
Preferred Stock of the Company, $0.0001 par value per share;
"SERIES D STOCK"
means the Series D Preferred Stock of the Company, $0.0001 par
value per share;
and "SERIES M STOCK" means the Series M Preferred Stock of the
Company, $0.0001
par value per share.
"SHARES" means any and all shares of Common Stock and/or shares
of
capital stock of the Company, by whatever name called, that carry
voting rights
(including voting rights which arise by reason of default) and
shall include any
such shares now owned or subsequently acquired by a Stockholder,
however
acquired, including without limitation stock splits and stock
dividends.
"STOCKHOLDER" means a holder of Common Stock or Preferred
Stock.
2.
REGISTRATION RIGHTS.
2.1 Required Registrations.
(a) At any time after six months following the closing of the
Initial Public Offering, a Preferred Holder or Preferred Holders
holding in the
aggregate at least 20% of the Registrable Shares then outstanding
may request,
in writing, that the Company effect the registration on Form S-1 or
Form S-2 (or
any successor form) of Registrable Shares owned by such Preferred
Holder or
Preferred Holders having an aggregate value of at least $7,500,000
(based on the
market price or fair value on the date of such request).
(b) At any time after the Company becomes eligible to file a
Registration Statement on Form S-3 (or any successor form relating
to secondary
offerings), a Preferred Holder or Preferred Holders holding
Registrable Shares
may request, in writing, that the Company effect the registration
on Form S-3
(or such successor form), of Registrable Shares having an aggregate
value of at
least $1,000,000 (based on the public market price on the date of
such request).
(c) Upon receipt of any request for registration pursuant to
this
Section 2, the Company shall promptly give written notice of such
proposed
registration to all other Preferred Holders. Such Preferred Holders
shall have
the right, by giving written notice to the Company within 30 days
after the
Company provides its notice, to elect to have included in such
registration such
of their Registrable Shares as such Preferred Holders may request
in such notice
of election, subject in the case of an underwritten offering to the
terms of
Section 2.1(d). Thereupon, the Company shall, as expeditiously as
possible, and
in any event within 60 days of the receipt of the request from the
Initiating
Holders, file with the Commission a Registration Statement and use
its best
efforts to effect the registration on an appropriate registration
form of all
Registrable Shares which the Company has been requested to so
register;
provided, however, that in the case of a registration requested
under Section
2.1(b), the Company will only be obligated to effect such
registration on Form
S-3 (or any successor form).
(d) If the
Initiating Holders intend to distribute the
Registrable Shares covered by their request by means of an
underwriting, they
shall so advise the Company as a part
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of their request made pursuant to Section 2.1(a) or (b), as the
case may be, and
the Company shall include such information in its written notice
referred to in
Section 2.1(c). In such event, (i) the right of any other Preferred
Holder to
include its Registrable Shares in such registration pursuant to
Section 2.1(a)
or (b), as the case may be, shall be conditioned upon such other
Preferred
Holder's participation in such underwriting on the terms set forth
herein, and
(ii) all Preferred Holders including Registrable Shares in such
registration
shall enter into an underwriting agreement upon customary terms
with the
underwriter or underwriters managing the offering; provided that
such
underwriting agreement shall not provide for indemnification or
contribution
obligations on the part of the Preferred Holders greater than the
obligations of
the Preferred Holders pursuant to Section 2.5 and shall not include
any
representations or warranties of such Preferred Holders other than
with respect
to authority and ownership of shares. The Initiating Holders shall
have the
right to select the managing underwriter(s) for any underwritten
offering
requested pursuant to Section 2.1(a) or (b), subject to the
approval of the
Company, which approval will not be unreasonably withheld,
conditioned or
delayed. If any Preferred Holder who has requested inclusion of its
Registrable
Shares in such registration as provided above disapproves of the
terms of the
underwriting, such Preferred Holder may elect, by written notice to
the Company,
to withdraw its Registrable Shares from such Registration Statement
and
underwriting. If the Company desires that any officers or directors
of the
Company holding securities of the Company be included in any
registration for an
underwritten offering requested pursuant to Section 2.1 or if Other
Holders
request such inclusion, the Company may include the securities of
such officers,
directors and Other Holders in such registration and underwriting
on the terms
set forth herein applicable to the Preferred Holders. If the
managing
underwriter advises the Company in writing that marketing factors
require a
limitation on the number of shares to be underwritten, the shares
held by
officers or directors of the Company and by Other Holders (other
than
Registrable Shares) shall be excluded from such Registration
Statement and
underwriting to the extent deemed advisable by the managing
underwriter, and if
a further reduction of the number of shares is required, the number
of shares
that may be included in such Registration Statement and
underwriting shall be
allocated among all Preferred Holders requesting registration in
proportion, as
nearly as practicable, to the respective number of Registrable
Shares held by
them on the date of the request for registration made by the
Initiating Holders
pursuant to Section 2.1(a) or (b), as the case may be, and
initially requested
to be included therein. If any such Stockholder would thus be
entitled to
include more shares than such Stockholder requested to be
registered, the excess
shall be allocated among other participating Stockholders pro rata
in the manner
described in the preceding sentence. If the managing underwriter
has not limited
the number of Registrable Shares or other securities to be
underwritten, the
Company may include securities for its own account in such
registration if the
managing underwriter so agrees and if the number of Registrable
Shares and other
securities which would otherwise have been included in such
registration and
underwriting will not thereby be limited.
(e) The Company shall not be required to effect more than three
registrations pursuant to Section 2.1(a) or more than two
registrations pursuant
to Section 2.1(b) in any 12 month period. In addition, the Company
shall not be
required to effect any registration within six months after the
effective date
of the Registration Statement relating to the Initial Public
Offering. For
purposes of this Section 2.1(e), a Registration Statement shall not
be counted
until such time as such Registration Statement has been declared
effective by
the Commission and, in the case of a non-underwritten offering, the
shares
requested thereunder
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have been sold pursuant to such Registration Statement (unless the
Initiating
Holders withdraw their request for such registration (other than as
a result of
information concerning the business or financial condition of the
Company which
becomes known to the Preferred Holders after the date on which such
registration
was requested) and elect not to pay the Registration Expenses
therefor pursuant
to Section 2.4). For purposes of this Section 2.1(e), a
Registration Statement
shall not be counted if, as a result of an exercise of the
underwriter's
cut-back provisions, less than 67% of the total number of
Registrable Shares
that Preferred Holders have requested to be included in such
Registration
Statement are so included.
(f) If at the time of any request to register Registrable
Shares
by Initiating Holders pursuant to this Section 2.1, the Company is
engaged or
has plans to engage in a registered public offering or is engaged
in any other
activity which, in the good faith determination of the Company's
Board of
Directors as evidenced by a resolution of the Company's Board of
Directors,
would be materially adversely affected by the requested
registration, then the
Company may at its option direct that such request be delayed for a
period not
in excess of 75 days from the date of such request, such right to
delay a
request to be exercised by the Company not more than once in any
12-month
period.
2.2 Incidental Registration.
(a) Whenever the Company proposes to file a Registration
Statement covering shares of Common Stock (other than a
Registration Statement
filed pursuant to Section 2.1 and a Registration Statement covering
shares to be
sold solely for the account of Other Holders, which shares were
acquired
pursuant to either (i) an acquisition of a company of which they
were formerly
stockholders, (ii) a "private placement" under the Securities Act
or (iii) Rule
144A under the Securities Act) at any time and from time to time,
it will, prior
to such filing, give written notice to all Preferred Holders and
Managers of its
intention to do so. Upon the written request of Preferred Holder(s)
or
Manager(s) given within 20 days after the Company provides such
notice (which
request shall state the intended method of disposition of such
Registrable
Shares), the Company shall use its best efforts to cause all
Registrable Shares
which the Company has been requested by such Preferred Holder(s) or
Manager(s)
to register to be registered under the Securities Act to the extent
necessary to
permit their sale or other disposition in accordance with the
intended methods
of distribution specified in the request of such Preferred
Holder(s) or
Manager(s); provided that the Company shall have the right to
postpone or
withdraw any registration effected pursuant to this Section 2.2
without
obligation to any Preferred Holder or Manager.
(b) If the registration for which the Company gives notice
pursuant to Section 2.2(a) is a registered public offering
involving an
underwriting, the Company shall so advise the Preferred Holders and
Managers as
a part of the written notice given pursuant to Section 2.2(a). In
such event,
(i) the right of any Preferred Holder or Manager to include its
Registrable
Shares in such registration pursuant to this Section 2.2 shall be
conditioned
upon such Preferred Holder's or Manager's participation in such
underwriting on
the terms set forth herein and (ii) all Preferred Holders and
Managers including
Registrable Shares in such registration shall enter into an
underwriting
agreement upon customary terms with the underwriter or underwriters
selected for
the underwriting by the Company. If any Preferred Holder or Manager
who has
requested inclusion of its Registrable Shares in such registration
as
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provided above disapproves of the terms of the underwriting, such
person may
elect, by written notice to the Company, to withdraw its shares
from such
Registration Statement and underwriting. If the managing
underwriter advises the
Company in writing that marketing factors require a limitation on
the number of
shares to be underwritten, the shares held by holders of securities
of the
Company other than Preferred Holders, Managers and Other Holders
shall be
excluded from such Registration Statement and underwriting to the
extent deemed
advisable by the managing underwriter, and, if a further reduction
of the number
of shares is required, the number of shares that may be included in
such
Registration Statement and underwriting shall be allocated first
among all
participating Preferred Holders, then among all participating
Managers, and then
among Other Holders requesting registration in proportion, as
nearly as
practicable, to the respective number of shares of Common Stock (on
an
as-converted basis) held by them on the date the Company gives the
notice
specified in Section 2.2(a) and requested for inclusion therein. If
any
Preferred Holder, Manager or Other Holder would thus be entitled to
include more
shares than such holder requested to be registered, the excess
shall be
allocated among other requesting Preferred Holders, Managers and
Other Holders
pro rata in the manner described in the preceding sentence.
2.3 Registration Procedures.
(a) If and whenever the Company is required by the provisions
of
this Agreement to use its best efforts to effect the registration
of any
Registrable Shares under the Securities Act, the Company shall:
(i) file with the Commission a Registration Statement with
respect to such Registrable Shares and use its best efforts to
cause that
Registration Statement to become effective as soon as possible;
(ii) as expeditiously as possible prepare and file with the
Commission any amendments and supplements to the Registration
Statement and the
prospectus included in the Registration Statement as may be
necessary to comply
with the provisions of the Securities Act (including the anti-fraud
provisions
thereof) and to keep the Registration Statement effective for one
hundred twenty
(120) days from the effective date or such lesser period until all
such
Registrable Shares are sold;
(iii) as expeditiously as possible furnish to each Selling
Stockholder such reasonable numbers of copies of the Prospectus,
including any
preliminary Prospectus, in conformity with the requirements of the
Securities
Act, and such other documents as such Selling Stockholder may
reasonably request
in order to facilitate the public sale or other disposition of the
Registrable
Shares owned by such Selling Stockholder;
(iv) as expeditiously as possible use its best efforts to
register or qualify the Registrable Shares covered by the
Registration Statement
under the securities or Blue Sky laws of such states as the Selling
Stockholders
shall reasonably request, and do any and all other acts and things
that may be
necessary or desirable to enable the Selling Stockholders to
consummate the
public sale or other disposition in such states of the Registrable
Shares owned
by the Selling Stockholders; provided, however, that the Company
shall not be
required in
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connection with this paragraph (iv) to qualify as a foreign
corporation or to
execute a general consent to service of process in any
jurisdiction;
(v) as expeditiously as possible, cause all such Registrable
Shares to be listed on each securities exchange or automated
quotation system on
which similar securities issued by the Company are then listed;
(vi) promptly provide a transfer agent and registrar for all
such Registrable Shares not later than the effective date of such
Registration
Statement;
(vii) promptly make available for inspection by the Selling
Stockholders, any managing underwriter participating in any
disposition pursuant
to such Registration Statement, and any attorney or accountant or
other agent
retained by any such underwriter or selected by the Selling
Stockholders, all
financial and other records, pertinent corporate documents and
properties of the
Company and cause the Company's officers, directors, employees and
independent
accountants to supply all information reasonably requested by any
such seller,
underwriter, attorney, accountant or agent in connection with such
Registration
Statement;
(viii) notify each Selling Stockholder, promptly after it
shall receive notice thereof, of the time when such Registration
Statement has
become effective or a supplement to any Prospectus forming a part
of such
Registration Statement has been filed; and
(ix) as expeditiously as possible following the
effectiveness of such Registration Statement, notify each seller of
such
Registrable Shares of any request by the Commission for the
amending or
supplementing of such Registration Statement or Prospectus.
(b) If the Company has delivered a Prospectus to the Selling
Stockholders and after having done so the Prospectus is amended to
comply with
the requirements of the Securities Act, the Company shall promptly
notify the
Selling Stockholders and, if requested, the Selling Stockholders
shall
immediately cease making offers of Registrable Shares and return
all
Prospectuses to the Company. The Company shall promptly provide the
Selling
Stockholders with revised Prospectuses and, following receipt of
the revised
Prospectuses, the Selling Stockholders shall be free to resume
making offers of
the Registrable Shares.
(c) In the event that, in the judgment of the Company, it is
advisable to suspend use of a Prospectus included in a Registration
Statement
due to pending material developments or other events that have not
yet been
publicly disclosed and as to which the Company believes public
disclosure would
be materially detrimental to the Company as evidenced by a
resolution of the
Company's Board of Directors, the Company shall notify all Selling
Stockholders
to such effect, and, upon receipt of such notice, each such Selling
Stockholder
shall immediately discontinue any sales of Registrable Shares
pursuant to such
Registration Statement until such Selling Stockholder has received
copies of a
supplemented or amended Prospectus or until such Selling
Stockholder is advised
in writing by the Company that the then current Prospectus may be
used and has
received copies of any additional or supplemental filings that are
incorporated
or deemed incorporated by reference in such
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Prospectus. Notwithstanding anything to the contrary herein, the
Company shall
not exercise its rights under this Section 2.3(c) to suspend sales
of
Registrable Shares for a period in excess of 30 days consecutively
or 60 days in
any 365-day period.
2.4 Allocation of Expenses. The Company will pay all
Registration
Expenses for all registrations under this Agreement; provided,
however, that if
a registration under Section 2.1 is withdrawn at the request of the
Initiating
Holders (other than as a result of information concerning the
business or
financial condition of the Company which becomes known to the
Selling
Stockholders after the date on which such registration was
requested) and if the
Initiating Holders elect not to have such registration counted as a
registration
requested under Section 2.1, the Selling Stockholders shall pay the
Registration
Expenses of such registration pro rata in accordance with the
number of their
Registrable Shares included in such registration.
2.5 Indemnification and Contribution.
(a) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, the
Company will
indemnify and hold harmless each Selling Stockholder, each
underwriter of such
Registrable Shares, and each other person, if any, who controls
such Selling
Stockholder or underwriter within the meaning of the Securities Act
or the
Exchange Act against any losses, claims, damages or liabilities,
joint or
several, to which such Selling Stockholder, underwriter or
controlling person
may become subject under the Securities Act, the Exchange Act,
state securities
or Blue Sky laws or otherwise, insofar as such losses, claims,
damages or
liabilities (or actions in respect thereof) arise out of or are
based upon (i)
any untrue statement or alleged untrue statement of any material
fact contained
in any Registration Statement under which such Registrable Shares
were
registered under the Securities Act, any preliminary prospectus or
final
prospectus contained in the Registration Statement, or any
amendment or
supplement to such Registration Statement, (ii) the omission or
alleged omission
to state a material fact required to be stated therein or necessary
to make the
statements therein not misleading, or (iii) any violation or
alleged violation
by the Company of the Securities Act, the Exchange Act, any state
securities law
or any rule or regulation promulgated under the Securities Act, the
Exchange Act
or any state securities law in connection with the Registration
Statement or the
offering contemplated thereby; and the Company will reimburse such
Selling
Stockholder, underwriter and each such controlling person for any
legal or any
other expenses reasonably incurred by such Selling Stockholder,
underwriter or
controlling person in connection with investigating or defending
any such loss,
claim, damage, liability or action; provided, however, that the
Company will not
be liable in any such case to the extent that any such loss, claim,
damage or
liability arises out of or is based upon any untrue statement or
omission made
in such Registration Statement, preliminary prospectus or
prospectus, or any
such amendment or supplement, in reliance upon and in conformity
with
information furnished to the Company, in writing, by or on behalf
of such
Selling Stockholder, underwriter or controlling person specifically
for
inclusion therein.
(b) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, each
Selling
Stockholder, severally and not jointly, will indemnify and hold
harmless the
Company, each of its directors and officers and each underwriter
(if any) and
each person, if any, who controls the Company or any such
underwriter within the
meaning of the Securities Act or the Exchange Act, against any
losses,
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<PAGE>
claims, damages or liabilities, joint or several, to which the
Company, such
directors and officers, underwriter or controlling person may
become subject
under the Securities Act, Exchange Act, state securities or Blue
Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in
respect thereof) arise out of or are based upon (i) any untrue
statement or
alleged untrue statement of a material fact contained in any
Registration
Statement under which such Registrable Shares were registered under
the
Securities Act, any preliminary prospectus or final prospectus
contained in the
Registration Statement, or any amendment or supplement to the
Registration
Statement, or (ii) any omission or alleged omission to state a
material fact
required to be stated therein or necessary to make the statements
therein not
misleading, if and to the extent (and only to the extent) that the
statement or
omission was made in reliance upon and in conformity with
information relating
to such Selling Stockholder furnished in writing to the Company by
such Selling
Stockholder specifically for inclusion in such Registration
Statement,
prospectus, amendment or supplement; provided, however, that the
obligations of
a Selling Stockholder under this Section 2.5 shall be limited to an
amount equal
to the net proceeds actually received by such Selling Stockholder
of Registrable
Shares sold in connection with such registration.
(c) Each Indemnified Party shall give notice to the
Indemnifying
Party promptly after such Indemnified Party has actual knowledge of
any claim as
to which indemnity may be sought, and shall permit the Indemnifying
Party to
assume the defense of any such claim or any litigation resulting
therefrom;
provided, that counsel for the Indemnifying Party, who shall
conduct the defense
of such claim or litigation, shall be approved by the Indemnified
Party (whose
approval shall not be unreasonably withheld, conditioned or
delayed); and,
provided, further, that the failure of any Indemnified Party to
give notice as
provided herein shall not relieve the Indemnifying Party of its
obligations
under this Section 2.5 except to the extent (and only to the
extent) that the
Indemnifying Party is materially prejudiced by such failure. The
Indemnified
Party may participate in such defense at such party's expense;
provided,
however, that the Indemnifying Party shall pay such expense if the
Indemnified
Party reasonably concludes that representation of such Indemnified
Party by the
counsel retained by the Indemnifying Party would be inappropriate
due to actual
or potential differing interests between the Indemnified Party and
any other
party represented by such counsel in such proceeding; provided
further that in
no event shall the Indemnifying Party be required to pay the
expenses of more
than one law firm per jurisdiction as counsel for the Indemnified
Party. The
Indemnifying Party also shall be responsible for the expenses of
such defense if
the Indemnifying Party does not elect to assume such defense. No
Indemnifying
Party, in the defense of any such claim or litigation shall, except
with the
consent of each Indemnified Party, consent to entry of any judgment
or enter
into any settlement which does not include as an unconditional term
thereof the
giving by the claimant or plaintiff to such Indemnified Party of a
release from
all liability in respect of such claim or litigation, which does
not provide for
only money damages or which includes any statement as to the fault
or
culpability of any Indemnified Person. No Indemnified Party shall
consent to
entry of any judgment or settle such claim or litigation without
the prior
written consent of the Indemnifying Party, which consent shall not
be
unreasonably withheld, conditioned or delayed.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this
Section 2.5 is
due in accordance with its terms but for any reason is held to be
unavailable to
an Indemnified Party in respect to
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<PAGE>
any losses, claims, damages and liabilities referred to herein,
then the
Indemnifying Party shall, in lieu of indemnifying such Indemnified
Party,
contribute to the amount paid or payable by such Indemnified Party
as a result
of such losses, claims, damages or liabilities to which such party
may be
subject in such proportion as is appropriate to reflect the
relative fault of
the Company on the one hand and such Selling Stockholder on the
other in
connection with the statements or omissions which resulted in such
losses,
claims, damages or liabilities, as well as any other relevant
equitable
considerations. The relative fault of the Company and such Selling
Stockholder
shall be determined by reference to, whether the untrue or alleged
untrue
statement of material fact related to information supplied by the
Company or
such Selling Stockholder and the parties' relative intent,
knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
The Company and the Selling Stockholders agree that it would not be
just and
equitable if contribution pursuant to this Section 2.5(d) were
determined by pro
rata allocation or by any other method of allocation which does not
take account
of the equitable considerations referred to above. Notwithstanding
the
provisions of this Section 2.5(d), (i) in no case shall any one
Selling
Stockholder be liable or responsible under this Section 2.5 for any
amount in
excess of the net proceeds actually received by such Selling
Stockholder from
such offering of Registrable Shares and (ii) the Company shall be
liable and
responsible for any amount in excess of such proceeds; provided,
however, that
no person guilty of fraudulent misrepresentation (within the
meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from
any person
who was not guilty of such fraudulent misrepresentation. Any party
entitled to
contribution will, promptly after receipt of notice of commencement
of any
action, suit or proceeding against such party in respect of which a
claim for
contribution may be made against another party or parties under
this Section
2.5(d), notify such party or parties from whom contribution may be
sought, but
the omission so to notify such party or parties from whom
contribution may be
sought shall not relieve such party from any other obligation it or
they may
have thereunder or otherwise under this Section 2.5(d). No party
shall be liable
for contribution with respect to any action, suit, proceeding or
claim settled
without its prior written consent, which consent shall not be
unreasonably
withheld, conditioned or delayed.
(e) The rights and obligations of the Company and the Selling
Stockholders under this Section 2.5 shall survive the termination
of this
Agreement.
2.6 Other Matters with Respect to Underwritten Offerings. In the
event
that Registrable Shares are sold pursuant to a Registration
Statement in an
underwritten offering pursuant to Section 2.1, the Company agrees
to (a) enter
into an underwriting agreement containing customary representations
and
warranties with respect to the business and operations of the
Company and
customary covenants and agreements to be performed by the Company,
including
without limitation customary provisions with respect to
indemnification by the
Company of the underwriters of such offering; (b) use its best
efforts to cause
its legal counsel to render customary opinions to the underwriters
with respect
to the Registration Statement; and (c) use its best efforts to
cause its
independent public accounting firm to issue customary "cold comfort
letters" to
the underwriters with respect to the Registration Statement.
2.7 Information by Holder. Each holder of Registrable Shares
included
in any registration shall furnish to the Company such information
regarding such
holder and the distribution proposed by such holder as the Company
may
reasonably request in writing and as
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<PAGE>
shall be required in connection with any registration,
qualification or
compliance referred to in this Agreement.
2.8 "Lock-Up" Agreement; Confidentiality of Notices. Each
Preferred
Holder, Manager and Common Holder, if requested by the Company and
the managing
underwriter of the Initial Public Offering, shall not sell or
otherwise transfer
or dispose of any Registrable Shares or other securities of the
Company
(excluding securities acquired in the Initial Public Offering or in
the public
market after such offering) held by such holder for a period of 180
days
following the effective date of the Registration Statement for the
Initial
Public Offering; provided, that all Stockholders then holding at
least 2% of the
outstanding Common Stock (on an as-converted basis) and all
officers and
directors of the Company enter into similar agreements.
The
Company may impose stop-transfer instructions with respect to
the
Registrable Shares or other securities subject to the foregoing
restriction
until the end of such 180-day period.
Any
holder receiving any written notice from the Company regarding
the
Company's plans to file a Registration Statement shall treat such
notice
confidentially and shall not disclose such information to any
person other than
as necessary to exercise its rights under this Agreement.
2.9 Limitations on Subsequent Registration Rights. The Company
shall
not, prior to the Initial Public Offering, without the prior
written consent of
Preferred Holders holding at least sixty percent (60%) of the
Registrable Shares
then held by all Preferred Holders, enter into any agreement (other
than this
Agreement) with any holder or prospective holder of any securities
of the
Company which grants such holder or prospective holder rights to
include
securities of the Company in any Registration Statement, unless (a)
such rights
to include securities in a registration initiated by the Company or
by Preferred
Holders are not more favorable than the rights granted to Other
Holders under
Sections 2.1 and 2.2, and (b) no rights are granted to initiate a
registration,
other than registration pursuant to a registration statement on
Form S-3 (or its
successor) in which Preferred Holders are entitled to include
Registrable Shares
on a pro rata basis with such holders based on the number of shares
of Common
Stock (on an as-converted basis) owned by Preferred Holders and
such holders.
2.10 Rule 144 Requirements. After the earliest of (i) the closing
of
the sale of securities of the Company pursuant to a Registration
Statement, (ii)
the registration by the Company of a class of securities under
Section 12 of the
Exchange Act, or (iii) the issuance by the Company of an offering
circular
pursuant to Regulation A under the Securities Act, the Company
agrees to:
(a) make and keep current public information about the Company
available, as those terms are understood and defined in Rule
144;
(b) use its best efforts to file with the Commission in a
timely
manner all reports and other documents required of the Company
under the
Securities Act and the Exchange Act (at any time after it has
become subject to
such reporting requirements); and
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<PAGE>
(c) furnish to any holder of Registrable Shares upon request
(i)
a written statement by the Company as to its compliance with the
reporting
requirements of Rule 144 and of the Securities Act and the Exchange
Act (at any
time after it has become subject to such reporting requirements),
(ii) a copy of
the most recent annual or quarterly report of the Company, and
(iii) such other
reports and documents of the Company as such holder may reasonably
request to
avail itself of any similar rule or regulation of the Commission
allowing it to
sell any such securities without registration.
3.
[Reserved]
4.
CONSENTS AND COVENANTS.
4.1 Matters Requiring Preferred Majority Consent. The Company
shall
not, without prior written consent of at least a Preferred
Majority:
(a) amend, alter or repeal any provision of the Certificate of
Incorporation or Bylaws of the Company or the comparable charter
documents of
any direct or indirect subsidiary;
(b) purchase or redeem (or permit any direct or indirect
subsidiary to purchase or redeem) or pay or declare any dividend or
make any
distribution on, any shares of capital stock of the Company or any
direct or
indirect subsidiary thereof other than (A) redemptions of or
dividends or
distributions on the Preferred Stock as expressly authorized
herein, (B)
dividends or other distributions payable on the Common Stock solely
in the form
of additional shares of Common S
