REGISTRATION RIGHTS AGREEMENT
August 29, 2003
To: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Ladies and Gentlemen:
This will confirm that in consideration of your agreement on the date
hereof to purchase an aggregate of Four Million Five Hundred Thousand
(4,500,000) shares (the "Shares") of Common Stock, $.05 par value per share (the
"Common Stock"), of ▇▇▇▇▇▇, Inc., a New Jersey corporation (the "Company"),
pursuant to the Stock Purchase Agreement dated of June 26, 2003, as amended
through the date hereof (the "Purchase Agreement") between the Company and you,
as purchasers (the "Purchasers"), and as an inducement to the Purchasers to
consummate the transactions contemplated by the Purchase Agreement, the Company
covenants and agrees with each of the Purchasers as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall
have the following respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended,
or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"REGISTRATION EXPENSES" shall mean the expenses so described in Section 8.
"RESTRICTED STOCK" shall mean the Shares, excluding Shares which (a) have
been registered under the Securities Act pursuant to an effective
registration statement filed thereunder and disposed of in accordance with
the registration statement covering them, (b) are eligible for sale without
restrictions pursuant to Rule 144(k) under the Securities Act or (c) have
been acquired by any person or entity which, by virtue of Section 13(a)
hereof, are not entitled to the benefits of and rights conferred by this
Agreement.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean the expenses so described in Section 8.
2. RESTRICTIVE LEGEND. Each certificate representing the Shares shall, except
as otherwise provided in this Section 2 or in Section 3, be stamped or
otherwise imprinted with a legend substantially in the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN
REGISTERED UNDER SUCH ACT AND ALL SUCH APPLICABLE LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE."
A certificate shall not bear such legend if in the written opinion of
counsel satisfactory to the Company the securities represented thereby may
be publicly sold without registration under the Securities Act and any
applicable state securities laws.
3. NOTICE OF PROPOSED TRANSFER. Prior to any proposed transfer of any Shares
(other than under the circumstances described in Sections 4, 5 or 6), the
holder thereof shall give written notice to the Company of its intention to
effect such transfer. Each such notice shall describe the manner of the
proposed transfer and, if requested by the Company, shall be accompanied by
a written opinion of counsel satisfactory to the Company to the effect that
the proposed transfer may be effected without registration under the
Securities Act and any applicable state securities laws, whereupon the
holder of such stock shall be entitled to transfer such stock in accordance
with the terms of its notice. Each certificate for Shares transferred as
above provided shall bear the legend set forth in Section 2, except that
such certificate shall not bear such legend if (i) such transfer is in
accordance with the provisions of Rule 144 (or any other rule permitting
public sale without registration under the Securities Act) or (ii) the
opinion of counsel referred to above is to the further effect that the
transferee and any subsequent transferee (other than an affiliate of the
Company) would be entitled to transfer such securities in a public sale
without registration under the Securities Act. The restrictions provided
for in this Section 3 shall not apply to securities which are not required
to bear the legend prescribed by Section 2 in accordance with the
provisions of that Section.
4. DEMAND REGISTRATION.
(a) At any time after the issuance of the Shares, the holders of
Restricted Stock constituting at least sixty-six and two-thirds
percent (66 2/3%) of the total shares of Restricted Stock then
outstanding may request the Company to register under the Securities
Act not less than twenty-five percent (25%) of the shares of
Restricted Stock held by such requesting holder or holders for sale in
the manner specified in such notice. Notwithstanding anything to the
contrary contained herein, no request may be made under this Section 4
within one hundred eighty (180) days after the effective date of a
registration statement filed by the Company covering a firm commitment
underwritten public offering in which the holders of Restricted Stock
shall have been entitled to join pursuant to Sections 5 or 6 and in
which there shall have been effectively registered all shares of
Restricted Stock as to which registration shall have been requested.
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(b) Following receipt of any notice under this Section 4, the Company
shall immediately notify all holders of Restricted Stock from whom
notice has not been received and shall use its best efforts to
register under the Securities Act, for public sale in accordance with
the method of disposition specified in such notice from requesting
holders, the number of shares of Restricted Stock specified in such
notice (and in all notices received by the Company from other holders
within thirty (30) days after the giving of such notice by the
Company). If such method of disposition shall be an underwritten
public offering, the holders of a majority of the shares of Restricted
Stock to be sold in such offering may designate the managing
underwriter of such offering, subject to the approval of the Company,
which approval shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing sentence, if the Company elects to
include shares of Common Stock in such offering pursuant to Section
4(d) hereof such that the number of shares requested for inclusion by
the Company (prior to any cut back by an underwriter) is equal to or
greater than the number of shares of included Restricted Stock
pursuant to this Section 4, then the Company may, in its sole
discretion, designate the managing underwriter of such offering. The
Company shall be obligated to register Restricted Stock pursuant to
this Section 4 on two (2) occasions only, PROVIDED, HOWEVER, that such
obligation shall be deemed satisfied only when a registration
statement covering all shares of Restricted Stock specified in notices
received as aforesaid, for sale in accordance with the method of
disposition specified by the requesting holders, shall have become
effective and, if such method of disposition is a firm commitment
underwritten public offering, all such shares shall have been sold
pursuant thereto.
(c) Notwithstanding the foregoing, the Company shall not be obligated to
effect any demand registration: (i) unless such registration would
have a net aggregate offering price exceeding $500,000; or (ii) if
such demand is made within 12 months of a previous demand
registration. In addition, if the President or Chief Executive Officer
of the Company executes a certificate giving notice of the Company's
intention to file a registration statement or stating that in the good
faith judgment of the Board of Directors of the Company the offering
would be detrimental to the Company or its shareholders, the Company
may delay such request one or more times (but only once in any 12
month period) for a period not to exceed 180 days after receipt of the
request pursuant to Section 4(a) above.
(d) The Company shall be entitled to include in any registration statement
referred to in this Section 4, for sale in accordance with the method
of disposition specified by the requesting holders, shares of Common
Stock to be sold by the Company for its own account, except as and to
the extent that, in the opinion of the managing underwriter (if such
method of disposition shall be an underwritten public offering), such
inclusion would adversely affect the marketing of the Restricted Stock
to be sold. In such event, the number of shares of Common Stock to be
registered on behalf of the Company, if any, shall be computed as set
forth in Section 4(e) below.
(e) Whenever a registration requested pursuant to this Section 4 is for an
underwritten public offering, only shares of Common Stock which are to
be included in the
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underwriting may be included in the registration. Notwithstanding the
provisions of Sections 4(b) and 4(c), if the underwriter determines
that marketing factors require a limitation of the total number of
shares of Common Stock to be underwritten or a limitation of the total
number of shares of Common Stock to be sold by the Company, then the
number of shares to be included in the registration and the
underwriting shall first be allocated among all holders who indicated
to the Company their decision to distribute any of their Restricted
Stock through such underwriting, in proportion, as nearly as
practicable, to the respective number of shares of Restricted Stock
requested for inclusion in the registration by such holders , then the
remainder, if any, to the Company. No stock excluded from the
underwriting by reason of the underwriter's marketing limitation shall
be included in such registration. If the Company determines not to
participate in any such underwriting, it may elect to withdraw
therefrom by written notice, within five (5) days of notice to the
Company of such underwriter's marketing limitation, to the holders of
Restricted Stock and the underwriter. The securities so withdrawn from
such underwriting shall also be withdrawn from such registration.
5. PIGGYBACK REGISTRATION. If the Company, at any time (other than pursuant to
Section 4 or Section 6) proposes to register any of its securities under
the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Forms ▇-▇, ▇-▇ or their respective successors or
another form not available for registering the Restricted Stock for sale to
the public), each such time it will give written notice to all holders of
outstanding Restricted Stock of its intention so to do. Upon the written
request of any such holder, received by the Company within fifteen (15)
days after the giving of any such notice by the Company, to register any of
its Restricted Stock (which request shall state the intended method of
disposition thereof), the Company will use its best efforts to cause the
Restricted Stock as to which registration shall have been so requested to
be included in the securities to be covered by the registration statement
proposed to be filed by the Company, all to the extent requisite to permit
the sale or other disposition by the holder (in accordance with its written
request) of such Restricted Stock so registered. In the event that any
registration pursuant to this Section 5 shall be, in whole or in part, an
underwritten public offering of Common Stock, the number of shares of
Restricted Stock to be included in such an underwriting may be reduced (pro
rata among the requesting holders of Restricted Stock as well as requesting
holders of any other registrable securities of the Company with piggyback
registration rights based upon the number of shares of Restricted Stock and
such other securities requested for inclusion by such holders) if and to
the extent that the managing underwriter shall be of the opinion that such
inclusion would adversely affect the marketing of the securities to be sold
by the Company therein. Notwithstanding the foregoing provisions, the
Company may withdraw any registration statement referred to in this Section
5 without thereby incurring any liability to the holders of Restricted
Stock.
6. REGISTRATION ON FORM S-3. If at any time (i) a holder or holders of Shares
or Restricted Stock request that the Company file a registration statement
on Form S-3 or any successor thereto for a public offering of all or any
portion of the shares of Restricted Stock held by such requesting holder or
holders, the reasonably anticipated aggregate price to the public of which
would exceed $500,000, and (ii) the Company is a registrant
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entitled to use Form S-3 or any successor thereto to register such shares,
then the Company shall use its best efforts to register under the
Securities Act on Form S-3 or any successor thereto, for public sale in
accordance with the method of disposition specified in such notice, the
number of shares of Restricted Stock specified in such notice. Whenever the
Company is required by this Section 6 to use its best efforts to effect the
registration of Restricted Stock, each of the procedures and requirements
of Section 4 (including but not limited to the requirement that the Company
notify all holders of Restricted Stock from whom notice has not been
received and provide them with the opportunity to participate in the
offering) shall apply to such registration, PROVIDED, HOWEVER, that the
number of registrations on Form S-3 which may be requested and obtained
under this Section 6 shall be limited to three (3). Notwithstanding
anything to the contrary contained herein, no request may be made under
this Section 6 within one hundred eighty (180) days after the effective
date of a registration statement filed by the Company covering a firm
commitment underwritten public offering in which the holders of Restricted
Stock shall have been entitled to join pursuant to Sections 4 or 5 and in
which there shall have been effectively registered all shares of Restricted
Stock as to which registration shall have been requested. Notwithstanding
the foregoing, the Company shall not be obligated to effect any S-3
registration: (i) unless such request would have a net aggregate offering
price exceeding $500,000; or (ii) if such request is made within 12 months
of a previous S-3 registration. In addition, if the President or Chief
Executive Officer of the Company executes a certificate giving notice of
the Company's intention to file a registration statement or stating that in
the good faith judgment of the Board of Directors of the Company the
offering would be detrimental to the Company or its shareholders, the
Company may delay such request one or more times (but only once in any 12
month period) for a period not to exceed 180 days after receipt of the
request pursuant to this Section 6.
7. REGISTRATION PROCEDURES. If and whenever the Company is required by the
provisions of Sections 4, 5 or 6 to use its best efforts to effect the
registration of any shares of Restricted Stock under the Securities Act,
the Company will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement with
respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for the period
of the distribution contemplated thereby (determined as hereinafter
provided);
(b) prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective for the period specified in paragraph (a) above and comply
with the provisions of the Securities Act with respect to the
disposition of all Restricted Stock covered by such registration
statement in accordance with the sellers' intended method of
disposition set forth in such registration statement for such period;
(c) furnish to each seller of Restricted Stock and to each underwriter
such number of copies of the registration statement and the prospectus
included therein (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public sale
or other disposition of the Restricted Stock covered by such
registration statement;
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(d) use its best efforts to register or qualify the Restricted Stock
covered by such registration statement under the securities or "blue
sky" laws of such jurisdictions as the sellers of Restricted Stock or,
in the case of an underwritten public offering, the managing
underwriter, reasonably shall request, PROVIDED, HOWEVER, that the
Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general
service of process in any such jurisdiction;
(e) use its best efforts to list the Restricted Stock covered by such
registration statement with any securities exchange on which the
Common Stock of the Company is then listed;
(f) immediately notify each seller of Restricted Stock and each
underwriter under such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event of which the Company has
knowledge as a result of which the prospectus contained in such
registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing;
(g) if the offering is underwritten and at the request of any seller of
Restricted Stock, use its best efforts to furnish on the date that
Restricted Stock is delivered to the underwriters for sale pursuant to
such registration: (i) an opinion dated such date of counsel
representing the Company for the purposes of such registration,
addressed to the underwriters and to such seller, stating that such
registration statement has become effective under the Securities Act
and that (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act, (B) the registration statement,
the related prospectus and each amendment or supplement thereof comply
as to form in all material respects with the requirements of the
Securities Act (except that such counsel need not express any opinion
as to financial statements contained therein) and (C) to such other
effects as reasonably may be requested by counsel for the underwriters
or by such seller or its counsel and (ii) a letter dated such date
from the independent public accountants retained by the Company,
addressed to the underwriters and to such seller, stating that they
are independent public accountants within the meaning of the
Securities Act and that, in the opinion of such accountants, the
financial statements of the Company included in the registration
statement or the prospectus, or any amendment or supplement thereof,
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information
as to the period ending no more than five business days prior to the
date of such letter) with respect to such registration as such
underwriters reasonably may request;
(h) make available for inspection by each seller of Restricted Stock, any
underwriter participating in any distribution pursuant to such
registration statement, and any attorney, accountant or other agent
retained by such seller or underwriter, all
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financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors
and employees to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection
with such registration statement;
(i) make available to each seller of Restricted Stock, as soon as
reasonably practicable, an earnings statement covering a period of at
least twelve (12) months, but not more than eighteen (18) months,
beginning with the first month after the effective date of the
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;
(j) furnish to each seller of Restricted Stock copies of all documents
filed with the Commission and all correspondence between the Company
and the Commission with respect to a registration in accordance with
Sections 4, 5 or 6; and
(k) otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission.
For purposes of Section 7(a) and 7(b) and of Section 4(c), the period of
distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of
distribution of Restricted Stock in any other registration shall be deemed
to extend until the earlier of the sale of all Restricted Stock covered
thereby and thirty (30) days after the effective date thereof.
In connection with each registration hereunder, the sellers of Restricted
Stock will furnish to the Company in writing such information with respect
to themselves and the proposed distribution by them as reasonably shall be
necessary in order to assure compliance with federal and applicable state
securities laws.
In connection with each registration pursuant to Sections 4, 5 or 6
covering an underwritten public offering, the Company and each seller agree
to enter into a written agreement with the managing underwriter selected in
the manner herein provided in such form and containing such provisions as
are customary in the securities business for such an arrangement between
such underwriter and companies of the Company's size and investment
stature.
Notwithstanding any other provisions of this Agreement, the Company's
obligation to file a registration statement, or cause such registration
statement to become and remain effective, shall be suspended for a period
not to exceed ninety (90) days in any twelve (12) month period if there
exists at the time material non-public information relating to the Company
which, in the reasonable opinion of the Company, should not be disclosed or
if at the time of any request to register Restricted Stock pursuant to
Section 4 or 6, the Company is engaged or has fixed plans to engage within
thirty (30) days of the time of the request in a registered public offering
as to which holders of Restricted Stock may include such Restricted Stock
pursuant to Section 5. The Company may not exercise its rights pursuant to
this paragraph more than once in any 12-month period.
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8. EXPENSES. All expenses incurred by the Company in complying with Sections
4, 5 and 6, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for the Company, fees and expenses (including counsel
fees) incurred in connection with complying with state securities or "blue
sky" laws, fees of the National Association of Securities Dealers, Inc.,
transfer taxes, fees of transfer agents and registrars and costs of
insurance but excluding any Selling Expenses, are called "Registration
Expenses". All fees and disbursements of counsel for the Sellers of
Restricted Stock and all underwriting discounts and selling commissions
applicable to the sale of Restricted Stock are called "Selling Expenses".
The Company will pay all Registration Expenses in connection with each
registration statement under Sections 4, 5 or 6. All Selling Expenses in
connection with each registration statement under Sections 4, 5 or 6 shall
be borne by the participating sellers in proportion to the number of shares
sold by each, or by such participating sellers other than the Company
(except to the extent the Company shall be a seller) as they may agree.
Notwithstanding the foregoing, if a registration statement pursuant to
Section 4 or 6 is withdrawn at the request of the shareholders requesting
such registration (other than as a result of material adverse information
concerning the business or financial condition of the Company which is made
known to such shareholders after the date on which such registration was
requested) and, in the case of a registration pursuant to Section 4, if
such requesting shareholders elect not to have such registration counted as
a registration requested under Section 4, the requesting shareholders shall
pay the Registration Expenses of such registration pro rata in accordance
with the number of shares of Restricted Stock owned by them included in
such registration statement.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) In the event of a registration of any of the Restricted Stock under
the Securities Act pursuant to Sections 4, 5 or 6, the Company will
indemnify and hold harmless each seller of such Restricted Stock
thereunder, each underwriter of such Restricted Stock thereunder and
each other person, if any, who controls such seller or underwriter
within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which such seller,
underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
Restricted Stock was registered under the Securities Act pursuant to
Sections 4, 5 or 6, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each
such seller, each such underwriter and each such controlling person
for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
damage, liability or action, PROVIDED, HOWEVER, that (i) the foregoing
indemnity shall not apply to amounts paid in settlement of any loss,
claim, damage, liability or action if such settlement is effected
without the consent of the Company (which consent shall not be
unreasonably withheld)
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and (ii) the Company will not be liable in any such case if and to the
extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information
furnished by any such seller, any such underwriter or any such
controlling person in writing specifically for use in such
registration statement or prospectus.
(b) In the event of a registration of any of the Restricted Stock under
the Securities Act pursuant to Sections 4, 5 or 6, each seller of such
Restricted Stock thereunder, severally and not jointly, will indemnify
and hold harmless the Company, each person, if any, who controls the
Company within the meaning of the Securities Act, each officer of the
Company who signs the registration statement, each director of the
Company, each underwriter and each person who controls any underwriter
within the meaning of the Securities Act, against all losses, claims,
damages or liabilities, joint or several, to which the Company or such
officer, director, underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement
under which such Restricted Stock was registered under the Securities
Act pursuant to Sections 4, 5 or 6, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
and will reimburse the Company and each such officer, director,
underwriter and controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, PROVIDED,
HOWEVER, that such seller will be liable hereunder in any such case if
and only to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with information pertaining to such seller, as such,
furnished in writing to the Company by such seller specifically for
use in such registration statement or prospectus, and PROVIDED,
FURTHER, HOWEVER, that the liability of each seller hereunder shall be
limited to the proportion of any such loss, claim, damage, liability
or expense which is equal to the proportion that the public offering
price of the shares sold by such seller under such registration
statement bears to the total public offering price of all securities
sold thereunder, but not in any event to exceed the net proceeds
received by such seller from the sale of Restricted Stock covered by
such registration statement.
(c) Promptly after receipt by an indemnified party hereunder of notice of
the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party
hereunder, notify the indemnifying party in writing thereof, but the
omission to so notify the indemnifying party shall not relieve it from
any liability which it may have to such indemnified party other than
under this Section 9 and shall only relieve it from any liability
which it may have to such indemnified party under this
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Section 9 if and to the extent the indemnifying party is prejudiced by
such omission. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such
indemnified party, and, after notice from the indemnifying party to
such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such
indemnified party under this Section 9 for any legal expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected, PROVIDED, HOWEVER, that, if the
defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which
are different from or additional to those available to the
indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified party shall have the right to
select a separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the
expenses and fees of such separate counsel and other expenses related
to such participation to be reimbursed by the indemnifying party as
incurred.
(d) In order to provide for just and equitable contribution in any case in
which either (i) any holder of Restricted Stock exercising rights
under this Agreement, or any controlling person of any such holder,
makes a claim for indemnification pursuant to this Section 9 but it is
judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification
may not be enforced in such case notwithstanding the fact that this
Section 9 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of
any such selling holder or any such controlling person in
circumstances for which indemnification is provided under this Section
9; then, and in each such case, the Company and such holder will
contribute to the aggregate losses, claims, damages or liabilities to
which they may be subject (after contribution from others) in such
proportion as shall be fair and equitable based upon the relative
benefits received by each party, the parties relative knowledge and
access to information concerning the matter and the opportunity to
correct and prevent the untrue misstatement; PROVIDED, HOWEVER, that,
in any such case, (A) no such holder will be required to contribute
any amount in excess of the public offering price of all such
Restricted Stock offered by it pursuant to such registration
statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person or
entity who was not guilty of such fraudulent misrepresentation.
10. CHANGES IN COMMON STOCK. If, and as often as, there is any change in the
Common Stock by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means,
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appropriate adjustment shall be made in the provisions hereof so that the
rights and privileges granted hereby shall continue with respect to the
Common Stock as so changed.
11. RULE 144 REPORTING. With a view to making available the benefits of certain
rules and regulations of the Commission which may at any time permit the
sale of the Restricted Stock 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 Securities Act;
(b) use its best efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) furnish to each holder of Restricted Stock forthwith upon request a
written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 and of the Securities Act and
the Exchange Act, a copy of the most recent annual or quarterly report
of the Company, and such other reports and documents so filed by the
Company as such holder may reasonably request in availing itself of
any rule or regulation of the Commission allowing such holder to sell
any Restricted Stock without registration.
12. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to you as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action
and will not violate any provision of law, any order of any court or
other agency of government, the Charter or By-laws of the Company or
any provision of any indenture, agreement or other instrument to which
it or any or its properties or assets is bound, conflict with, result
in a breach of or constitute (with due notice or lapse of time or
both) a default under any such indenture, agreement or other
instrument or result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any of the properties or
assets of the Company.
(b) This Agreement has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms (subject to equitable
principles and to applicable bankruptcy, reorganization, insolvency,
moratorium and other similar laws affecting the enforceability of
creditors' rights generally and to applicable restrictions on the
enforceability of indemnification and contribution).
13. MARKET STAND-OFF AGREEMENT. If requested in writing by the underwriters for
the initial underwritten public offering of securities of the Company, each
holder of Restricted Stock who is a party to this Agreement shall agree not
to sell publicly any shares of Restricted Stock or any other shares of
Common Stock (other than shares of Restricted Stock or other shares of
Common Stock being registered in such offering), without the consent of
such underwriters, for a period of not more than one hundred eighty (180)
days
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following the effective date of the registration statement relating to such
offering; provided, however, that no Purchaser shall be subject to the
restriction set forth in this Section 13 unless all executive officers and
directors are subject to a similar restriction.
14. TERMINATION OF RIGHTS. Except as otherwise provided herein, all rights and
obligations under this Agreement shall terminate upon the earliest of : (a)
with respect to a particular holder of Restricted Stock, whenever such
holder is eligible to sell all of its restricted stock under Rule 144 of
the Securities Act or otherwise during any ninety (90) day period.
15. BENEFITS OF AGREEMENT. All covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto shall bind and inure
to the benefit of the respective successors and assigns of the parties
hereto (including without limitation transferees of the Restricted Stock),
whether so expressed or not, PROVIDED, HOWEVER, that registration rights
conferred herein on the holders of Restricted Stock shall only inure to the
benefit of a transferee of Restricted Stock if (i) such transfer is
effected in accordance with all applicable securities laws, (ii) written
notice of the transfer is promptly given to the Company and (iii) such
transferee agrees in writing to be bound by all of the terms and conditions
of this Agreement.
16. MISCELLANEOUS.
(a) NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered in person, mailed
by certified or registered mail, return receipt requested, or sent by
telecopier or telex, addressed as follows:
if to the Company or any other party hereto, at the address
of such party set forth on the signature page of this
Agreement;
if to any subsequent holder of Restricted Stock, to it at
such address as may have been furnished to the Company in
writing by such holder;
or, in any case, at such other address or addresses as shall have been
furnished in writing to the Company (in the case of a holder of Restricted
Stock) or to the holders of Restricted Stock (in the case of the Company)
in accordance with the provisions of this paragraph.
(b) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.
(c) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof. This Agreement
may not be amended or modified, and no provision hereof may be waived,
without the written consent of the Company and the holders of at least
two-thirds of the outstanding shares of Restricted Stock.
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(d) COUNTERPARTS. This Agreement may be executed 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.
(e) SEVERABILITY If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in
any manner affect or render illegal, invalid or unenforceable any
other provision of this Agreement, and this Agreement shall be carried
out as if any such illegal, invalid or unenforceable provision were
not contained herein.
(f) CAPTIONS. The captions herein are inserted for convenience only and
shall not define, limit, extend or describe the scope of the Agreement
or affect the construction hereof.
Please indicate your acceptance of the foregoing by signing and returning
the enclosed counterpart of this letter, whereupon this Agreement shall be a
binding agreement between the Company and you.
Very truly yours,
▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
▇▇▇▇▇▇, Inc.
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
PURCHASERS:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Inc.
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▇▇▇▇▇▇, Inc.
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/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Inc.
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▇▇▇▇▇▇, Inc.
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