EXHIBIT 4.4
ARTICLE VII
REGISTRATION RIGHTS
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7.1 Certain Definitions. As used in this Article VII, the following
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terms shall have the following respective meanings:
"Holder" means the person who is then the record holder of Registrable
Securities which have not been sold to the public.
"Initiating Holders" means any Purchaser or its assignees who in the
aggregate are holders of at least twenty-five percent (25%) of the sum of,
without duplication, (i) the Conversion Shares now owned or hereafter acquired
by the Purchasers, (ii) all other shares of Common Stock owned by the
Purchasers, and (iii) all shares of Common Stock issuable with respect to
securities of the Company convertible into or exercisable for shares of Common
Stock now or hereafter acquired by any Purchaser.
"Registrable Securities" means (i) all of the Conversion Shares owned by
the Purchasers, (ii) all other shares of Common Stock now owned or hereafter
acquired by any Purchaser, (iii) all shares of Common Stock issuable with
respect to securities of the Company convertible into or exercisable for shares
of Common Stock now owned or hereafter acquired by any Purchaser, and (iv) any
Common Stock issued in respect of the shares described in clauses (i) through
(iii) upon any stock split, stock dividend, recapitalization or other similar
event.
The term "register" means to register under the Act and applicable state
securities laws for the purpose of effecting a public sale of securities.
"Registration Expenses" means all expenses incurred by the Company in
compliance with Sections 7.2, 7.3 or 7.5 hereof, including, without limitation,
all registration and filing fees, printing expenses, transfer taxes, fees and
disbursements of counsel for the Company, blue sky fees and expenses, and the
expenses of any special audits incident to or required by any such registration.
"Selling Expenses" means all underwriting discounts and selling commissions
applicable to the sale of Registrable Securities and the fees and disbursements
of counsel for the selling Holders and other security holders.
7.2 Requested Registrations
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(a) If on any two occasions after the date hereof, the Company shall
receive from one or more Initiating Holders a written request (on behalf of such
Initiating Holders and their respective affiliates) that the Company effect the
registration of Registrable Securities representing at least twenty-five percent
(25%) of the Registrable Securities then outstanding or issuable (or any lesser
percentage if the reasonably anticipated aggregate price to the public of the
Registrable Securities to be included in such registration would exceed $5
million), in
connection with a firm commitment underwriting managed by a nationally
recognized underwriter, the Company will:
(i) promptly give written notice of the proposed registration to all other
Holders; and
(ii) as soon as practicable, use all commercially reasonable efforts to
effect such registration as may be so requested and as would permit or
facilitate the sale and distribution of such portion of such Registrable
Securities as are specified in such request, together with such portion of the
Registrable Securities of any Holder or Holders joining in such request as are
specified in a written request given within twenty (20) days after the receipt
of such written notice from the Company. If the underwriter managing the
offering advises the Holders, including the Initiating Holders, who have
requested inclusion of their Registrable Securities in such registration that
marketing considerations require a limitation on the number of shares offered,
such limitation shall be imposed pro rata among such Holders who requested
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inclusion of Registrable Securities in such registration according to the number
of Registrable Securities each such Holder requested to be included in such
registration. Neither the Company nor any other shareholder may include shares
in a registration effected under this Section 7.2 without the consent of the
Holders holding a majority of the Registrable Securities sought to be included
in such registration if the inclusion of shares by the Company or the other
shareholders would limit the number of Registrable Securities sought to be
included by the Holders or reduce the offering price thereof. No registration
initiated by Initiating Holders hereunder shall count as a registration under
this Section 7.2 unless and until it shall have been declared effective.
(b) Selection of Underwriter. The underwriter of any underwriting
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requested under this Section 7.2 shall be selected by the Holders holding a
majority of the Registrable Securities included therein; provided that such
underwriter must be reasonably acceptable to the Company.
7.3 "Piggy Back" Registrations.
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(a) If the Company shall determine to register any of its securities,
either for its own account or the account of a security holder or holders
exercising their registration rights, other than a registration relating solely
to employee benefit plans, or a registration on any registration form which does
not permit secondary sales or does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:
(i) Promptly give to each Holder of Registrable Securities written
notice thereof (which shall include the number of shares the Company or other
security holder proposes to register and, if known, the name of the proposed
underwriter); and
(ii) Use its best efforts to include in such registration all the
Registrable Securities specified in a written request or requests, made by any
Holder within (20) days after the date of delivery of the written notice from
the Company described in clause (i) above. If the underwriter advises the
Company that marketing considerations require a limitation on the
number of shares offered pursuant to any registration statement, then the
Company may offer all of the securities it proposes to register for its own
account or the maximum amount that the underwriter considers saleable and such
limitation on any remaining securities that may, in the opinion of the
underwriter, be sold will be imposed pro rata among all the shareholders who are
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entitled to include shares in such registration statement according to the
number of Registrable Securities each such shareholder requested to be included
in such registration statement.
(b) The Company shall select the underwriter for an offering made
pursuant to the Section 7.3; provided that such underwriter must be reasonably
acceptable to the Holders of a majority of the Registrable Securities being
registered in such an offering.
7.4 Expenses of Registration. All Registration Expenses incurred in
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connection with any registration, qualification or compliance pursuant to
Section 7.2, 7.3 or 7.5 shall be paid by the Company. All Selling Expenses
incurred in connection with any such registration, qualification or compliance
shall be borne by the holders of the securities registered, pro rata on the
basis of the number of their shares so registered.
7.5 Registration on Form S-3. The Company shall use its best efforts to
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qualify for registration on Form S-3 or any comparable or successor form; and to
that end the Company shall register (whether or not required by law to do so)
the Common Stock under the Securities Exchange Act of 1934 (the "Exchange Act")
in accordance with the provisions of the Exchange Act following the effective
date of the first registration of any securities of the Company on Form S-1 or
any comparable or successor form. After the Company has qualified for the use
of Form S-3, in addition to the rights contained in the foregoing provisions of
this Article VII, the Holders of Registrable Securities shall have an unlimited
right to request registrations of Registrable Securities on form S-3 (such
requests shall be in writing and shall state the number of shares of Registrable
Securities to be disposed of and the intended methods of disposition of such
shares by such Holder or Holders).
7.6 Registration Procedures. In the case of each registration effected by
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the Company pursuant to this Article VII, the Company will keep each Holder of
Registrable Securities included in such registration advised in writing as to
the initiation of each registration and as to the completion thereof. At its
expense, the Company will do the following for the benefit of such Holders:
(a) Keep such registration effective for a period of one hundred
twenty days or until the Holder or Holders have completed the distribution
described in he registration statement relating thereto, whichever first occurs,
and amend or supplement such registration statement and the prospectus contained
therein from time to time to the extent necessary to comply with the Act and
applicable state securities laws;
(b) Use its best efforts to register or qualify the Registrable
Securities covered by such registration under the applicable securities or "blue
sky" laws of such jurisdictions as the selling shareholders may reasonably
request; provided, that the Company shall not be obligated to qualify to do
business in any jurisdiction where it is not then so qualified or otherwise
required
to be so qualified or to take any action which would subject it to the service
of process in suits other than those arising out of such registration;
(c) Furnish such number of prospectuses and other documents incident
thereto as a Holder from time to time may reasonably request;
(d) In connection with any underwritten offering pursuant to a
registration statement filled pursuant to Section 7.2 hereof, the Company will
enter into any underwriting agreement reasonably necessary to effect the offer
and sale of Common Stock, provided such underwriting agreement contains
customary underwriting provisions and is entered into by the Holders and
provided further that, if the underwriter so requests, the underwriting
agreement will contain customary contribution provisions on the part of the
Company;
(e) To the extent then permitted under applicable professional
guidelines and standards, use its best efforts to obtain a comfort letter from
the Company's independent public accountants in customary form and covering such
matters of the type customarily covered by comfort letters and an opinion form
the Company's counsel in customary form and covering such matters of the type
customarily covered in a public issuance of securities, in each case addressed
to the Holders, and provide copies thereof to the Holders; and
(f) Permit the counsel to the selling shareholders to inspect and
copy such corporate documents as he may reasonably request.
7.7 Indemnification.
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(a) The Company will, and hereby does, indemnify each Holder, each of
its officers, directors and partners, and each person controlling such Holder
within the meaning of the Act, with respect to which registration, qualification
or compliance has been effected pursuant to this Article VII, and each
underwriter, if any, and each person who controls such underwriter within the
meaning of the Act, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by the Company of the
Act or the Exchange Act or the securities act of any state or any rule or
regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each such Holder, each of its
officers, directs and partners, and each person controlling such Holder, each
such underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
whether or not resulting in any liability, provided that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement (or
alleged untrue statement) or omission (or alleged omission) based
upon written information furnished to the Company by such Holder or underwriter
and stated to be specifically for use therein.
(b) Each Holder will, if Registrable Securities held by him are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company or such
underwriter within the meaning of the Act and the rules and regulations
thereunder, each other such Holder and each of their officers, directors and
partners, and each person controlling such Holder, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company and such Holder's
directors, officers, partners, persons, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, whether or not
resulting in liability, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such ▇▇▇▇▇▇ and stated to be specifically for use
therein; provided, however, that the obligations of each Holder hereunder shall
be limited to an amount equal to the net proceeds received by such Holder upon
sale of his securities.
(c) Each party entitled to indemnification under this Section 7.7
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual or constructive knowledge of any claim as to which indemnity may be
sought, but the failure of any Indemnifying Party to give such notice shall not
relieve the Indemnifying Party of its obligations under Section 7.7 (except and
to the extent the Indemnifying Party has been prejudiced as a consequence
thereof). The Indemnifying Party will be entitled to participate in, and to the
extent that it may elect by written notice delivered to the Indemnified party
promptly after receiving the aforesaid notice from such Indemnified Party, at
its expense to assume, the defense of any such claim or any litigation resulting
therefrom, with counsel reasonably satisfactory to such Indemnified Party,
provided that the Indemnified Party may participate in such defense at its
expense, notwithstanding the assumption of such defense by the Indemnifying
Party, and provided, further, that if the defendants in any such action shall
include both the Indemnified Party and the Indemnifying Party and the
Indemnified Party shall have reasonably concluded that there nay be legal
defenses available to it and/or other Indemnified Parties which are different
from or additional to those available to the Indemnifying Party, the Indemnified
Party or Parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such Indemnified Party or Parties and the fees and expenses of such
counsel shall be paid by the Indemnifying Party. 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 to such
claim or litigation. Each Indemnified Party shall (i) furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom and (ii) shall
reasonably assist the Indemnifying Party in any such defense, provided that the
Indemnified Party shall not be required to expend its funds in connection with
such assistance.
(d) No Holder shall be required to participate in a registration
pursuant to which it would be required to execute an underwriting agreement in
connection with a registration effected under Section 7.2 or 7.3 which imposes
indemnification or contribution obligations on such Holder more onerous than
those imposed hereunder; provided, however, that the Company shall not be deemed
to breach the provisions of Section 7.2 or 7.3 if a Holder is note permitted to
participate in a registration on account of his refusal to execute an
underwriting agreement on the basis of this subsection (d).
7.8 Information by Holder. Each Holder of Registrable Securities included
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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 shall be reasonably required in connection
with any registration, qualification or compliance referred to in this Article
VII or otherwise required by applicable state or federal securities laws.
7.9 Limitations on Registration Rights. From and after the date of this
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Agreement, the Company shall not enter into any agreement with any holder or
prospective holder of any securities of the Company giving such holder or
prospective holder (a) the right to require the Company, upon any registration
of any of its securities, to include, among the securities which the Company is
then registering, securities owned by such holder, unless under the terms of
such agreement, such holder or prospective holder may include such securities in
any such registration only to the extent that the inclusion of its securities
will not limit the number of Registrable Securities sought to be included by the
Holders of Registrable Securities or reduce the offering price thereof; or (b)
the right to require the Company to initiate any registration of any securities
of the Company.
7.10 Exception to Registration. The Company shall not be required to
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effect a registration under this Article VII if (i) in the written opinion of
counsel for the Company, which counsel and the opinion so rendered shall be
reasonably acceptable to the Holders of Registrable Securities, such Holders may
sell without registration under the Act all Registrable Securities for which
they requested registration under the provisions of the Act and in the manner
and in the quantity in which the Registrable Securities were proposed to be
sold, or (ii) the Company shall have obtained from the Commission a "no-action"
letter to that effect; provided that this Section 7.10 shall not apply to sales
made under Rule 144(k) or any successor rule promulgated by the Commission until
after the effective date of the Company's initial registration of shares under
the Act. Notwithstanding the foregoing, in no event shall the provisions of
this Section 7.10 be construed to preclude a Holder of Registrable Securities
from exercising rights under Section 7.3
for a period of three years after the effective date of the Company's initial
registration of shares under the Act.
7.11 Rule 144 Reporting. With a view to making available the benefits of
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certain rules and regulations of the Commission which may permit the sale of
restricted securities (as that term is used in Rule 144 under the Act) to the
public without registration, the Company agrees to:
(a) make and keep public information available as those terms are
understood and defined in Rule 144 under the Act, at all times from and after
ninety days following the effective date of the first registration under the Act
filed by the Company for an offering of its securities to the general public;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required to the Company under the Act and
the Exchange Act at any time after it has become subject to such reporting
requirements; and
(c) so long as a Purchaser owns any restricted securities, furnish to
the Purchaser forthwith upon written request a written statement by the Company
as to its compliance with the reporting requirements of Rule 144 (at any time
from and after ninety days following the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), and of the Act and Exchange Act (at any time after it has
become subject to such reporting requirements), a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents so
filed as a Purchaser may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Purchaser to sell any such securities
without registration.
7.12 Listing Application. If shares of any class of stock of the Company
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shall be listed on a national securities exchange, the Company shall, at its
expense, include in its listing application all of the shares of the listed
class then owned by any Purchaser.
7.13 Damages. The Company recognizes and agrees that the holder of
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Registrable Shares shall not have an adequate remedy if the Company fails to
comply with the provisions of this Article VII, and that damages will not be
readily ascertainable, and the Company expressly agrees that in the event of
such failure any Holder of Registrable Shares shall be entitled to seek specific
performance of the Company's obligations hereunder and that the Company will not
oppose an application seeking such specific performance.
7.14 "Lock-Up Agreements with Underwriters. If on any occasion of
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registration, other than pursuant to Section 7.2, in which the Company proposes
to file a registration statement under the Act with respect to the proposed sale
of Common Stock of the type which has been or may be issued upon conversion of
the Purchased Shares pursuant to a fully-underwritten public offering, and the
managing underwriters shall request an agreement by the Holders not to sell any
of the Registrable Securities so held by each Holder for a period of 90 days
commencing on the date of effectiveness of any such registration statement in
order to effect an orderly public distribution thereof, then the Holders shall
agree to enter into and execute
such an agreement with such managing underwriter and the Company pertaining to a
restriction on the transfer of any shares of capital stock of the Company then
held by the Holder during such 90 day period; provided, however, that this
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Section 7.14 shall in no way limit the Holders' rights pursuant to Section 7.3
and provided further that, in the event of a registration covered by Section
7.3, any such agreement shall restrict only sales of such number of Registrable
Securities that are not being sold by the Holder pursuant to such registration.