EXHIBIT 4.7
Amended and Restated Registration Rights Agreement
Amended and Restated Registration Rights Agreement (the "Agreement"),
dated as of August 22, 2000, among ▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation (the
"Company"), Commonwealth Associates, L.P. ("Commonwealth"), ComVest Capital
Management, LLC ("ComVest") each of the investors identified on Schedule 1
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hereto (as such schedule may be updated from time to time) who is a signatory to
a Subscription Agreement (as such term is defined below) (each an "Investor" and
collectively, the "Investors") and Prime Ventures, LLC ("Prime").
WHEREAS, the Company, Commonwealth and ComVest are parties to a
Registration Rights Agreement dated as of June 23, 2000 (the "Former
Registration Rights Agreement"), pursuant to which the Company granted to
Commonwealth, ComVest and the Investors certain registration rights relating to
the registration for resale of (i) the shares of common stock of the Company,
$0.001 par value per share (the "Common Stock"), issuable to Commonwealth and
ComVest upon exercise of warrants issued by the Company to them in connection
with a bridge loan made on June 23, 2000 (the "Bridge Loan"); (ii) the shares of
Common Stock (the "Preferred Conversion Shares") issuable upon conversion of the
Company's Series D Preferred Stock (the "Preferred Stock") issuable to Investors
in an equity investment (the "Equity Investment") in the Company; and (iii) the
shares of common stock issuable to Commonwealth underlying warrants issuable to
it in connection with acting as placement agent in the Equity Investment.
WHEREAS, on June 30, 2000, the Company and Commonwealth entered into a
Credit Agreement (the "Credit Agreement") that provides for the issuance to
Commonwealth of warrants with the same registration rights and other terms of
the warrants granted to Commonwealth and ComVest in the Bridge Financing;
WHEREAS, pursuant to a letter agreement dated the date hereof between
the Company and Prime (the "Letter Agreement"), the Company is issuing to Prime
and its designee(s) (the "Prime Holders") those certain "Warrants" (as such term
is defined in the Letter Agreement) to purchase Common Stock (the "Prime
Warrants");
WHEREAS, the Company, Commonwealth and ComVest wish to supercede and
replace the Former Registration Rights Agreement with this agreement;
NOW, THEREFORE in consideration of the foregoing and the mutual
promises, representations, warranties and covenants and agreements contained
herein, the Company and each of the Investors hereto, intending to be legally
bound hereby agree as follows:
1. Definitions. The following additional definitions shall apply for
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purposes of this Agreement:
(a) The term "Existing Agreements" means the following outstanding
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registration rights agreements of the Company, each of which provides that the
Company shall not grant registration rights superior to those granted in such
agreements or which provide that the securities to be registered thereby are to
be registered prior to the securities granted registration rights herein: (i)
Amended and Restated Registration Rights Agreement made as of January 29, 1999
by and among the Company, Superior Consultant Holdings Corporation, ▇▇▇▇
▇▇▇▇▇▇▇▇ and Adventist Health System Sunbelt Healthcare Corporation, as
supplemented in the Registration Agreement, dated ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇)
Registration Rights Agreement made as of July 1, 1999 by and among the Company
and America Online, Inc. and (iii) registration rights granted to trade
creditors in connection with the restructuring of their claims.
(b) The term "Bridge Warrants" means those warrants (as they may at
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any time be amended, extended, restated, renewed or modified) issuable to the
Bridge Lenders in connection with the Bridge Loan and the Credit Agreement.
(c) The term "Bridge Warrant Shares" means those shares of Common
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Stock issuable upon exercise of the Bridge Warrants.
(d) The term "Bridge Lenders" means Commonwealth and ComVest,
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collectively.
(e) The term "Agency Warrants" means those warrants (as they may at
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any time be amended, extended, restated, renewed or modified) issuable to
Commonwealth in its capacity as placement agent in the Equity Investment and to
the Prime Holders pursuant to the Letter Agreement.
(f) The term "Agency Warrant Shares" means those shares of Common
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Stock issuable upon exercise of the Agency Warrants.
(g) The term "Holder" means a Bridge Lender, Investor or Prime Holder
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and any transferee or assignee thereof to whom a Bridge Lender, Investor or
Prime Holder assigns its rights under this Agreement and who agrees to become
bound by the provisions of this Agreement in accordance with Section 8 and, as
required to comply with Section 9(n), the parties to the Existing Agreements to
the extent necessary to avoid a breach of either such agreement.
(h) The term "Equity Investment Holder" means (i) an Investor, (ii)
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Commonwealth, insofar as it is a holder of Agency Warrants or Agency Warrant
Shares, (iii) a Prime Holder, or (iv) any transferee or assignee thereof to whom
an Investor, Prime Holder or Commonwealth, with respect to the Agency Warrants
or Agency Warrant Shares, assigns rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with Section 7.
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(i) The term "Bridge Loan Holder" means a Bridge Lender and any
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transferee or assignee thereof to whom a Bridge Lender assigns its rights as a
Bridge Lender under this Agreement and who agrees to become bound by the
provisions of this Agreement in accordance with Section 7.
(j) The term "Person" means an individual, a limited liability
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company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, a government or any department or agency thereof.
(k) The terms "Register," "Registered," and "Registration" refer to a
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registration effected by preparing and filing one or more Registration
Statements, (as defined below) or similar document in compliance with the
Securities Act of 1933, as amended (the "1933 Act"), and Rule 415 thereunder or
any successor rule providing for the offering for resale of securities on a
continuous or delayed basis ("Rule 415"), and the declaration or ordering of
effectiveness of such Registration Statement or document by the United States
Securities and Exchange Commission (the "SEC").
(l) The term "Registrable Securities" means (1) the Bridge Warrant
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Shares issued or issuable upon exercise of the Bridge Warrants and the Agency
Warrant Shares issued or issuable upon exercise of the Agency Warrants, and any
other securities of the Company issuable upon the exercise of any such Warrants;
(2) the Preferred Conversion Shares, and any other securities of the Company,
issued or issuable upon the conversion of the Preferred Stock; and (3) any
shares of capital stock or other securities issued or issuable with respect to
the Bridge Warrant Shares or the Agency Warrant Shares or the Preferred Stock,
the Bridge Warrants or the Agency Warrants, as a result of any stock split,
stock dividend, recapitalization, exchange or similar event or otherwise,
without regard to any limitations on the exercises of the Bridge Warrants, or
the Agency Warrants, or conversion of the Preferred Stock; provided, that any
securities deemed Registrable Securities in accordance herewith shall cease to
be Registrable Securities upon the first to occur of (i) the sale of such
securities pursuant to a Registration Statement, (ii) the sale of such
securities pursuant to Rule 144 promulgated under the 1933 Act, (iii) the date
on which all Warrant Shares and Preferred Conversion Shares owned by a Holder
may be resold in a single 90-day period pursuant to Rule 144 or (iv) the date on
which such securities become available for sale under Rule 144(k), it being
understood that when ascertaining the holding period applicable to any unissued
Warrant Shares for the purpose of determining the availability of Rule 144(k),
such holding period shall be deemed to have commenced when the related Warrant
was acquired so long as the Warrant has a cashless exercise provision.
Registrable Securities shall include only outstanding Bridge Warrant Shares,
Agency Warrant Shares and Preferred Conversion Shares, it being understood that
the Company shall have no obligation to register the initial issuance of any
said shares.
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(m) The term "Registration Statement" means a registration statement
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on Form S-1 or Form S-3 or any similar or successor form then appropriate for or
applicable to the offer and sale of the Registrable Securities and filed under
the 1933 Act.
2. Registration.
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(a) Right to Include Registrable Stock. If the Company proposes to
register any of its securities under the 1933 Act in connection with the public
offering of such securities solely for cash (other than a registration on Form
S-4 or Form S-8, or any successor or similar forms) (the "Offering"), it will
each such time promptly (but not later than 30 days before the anticipated date
of filing such Registration Statement) give written notice to each Holder, it
being understood that the Bridge Lenders will not be entitled to notice or
registration under this Section 2(a) until six months from the close of the
Bridge Financing. Upon the written request of any of the Holders made within 15
days after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such Holders and the
intended method of distribution thereof), the Company will use its reasonable
best efforts to effect the registration under the 1933 Act of all Registrable
Securities which the Company has been requested to register by any of the
Holders in accordance with the intended methods of distribution specified in
such request; provided that (i) if, at any time after giving written notice of
its intention to register any securities and prior to the effective date of the
Registration Statement filed in connection with such registration, the Company
determines for any reason not to proceed with such registration, the Company
may, at its election, give written notice of such determination to the Holders
and, thereupon, will be relieved of its obligation to register any Registrable
Securities in connection with such registration and (ii) in case of a
determination by the Company to delay registration of its securities, the
Company will be permitted to delay the registration of Registrable Securities
for the same period as the delay in registering such other securities; provided,
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however, that the provisions of this Section 2 will not be deemed to limit or
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otherwise restrict the rights of the Holders under Section 3.
(b) Mandatory Registration for the Equity Investment Holders'
Registrable Securities. Notwithstanding the foregoing, the Company shall prepare
and file with the SEC prior to three months from the final closing of the Equity
Investment (the "Filing Deadline"), a Registration Statement or Registration
Statements (as necessary) on Form S-3 covering the resale of all of the
Registrable Securities held by Equity Investment Holders and by the Bridge Loan
Holders. In the event that Form S-3 is unavailable for such a registration, the
Company shall use such other form as is available for such a registration,
subject to the provisions of Section 2(i). The Company shall cause such
Registration Statement to be declared effective by the SEC prior to the date
which is six months following the Filing Deadline (the "Effectiveness
Deadline").
(c) Demand Registrations for Holders of the Bridge Warrant Shares.
Subject to Section 2(e) hereof, if the Company shall receive, at any time after
six months
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from the closing of the Bridge Financing, a written request from the Holders of
at least fifty percent (50%) of the Registrable Securities held by the Bridge
Loan Holders then outstanding that the Company file a registration statement
under the Act, then the Company shall, within 10 days of the receipt by the
Company of such notice, give written notice of such request to all Holders and
shall, subject to the limitations of subsection 2(i) below, effect as soon as
practicable, and in any event shall use its reasonable best efforts to effect
within ninety (90) days of the receipt of such request, the registration under
the Act of all Registrable Securities which the Holders request to be registered
within twenty (20) days of the mailing of such notice by the Company. Pursuant
to this Section, the Company shall register the resale of the Registrable
Securities on Form S-3, if such form is available. In the event that Form S-3 is
unavailable for such a registration, the Company shall use such other form as is
available for such a registration, subject to the provisions of Section 2(i).
(d) If the Bridge Loan Holders initiating the registration request
under Section 2(c) hereof ("Initiating Holders") intend to distribute the
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Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
Section 2(c) and the Company shall include such information in the written
notice referred to in such Section 2(c). The underwriter will be selected by the
Bridge Lenders. In such event, the right of any Holder and any persons having
registration rights under the Existing Agreements to include his Registrable
Securities in such registration shall 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 shall (together with the Company) enter into an underwriting
agreement in customary form with the underwriter or underwriters approved for
such underwriting by a majority in interest of the Initiating Holders.
(e) If the Registrable Securities held by the Bridge Loan Holders
shall have been registered pursuant to Section 2(b) hereof, the Company shall
not be subject to the obligations contained in Section 2(c) hereof. The Company
is obligated to effect only two (2) registrations pursuant to Section 2(c), so
long as each such registration has been ordered effective by the SEC.
(f) Notwithstanding the foregoing, if (i) the Company shall furnish
to Holders requesting a registration statement pursuant to Section 2(c), a
certificate signed by the Company's President stating that in the good faith
judgment of the disinterested members of the Company's Board of Directors (the
"Board"), it would be seriously detrimental to the Company and its stockholders
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for such registration statement to be filed and it is therefore desirable to
defer the filing of such registration statement, the Company shall have the
right to defer taking action with respect to such filing for a period of not
more than ninety (90) days after receipt of the request of the Initiating
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Holders; provided, however, that the Company shall not utilize this right more
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than twice in any twelve (12)-month period or (ii) the Company shall have
determined that it intends to engage in a primary offering of new securities for
the account of the Company raising gross proceeds of at least $20 million to
finance its capital needs ("Primary Financing"), the Company may defer the
filing of such registration statement for up to sixty (60) days in order to
permit the Company to file a registration statement with respect to such Primary
Financing (in respect of which "piggyback" rights shall apply upon the terms and
subject to the conditions of this Agreement), provided that the underwriter or
placement agent in such Primary Financing, as the case may be, has a nationally
recognized reputation.
(g) Priority. If the managing underwriter for a registration (other
than with respect to a Registration Statement filed pursuant to Section 2(b) and
2(c) above) involving an underwritten offering advises the Company that, in its
opinion, the number of securities of the Company (including Registrable
Securities) requested to be included in such registration by the holders thereof
exceeds the number of securities of the Company (the "Sale Number") which can be
sold in an orderly manner in such offering within a price range acceptable to
the Company, the Company will include (i) first, all securities of the Company
that the Company proposes to register for its own account and (ii) second, to
the extent that the number of securities of the Company to be included by the
Company is less than the Sale Number, subject to the Existing Agreements, a
number of the Registrable Securities equal to the number derived by multiplying
(a) the difference between the Sale Number and the securities proposed to be
sold by the Company, and (b) a fraction the numerator of which is the number of
Registrable Securities originally requested to be registered by the Holders and
the denominator of which shall be the aggregate number of all securities
requested to be registered by all holders of the Company's securities (other
than securities being registered by the Company itself). The Company hereby
agrees that it will not hereafter grant registration rights to any other holder
that are more favorable to such holder than the registration rights granted
hereunder, it being understood that the Company has obligations under the
Existing Agreements.
(h) Legal Counsel. Subject to Section 6 hereof, in the case of a
mandatory registration pursuant to Section 2(b), the Investors holding a
majority of the Registrable Securities, and in the case of a demand registration
pursuant to Section 2(c), the Bridge Lenders, shall have the right to select one
legal counsel to review and oversee any offering pursuant to this Section 2
("Legal Counsel"), which shall be Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP or such
other counsel as thereafter designated as set forth in above. The Company shall
reasonably cooperate with Legal Counsel in performing the Company's obligations
under this Agreement.
(i) Ineligibility of 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
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form and (ii) undertake to register the resale of 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.
(j) Effect of Failure to File and Obtain and Maintain Effectiveness
of Registration Statement pursuant to a Mandatory Registration. If (i) a
Registration Statement covering all the Registrable Securities held by an Equity
Investment Holder and required to be filed by the Company pursuant to Section
2(b) of this Agreement is not (A) filed with the SEC on or before the Filing
Deadline or (B) declared effective by the SEC on or before the applicable
Effectiveness Deadline or (ii) on any day after the Registration Statement has
been declared effective by the SEC, sales of all the Registrable Securities
required to be included on such Registration Statement cannot be made pursuant
to the Registration Statement (including, without limitation, because of a
failure to keep the Registration Statement effective, to disclose such
information as is necessary for sales to be made pursuant to the Registration
Statement, to register sufficient shares of Common Stock), then, as the sole
remedy to any Equity Investment Holder by reason of any such delay in or
reduction of its ability to sell the underlying shares of Common Stock, (x) the
exercise price of the Agency Warrants (as set forth therein) and the Conversion
Price relating to the Preferred Stock (as set forth in the Certificate of
Designation for the Preferred Stock) that then constitute Registrable Securities
shall be reduced by 5% for each aggregate 30-day period (or pro rated amounts
thereof for partial 30-day periods) that (i) the Registration Statement is not
(A) filed with the SEC on or before the Filing Deadline or (B) declared
effective by the SEC following the Effectiveness Deadline and (ii) after the
Registration Statement is declared effective by the SEC, such Registration
Statement is not available for the sale of at least all of the Registrable
Securities required to be included in such Registration Statement, (y) the
number of Agency Warrant Shares that constitute Registrable Securities shall be
increased to a number determined by multiplying the number of the Agency Warrant
Shares purchasable immediately prior to the exercise price reduction hereunder
by a fraction, the numerator of which shall be the exercise price per share in
effect prior to the exercise price reduction hereunder and the denominator of
which shall be the exercise price as so reduced, and (z) the number of Preferred
Conversion Shares shall be increased to a number determined by multiplying the
number of such Preferred Conversion Shares issuable upon conversion of the
Preferred Stock immediately prior to the Conversion Price reduction hereunder by
a fraction, the numerator of which shall be the Conversion Price per share in
effect prior to the Conversion Price reduction hereunder and the denominator of
which shall be the Conversion Price as so reduced. The foregoing penalties shall
not be triggered during any period of time when (i) the Placement Agent and the
Subscribers (as such terms are defined in the Agency Agreement) have the right
to designate persons that constitute a majority of the board of directors of the
Company, (ii) a Delay Period (as hereinafter defined) and the seven days
following a Delay Period
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or (iii) the Holder is otherwise able to sell its securities under Rule 144
(with respect to such saleable securities).
(k) Sufficient Number of Shares Registered. In the event the number
of shares available under a Registration Statement filed pursuant to Section
2(b) or 2(c) is insufficient to cover all of the Registrable Securities which
such Registration Statement is required to cover, the Company shall amend the
Registration Statement, or file a new Registration Statement (on the short form
available therefor, if applicable), or both, so as to cover at least 100% of the
Registrable Securities (based on the market price of the Common Stock on the
trading day immediately preceding the date of filing of such amendment or new
Registration Statement), in each case, as soon as reasonably practicable, but in
any event not later than fifteen (15) business days after the necessity therefor
arises. The Company shall 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, with respect to a Registration Statement
filed pursuant to Section 2(b) hereof, the number of shares available under a
Registration Statement shall be deemed "insufficient to cover all of the
Registrable Securities" if the number of Registrable Securities issued or
issuable upon conversion of the Preferred Stock and exercise of the Agency
Warrants covered by such Registration Statement is greater than the number of
shares of Common Stock available for resale under the Registration Statement to
cover shares issued or issuable upon conversion of the Preferred Stock and
exercise of the Agency Warrants. For purposes of the calculation set forth in
the foregoing sentence, any restrictions on the conversion of the Preferred
Stock and the exercise of the Agency Warrants shall be disregarded and such
calculation shall assume that the Preferred Stock is then convertible into
shares of Common Stock at the then prevailing Conversion Price (as defined in
the Company's Certificate of Designation for the Preferred Stock) and the Agency
Warrants are then exercisable for shares of Common Stock at the then prevailing
Warrant Share Price (as defined in the Agency Warrant). With respect to a
Registration Statement filed pursuant to Section 2(c) hereof, the number of
shares available under a Registration Statement shall be deemed "insufficient to
cover all of the Registrable Securities" if the number of Registrable Securities
issued or issuable upon exercise of the Bridge Warrants covered by such
Registration Statement is greater than the number of shares of Common Stock
available for resale under the Registration Statement to cover shares issued or
issuable upon exercise of the Bridge Warrants. For purposes of the calculation
set forth in the foregoing sentence, any restrictions on the exercise of the
Bridge Warrants shall be disregarded and the Bridge Warrants are then
exercisable for shares of Common Stock at the then prevailing Warrant Share
Price (as defined in the Bridge Warrant).
3. Obligations of the Company. Whenever required under this Agreement
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to effect the registration of any Registrable Securities, the Company will, as
expeditiously as commercially practicable, fulfill the following obligations:
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(a) The Company shall promptly prepare and file with the SEC a
Registration Statement with respect to the Registrable Securities (but in no
event later than the Filing Deadline with respect to a Registration Statement to
be filed pursuant to Section 2(b)) and use its reasonable best efforts to cause
such Registration Statement to become effective (but, in the case of
registration pursuant to Section 2(b) hereof, in no event later than the
applicable Effectiveness Deadline). The Company will keep such Registration
Statement effective for 21 months but not, in any event, after such securities
cease being Registrable Securities (the "Registration Period") and subject to
any Delay Periods, as defined below. Any 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
light of the circumstances in which they were made, not misleading.
The Company shall not be required to keep a Registration Statement
effective during any Delay Period. The term "Delay Period" shall mean with
respect to any obligation to keep any Registration Statement usable for resales
pursuant to this Section 3, the period when there exist circumstances relating
to a material pending development, including but not limited to a pending or
contemplated material acquisition or merger or other material transaction or
similar event, which would require disclosure by the Company in such
Registration Statement of material information which the Company determines in
good faith that it has a bona fide business purpose for keeping confidential and
non-public and the non-disclosure of which in such Registration Statement might
cause such Registration Statement to fail to comply with applicable disclosure
requirements. A Delay Period shall commence on and include the date that the
Company gives written notice (a "Delay Notice") to the Holders that it is not
required to cause a Registration Statement to be declared effective or the
prospectus contained in the Registration Statement is no longer usable as a
result of a material pending development and shall end on the date when the
Holders are advised in writing by the Company that the current Delay Period has
terminated (it understood that the Company shall give such notice to all Holders
promptly upon making the determination that the Delay Period has ended);
provided, however, that the Company shall not be entitled to Delay Periods
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having durations that exceed one hundred and eighty (180) days in the aggregate
during any calendar year. Any Delay Period shall extend the period up to which
the Company is obligated to keep a Registration Statement effective set forth in
the previous paragraph by the period of such Delay Period.
(b) The Company shall 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, to its knowledge, be
necessary to comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities 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
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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-K, Form
10-Q or Form 8-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 the 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 the Registration Statement.
(c) The Company shall (1) permit Legal Counsel to review and comment
upon those sections of (i) a Registration Statement relating to the Bridge
Lenders or an Equity Investment Holder a reasonable period prior to its filing
with the SEC, and (ii) all other sections of a Registration Statement and all
amendments and supplements to all Registration Statements, which are applicable
to the Bridge Lenders or an Equity Investment Holder (except for Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
any similar or successor report and registration statements on Form S-8) a
reasonable period prior to their filing with the SEC and (2) not file any
document in a form to which Legal Counsel reasonably objects. The Company shall
not submit a request for acceleration of the effectiveness of a Registration
Statement or any amendment or supplement thereto without the prior approval of
Legal Counsel, which consent shall not be unreasonably withheld. The Company
shall furnish to Legal Counsel, without charge, (i) 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 and all exhibits and (iii)
upon the effectiveness of any Registration Statement, one copy of the prospectus
included in such Registration Statement and all amendments and supplements
thereto. The Company shall reasonably cooperate with Legal Counsel in performing
the Company's obligations pursuant to this Section 3.
(d) The Company shall furnish to each of the Holders such numbers of
copies of a prospectus, including a preliminary prospectus, in conformity with
the requirements of the 1933 Act, and such other documents as it may reasonably
request in order to facilitate the disposition of Registrable Securities owned
by such Holders.
(e) The Company shall use its reasonable best efforts to (i) register
and qualify, unless an exemption from registration and qualification applies,
the Registrable Securities covered by a Registration Statement under all
jurisdiction's securities or "blue sky" laws 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
reasonably necessary to maintain the effectiveness thereof during the
Registration Period, (iii) take such other actions as may
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be reasonably 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 Holder
who holds Registrable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or qualification
of any of the Registrable Securities for sale under the securities or "blue sky"
laws of any jurisdiction in the United States or its receipt of actual notice of
the initiation or threat of any proceeding for such purpose.
(f) As promptly as practicable after becoming aware of such event or
development, the Company shall notify Legal Counsel and each Holder in writing
of the happening of any 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 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 promptly prepare a
supplement or amendment to such Registration Statement to correct such untrue
statement or omission, and deliver copies of such supplement or amendment to
Legal Counsel and each Holder as they may reasonably request. The Company shall
also promptly notify Legal Counsel and each Holder 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, (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, however, if such an order
or suspension is issued, the Company shall obtain the withdrawal of such order
or suspension at the earliest possible moment and to notify Legal Counsel and
each Holder who holds Registrable Securities being sold of the issuance of such
order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.
(h) At the reasonable request of any Holder and at the expense of
such Holder, the Company shall furnish to such Holder, on the date of the
effectiveness of the Registration Statement and thereafter from time to time on
such dates as any of the
-11-
Holders may reasonably request (i) a letter, dated such date, from the Company's
independent certified public accountants in form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering, provided that the Holder provides a due diligence
letter in accordance with SAS 72 and such a letter may otherwise be delivered in
accordance with the then prevailing professional practice, and (ii) an opinion,
dated as of such date, of counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given in
an underwritten public offering, addressed to the Holders.
(i) The Company shall cause all 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. The Company shall pay all fees and expenses in
connection with satisfying its obligation under this Section 3(i).
(j) The Company shall make documents, files, books, records,
officers, directors and employees of the Company reasonably available to any
Holder, Legal Counsel and one firm of accountants or other agents retained by
the Holders and provided the underwriters, if any, shall have agreed to be bound
by the provisions of this Section 3(j), to such underwriters (collectively the
"Inspectors"), and make such other accommodations as are reasonably necessary
for the Inspectors, if any, to perform a due diligence review of the Company;
provided, however, that all such information ("Confidential Information") will
be kept confidential and not utilized by the Inspectors except as contemplated
herein and except as required by law or court order. The term "Confidential
Information" does not include information that (i) is already in possession of
such other party (other than that which is subject to another confidentiality
agreement or fiduciary duty), (ii) becomes generally available to the public, or
(iii) becomes available on a non-confidential basis from a source other than the
Company. Each Holder agrees that it shall, upon learning that disclosure of such
Confidential Information 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 information
deemed confidential.
(k) The Company shall hold in confidence and not make any disclosure
of information concerning any Holder provided to the Company 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, (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement or (v) such Holder consents to the form and content of
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any such disclosure. The Company agrees that it shall, upon learning that
disclosure of such information concerning any Holder is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt written notice to such Holder and allow such Holder, at the Holder's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.
(l) The Company shall cooperate with each of the Holders who hold
Registrable Securities being offered, and to the extent applicable, to
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 Holders may reasonably
request and registered in the names of the transferee thereof, provided that the
Holder certifies that the sale was made in accordance with the plan of
distribution contained in the prospectus and the transferee was delivered a
current prospectus as required under the 1933 Act.
(m) The Company shall provide a transfer agent and registrar of all such
Registrable Securities not later than the effective date of such Registration
Statement.
(n) If requested by any Holder, the Company shall (i) as soon as
practicable incorporate in a prospectus supplement or post-effective amendment
such information as such Holder requests to be included therein relating to the
sale and distribution of Registrable Securities, including, without limitation,
information with respect to 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) supplement or
make amendments to any Registration Statement if reasonably requested by any
Holder of such Registrable Securities.
(o) The Company shall otherwise 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 applicable 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
Holders 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) The Company and each Holder shall provide such opinions,
certifications, indemnifications, and take such other actions, including,
without limitation,
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entering into such agreements (including underwriting agreements), as are
reasonably required and appropriate, to permit the Holders to make a public
offering of the Registrable Securities requested to be registered on customary
terms, in which event the Company's obligations hereunder shall be conditioned
on performance by the Holders of their obligations under such arrangements.
4. Furnish Information. The Company's obligation to cause any
-------------------
Registration Statement to become effective in connection with distribution of
any Registrable Securities pursuant to this Agreement is contingent upon each
Holder, with reasonable promptness, furnishing to the Company such information
regarding itself, the Registrable Securities held by it, and the intended method
of disposition of such securities, as is required pursuant to Regulation S-K
promulgated under the 1933 Act, to effect the registration of the Registrable
Securities.
5. Indemnification. In the event of any registration under this
---------------
Agreement:
(a) The Company will indemnify and hold harmless each Holder and its
officers, directors, partners and affiliates (and their officers, directors and
partners), any underwriter (as defined in the ▇▇▇▇ ▇▇▇) for each Holder and each
person (and its officers, directors, partners and affiliates), if any, who
controls any Holder or underwriter within the meaning of the 1933 Act or the
1934 Act (each a "Company Indemnified Person"), against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the 1933 Act, or 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 or (ii) the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, and the Company will pay to each such Company
Indemnified Person, as incurred, any legal or other expenses reasonably incurred
by or on behalf of him in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this subsection (a) shall 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 shall
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 (1) a Violation which occurs solely as the result
of the written information furnished by any Holder, underwriter or controlling
person seeking indemnification hereunder, as applicable, expressly for inclusion
in the Registration Statement or (2) with respect to any underwriter and
controlling person of such underwriter (and their respective officers and
directors), a
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Violation which results from the fact that there was not sent or given to a
person who bought Registrable Securities, at or prior to the written
confirmation of the sale, a copy of the final prospectus, as then amended or
supplemented, if the Company had previously furnished copies of such prospectus
hereunder and such prospectus corrected the misstatement or omission forming the
basis of the Violation.
(b) Each Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the Registration Statement, each
person, if any, who controls the Company within the meaning of the 1933 Act, any
underwriter and any controlling person of any such underwriter or other holder
(each a "Holder Indemnified Person"), against any losses, claims, damages, or
liabilities (joint or several) to which any of the foregoing persons may become
subject, under the 1933 Act, or the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or action 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 solely as a result of
the written information furnished by each Holder expressly for inclusion in the
applicable Registration Statement; and such Holder will pay, as incurred, any
legal or other expenses reasonably incurred by any Holder Indemnified Person
intended to be indemnified pursuant to this subsection (b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that any Holder's liability pursuant to this subsection (b)
-------- -------
shall be limited to the amount of the net proceeds received by such Holder from
the sale of the Registrable Securities sold by it, and further provided that the
indemnity agreement contained in this subsection (b) does 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 such Holder, which consent shall
not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this Section 5 of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 5, deliver to the indemnifying party a
written notice of the commencement of such action and the indemnifying party
will have the right to participate in, and, to the extent the indemnifying party
so desires, jointly with any other indemnifying party similarly noticed, to
assume the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party (together with all other
indemnified parties which may be represented without conflict by one counsel)
will have the right to retain one separate counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of the 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 the same proceeding. If the
indemnifying party shall fail to defend the action, the indemnified party may
conduct its own defense and shall be entitled to reimbursement for the costs of
such defense. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any
-15-
such action shall not relieve such indemnifying party of any liability to the
indemnified party under this Agreement, except to the extent that the
indemnifying party is actually prejudiced by such failure. The omission so to
deliver written notice to the indemnifying party does not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Agreement. No indemnifying party under this Agreement will enter into any
settlement or consent to any entry of judgment which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to the
indemnified party of a release from all liability in respect of such claim or
litigation.
(d) If the indemnification provided for in this Section 5 is held by a
court of competent jurisdiction to be unavailable to an indemnified party or is
insufficient to indemnify an indemnified party with respect to any loss,
liability, claim, damage, or expense referred to therein, then the indemnifying
party, in lieu of or in addition to, as appropriate, indemnifying such
indemnified party hereunder, will contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party will be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission. The obligation of any Holder to make a contribution
pursuant to this Section 5 (d) shall be limited to the net proceeds received by
such Holder from the sale of the Registrable Securities sold by it, less any
amounts paid pursuant to Section 5(b).
(e) The obligations of the Company and each of the Holders under this
Section 5 will survive the completion of any offering of Registrable Securities
in a Registration Statement under this Agreement, and otherwise.
6. Expenses of Registration. All expenses of the Company incurred in
------------------------
connection with any registration, qualification or compliance pursuant to this
Agreement, including, without limitation, all registration, filing and
qualification fees, printing expenses, fees and disbursements of counsel for the
Company and expenses of any special audits incidental to or required by such
registration, qualification or compliance will be borne by the Company. In
addition, the Company shall reimburse the Holders for the reasonable fees and
disbursements of Legal Counsel in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3 of this Agreement which amount shall
be limited to $15,000.
7. Assignment of Registration Rights. The rights under this Agreement
---------------------------------
shall be automatically assignable by any Holder to any transferee of all or any
portion of
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Registrable Securities if: (i) such Holder agrees in writing with the transferee
or assignee to assign such rights, and a copy of such agreement is furnished to
the Company within a reasonable time after such assignment; (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee, and
(b) the securities with respect to which such registration rights are being
transferred or assigned; (iii) immediately following such transfer or assignment
the further disposition of such securities by the transferee or assignee is
restricted under the 1933 Act and applicable state securities laws; (iv) at or
before the time the Company receives the written notice contemplated by clause
(ii) of this sentence the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein; and (v) such
transfer shall have been made in accordance with the applicable requirements of
the Equity Investment, including, without limitation, applicable lock-up
agreements, if any.
8. Amendments and Consents. The terms of the Agreement may be amended,
-----------------------
modified or waived by agreement of the Corporation, Commonwealth, Prime and the
Committee (as defined in the Subscription Agreement) to the extent they relate
to the Equity Investment Holders and by the Corporation and the Bridge Investors
to the extent they relate to Bridge Loan Holders. All consents to be made by the
Equity Investment Holders pursuant to this Agreement shall be made by
Commonwealth, Prime and the Committee and all consents to be made by the Bridge
Investors pursuant to this Agreement shall be made by the Bridge Investors. Any
amendment, waiver or consent effected in accordance with this Section 8 will be
binding upon each holder of any Registrable Securities then outstanding, each
future holder of all such Registrable Securities, and the Company. No
consideration shall be offered or paid to any Person to amend or consent to a
waiver or modification of any provision of this Agreement or provide consent
unless the same consideration also is offered to all of the parties to this
Agreement. The Company is entitled to rely upon and assume the accuracy and
completeness of the certificate supplied by Commonwealth, Prime and the
Committee affirming that all requisite approvals and authorizations were
obtained before any such amendment, modification, waiver or consent was made.
9. Miscellaneous.
-------------
(a) Further Assurances. The Company and each of the Holders agree to
execute and deliver such other documents or agreements as may reasonably be
necessary or desirable for the implementation of this Agreement and the
consummation of the transactions contemplated hereby.
(b) Owner of Registrable Securities. A Person is deemed to be a
holder of Registrable Securities whenever such Person owns or is deemed to be
owner of record of such Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable
-17-
Securities, the Company shall act upon the basis of instructions, notice or
election received from the registered owner of such Registrable Securities.
(c) Submission to Jurisdiction. The parties hereto hereby irrevocably
submit to the non-exclusive jurisdiction of any federal or state court located
within the Borough of Manhattan, State of New York over any dispute arising out
of or relating to this Agreement or any of the transactions contemplated hereby
and each party hereby irrevocably agrees that all claims in respect of such
dispute or any suit, action or proceeding related thereto may be heard and
determined in such courts. The parties hereby irrevocably waive, to the fullest
extent permitted by applicable law, any objection which they may now or
hereafter have to the laying of venue of any such dispute brought in such court
or any defense of inconvenient forum for the maintenance of such dispute. Each
of the parties hereto agrees that a judgment in any such dispute may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by law.
(d) Consent to Service of Process. Each of the parties hereto hereby
consents to process being served by any party to this Agreement in any suit,
action or proceeding by the mailing of a copy thereof in accordance with the
provisions of Section 10(i) hereof.
(e) Entire Agreement; Amendments and Waivers. This Agreement, the
Agency Warrants, the Certificate of Designation of the Preferred Stock and the
Subscription Agreement represent the entire understanding and agreement among
the parties hereto with respect to the subject matter hereof and can be amended,
supplemented or changed, and any provision hereof can be waived, only by written
instrument making specific reference to this Agreement signed by the parties
hereto. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a further or continuing waiver of
such breach or as a waiver of any other or subsequent breach. No failure on the
part of any party to exercise, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of such right, power or remedy by such party preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
All remedies hereunder are cumulative and are not exclusive of any other
remedies provided by law.
(f) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without giving effect to
the principles of conflict of laws thereunder which would specify the
application of the law of another jurisdiction.
(g) Headings; Interpretive Matters. The section headings of this
Agreement are for reference purposes only and are to be given no effect in the
construction or interpretation of this Agreement. No provision of this Agreement
will be interpreted in favor of, or against, any of the parties hereto by reason
of the extent to
-18-
which any such party or its counsel participated in the drafting thereof or by
reason of the extent to which any such provision is inconsistent with any prior
draft hereof or thereof.
(h) Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed given when delivered
personally, telecopied or mailed by certified mail, return receipt requested, to
the parties at the address or telecopier number indicated in the signature pages
and Schedule I hereof. All notices are effective upon receipt or upon refusal if
properly delivered.
(i) Rule 144 Requirements. The Company covenants that it will file
the reports required to be filed by it under the 1933 Act and the 1934 Act, and
the rules and regulations adopted by the SEC thereunder, provided, however, the
Company may delay any such filing but only pursuant to Rule 12b-25 under the
1934 Act; and it will take such further action as any Holder of Registrable
Securities may reasonably request (including, without limitation, promptly
obtaining and required legal opinions, if any, from Company counsel necessary to
effect the sale of Registrable Securities under Rule 144 (and paying the related
fees and expenses of such counsel), all to the extent required from time to time
to enable such Holder to sell Registrable Securities without registration under
the 1933 Act within the limitation of the exemptions provided by (a) Rule 144
under the Act, as such Rule may be amended from time to time, or (b) any similar
rule or regulation hereafter adopted by the SEC. Upon the request of any Holder
of Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements. In the event of
any breach by the Company of its covenants and obligations hereunder, then, as
the sole relief for damages to any Holder by reason of any delay or inability to
sell the underlying shares of Common Stock (which remedy shall be the exclusive
remedy available at law or in equity) (x) the exercise price of the Bridge
Warrants and Agency Warrants (as set forth in the applicable Warrants) and the
Conversion Price relating to the Preferred Stock (as set forth in the
Certificate of Designation) shall be reduced by 5% for each aggregate 30-day
period (or pro rated amounts thereof for partial 30-day periods) that the Holder
is delayed from selling, or unable to sell, Registrable Securities under Rule
144 due to (i) the Company's failure to promptly provide the requisite legal
opinion as described above or (ii) the Company's failure to comply with the
filing and other requirements under Rule 144 necessary to make such Rule
available to the Holders, (y) the number of Bridge Warrant Shares and Agency
Warrant Shares shall be increased to a number determined by multiplying the
number of applicable Warrant Shares purchasable immediately prior to the
applicable exercise price reduction hereunder by a fraction, the numerator of
which shall be the exercise price per share in effect prior to the applicable
exercise price reduction hereunder and the denominator of which shall be the
exercise price as so reduced, and (z) the number of Preferred Conversion Shares
shall be increased to a number determined by multiplying the number of Preferred
Conversion Shares issuable upon conversion of the Preferred Stock immediately
prior to the applicable Conversion Price reduction hereunder by a fraction, the
numerator of which shall be the Conversion Price per share in effect prior to
the Conversion Price reduction hereunder and the denominator of which shall be
-19-
the Conversion Price as so reduced. The foregoing penalties shall not apply to
any breach by the Company of its covenants and obligations hereunder which (i)
may be occurring for up to 10 days during any 90-day period, (ii) during any
Delay Period or (iii) if such securities are otherwise able to be sold under an
effective registration statement or Rule 144(k). In addition, the foregoing
penalties shall not apply if the Company is subject to the penalties specified
in Section 2(j) hereof.
(j) Severability. If any provision of this Agreement is invalid or
unenforceable, the balance of this Agreement shall remain in effect.
(k) Binding Effect; Assignment. Subject to Section 7, this Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns. Nothing in this Agreement shall
create or be deemed to create any third-party beneficiary rights in any person
not a party to this Agreement except as provided below and in Section 8. Upon
any assignment, the references in this Agreement to any Holder shall also apply
to any such assignee unless the context otherwise requires.
(l) Termination. The obligations of the Company contained in Section
2 hereof shall expire and be of no force and effect on June 23, 2005.
(m) Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
(n) No Inconsistent Agreement; Coordination with Existing Agreements.
The rights granted to the Holders pursuant to this Agreement are not intended
to, and shall not be interpreted to, violate the rights granted under the
Existing Agreements ("Prior Rights"), and should any conflict between the Prior
Rights and the rights hereunder arise, the rights hereunder shall be interpreted
in a manner that does not violate the Prior Rights and therefore, with respect
to the conflicting provision, shall be deemed subordinate to the Prior Rights.
The Company will not hereafter enter into any agreement with respect to its
securities which violates the rights granted to the Holders in this Agreement.
(o) Registration Rights Agreement Superseded. It is expressly agreed
that this Agreement shall supersede in all respects the Former Registration
Rights Agreement without liability to any party thereto.
[The rest of this page has been intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have executed or have caused
this Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first written above.
▇▇▇▇▇▇.▇▇▇, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
Notice address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The foregoing Agreement is
hereby accepted as of the date
first above written:
COMMONWEALTH ASSOCIATES, L.P.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Chief Financial Officer
COMVEST VENTURE PARTNERS, L.P.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Title: Manager
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PRIME VENTURES, LLC
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Title: Chief Executive Officer
-22-
SCHEDULE I
This Schedule I shows the names and addresses of the Investors under the
Registration Rights Agreement.
[NAME OF INVESTOR]
Address for all communications, including written confirmation of such wire
transfers:
[TO BE PROVIDED]
Telecopy No.
Telephone No.
Tax ID #
-23-
EXHIBIT A
Form of Notice of Effectiveness of Registration Statement
[Transfer Agent]
Attn:
Re: ▇▇▇▇▇▇.▇▇▇, Inc.
Ladies and Gentlemen:
We are counsel to ▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation (the "Company"),
and have represented the Company in connection with those certain Subscription
Agreements (the "Subscription Agreements") entered into by and among the Company
and the Investors named therein (collectively, the "Holders") pursuant to which
the Company issued to the Holders shares of its series D preferred stock (the
"Preferred Stock") convertible into shares of the Company's common stock, par
value $0.001 per share (the "Common Stock"). We have also represented the
Company in connection with two warrant agreements entered into by and between
the Company and Commonwealth Associates, L.P. pursuant to which the Company
issued warrants dated June 23, 2000 (the "Filing Warrants") and warrants dated
June __, 2000 (the "Agency Warrants") to purchase shares of the Company's Common
Stock. Pursuant to the above mentioned agreements, the Company also has entered
into a Registration Rights Agreement with the Holders (the "Registration Rights
Agreement") pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined in the Registration Rights
Agreement), including the shares of Common Stock issuable upon conversion of the
Preferred Stock and the shares of Common Stock issuable upon exercise of the
Bridge Warrants and the Agency Warrants, under the Securities Act of 1933, as
amended (the "1933 Act"). In connection with the Company's obligations under the
Registration Rights Agreement, on ____________ ____, the Company filed a
Registration Statement on Form S-3 (File No. 333-_____________) (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") relating to the Registrable Securities which names each of the Holders as
a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [Enter Time of
Effectiveness] on [Enter Date
-24-
of Effectiveness] and we have no knowledge, after telephonic inquiry of a member
of the SEC's staff, that any stop order suspending its effectiveness has been
issued or that any proceedings for that purpose are pending before, or
threatened by, the SEC and the Registrable Securities are available for resale
under the 1933 Act pursuant to the Registration Statement.
Very truly yours,
[Issuer's Counsel]
By:
cc: [List Names of Holders]
-25-
