PREEMPTIVE AND REGISTRATION RIGHTS AGREEMENT
EXHIBIT
10.2
THIS
PREEMPTIVE AND REGISTRATION RIGHTS AGREEMENT (this
“Agreement”) is entered into as of November 26, 2007 by
and among PrivateBancorp, Inc., a Delaware corporation (the
“Company”), and the persons listed on the signature
page hereof
(referred to collectively herein, and including the Institutional Investor
(as
defined below), as the “Investors” and each individually as an
“Investor”).
RECITALS
WHEREAS,
this Agreement is made pursuant to the Stock Purchase Agreement (the
“Stock Purchase Agreement”), dated as of November 26,
2007, by and among the Company and certain purchasers of shares of the Company’s
common stock and the Company’s Series A Junior Nonvoting Preferred Stock
(the “Series A Stock”) thereunder, including the
Investors.
WHEREAS,
pursuant to the Stock Purchase Agreement, (a) each of the Investors has
agreed to purchase from the Company pursuant to a private placement offering
by
the Company of shares of its Common Stock, no par value (the “Common
Stock”) and/or shares of its Series A Stock (together with the
Common Stock, the “Shares”), and (b) the Company will
issue the Shares to the Investors in accordance therewith; and
WHEREAS,
in connection with the consummation of the transactions contemplated by the
Stock Purchase Agreement, the parties desire to enter into this Agreement in
order to grant certain registration rights to the Investors, and certain
preemptive rights to the Institutional Investor, as set forth
below.
NOW,
THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1 GENERAL
1.1 Definitions.
As used in this Agreement, the following terms shall have the following
respective meanings:
“Affiliate”
of any particular Person means any other Person controlling, controlled by
or
under common control with such particular person or
entity. For purposes of clarification GTCR Fund IX/A, L.P., a
Delaware limited partnership, GTCR Fund IX/B, L.P., a Delaware limited
partnership and GTCR Co-Invest III, L.P., a Delaware limited partnership, shall
be deemed to be Affiliates.
“Common
Stock” means shares of common stock, no par value per share, of the
Company.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, or similar
federal statute, and the rules and regulations of the Commission thereunder,
all
as the same shall be in effect at the time.
“Form S-3”
means such form under the Securities Act as in effect on the date hereof or
any
successor or similar registration form under the Securities Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the
SEC.
“Holder”
means any Investor, including the Institutional Investor and its Affiliates,
who
holds Registrable Securities and any holder of Registrable Securities to whom
the registration rights conferred by this Agreement have been transferred in
compliance with Section 2.10 hereof.
“Institutional
Investor” means GTCR Fund IX/A, L.P., a Delaware limited
partnership.
“Institutional
Investor Percentage Interest” means the aggregate percentage beneficial
ownership of the Institutional Investor and its Affiliates of the Company’s
outstanding shares of Common Stock on the date of determination (assuming
conversion of the Series A Stock).
“Lock-up
Agreement” has the meaning assigned thereto in Section 5.2 of the
Stock Purchase Agreement.
“New
Stock” means Common Stock or Series A Stock, or securities
convertible into or exchangeable for Common Stock of the Company or which have
voting rights or participation features with Common Stock of the Company,
offered in a public or nonpublic offering by the Company.
“Person”
means any individual, corporation, partnership, joint venture, limited liability
company, business trust, joint stock company, trust or unincorporated
organization or any government or any agency or political subdivision
thereof.
“Qualified
Equity Offering” means a public or nonpublic offering of Common Stock
or Series A Stock, or securities convertible into or exchangeable for
Common Stock of the Company or which have voting rights or participation
features with Common Stock of the Company (collectively, “New
Stock”) solely for cash and not pursuant to a Special Registration;
provided, however, that none of the following offerings shall
constitute a Qualified Equity Offering: (a) any offering
pursuant to any stock purchase plan, stock ownership plan, stock option or
equity compensation plan or other similar plan where stock is being issued
or
offered to a trust, other entity or otherwise, to or for the benefit of any
employees, potential employees, officers or directors of the Company, or
(b) any offering made as consideration pursuant to an acquisition (whether
structured as a merger or otherwise), a partnership or joint venture or
strategic alliance or investment by the Company or similar non-capital raising
transaction (but not an offering to raise capital to fund an
acquisition).
“Register,”
“registered,” and “registration” shall refer
to a registration effected by preparing and filing a registration statement
in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of effectiveness of such
registration statement.
“Registrable
Securities” means (a) Shares of Common Stock; (b) any shares
of Common Stock issued or issuable upon the conversion of any Series A
Stock issued pursuant to
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the
Stock
Purchase Agreement; (c) any other shares of Common Stock held by the
Holders; and (d) any Common Stock of the Company issued as (or issuable
upon the conversion or exercise of any warrant, right, preferred stock or other
security which is issued as) a dividend or other distribution with respect
to,
or in exchange for or in replacement of, the Shares or any other shares of
Common Stock held by the Holders, provided, however, that
Registrable Securities shall not include any shares of Common Stock which have
been sold to the public by a Holder either pursuant to a registration statement
or Rule 144 under the Securities Act, or which have been sold in a private
transaction in which the transferor’s rights under this Agreement are not
assigned.
“Registrable
Securities then outstanding” shall be the number of shares determined
by calculating the total number of shares of the Company’s Common Stock that are
Registrable Securities and either (a) are then issued and outstanding or
(b) are issuable pursuant to exercisable or convertible securities
(including Series A Stock).
“Registration
Expenses” shall mean all expenses incurred by the Company in effecting
any registration pursuant to this Agreement (including any Mandatory
Registration or Shelf Registration), including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, and expenses of the
Company’s independent accountants in connection with any regular or special
reviews or audits incident to or required by any such registration, and fees
and
expenses of underwriters (excluding discounts and commissions) and any other
Persons retained by the Company, but shall not include Selling Expenses, certain
fees and disbursements of counsel for the Holders (except as set forth below)
and the compensation of regular employees of the Company, which shall be paid
in
any event by the Company. Notwithstanding the foregoing, Registration
Expenses shall include the reasonable, documented, fees and expenses of one
counsel chosen by the holders of a majority of the Registrable Securities
covered by such registration for such counsel rendering services customarily
performed by counsel for selling stockholders that are submitted to the Company
in writing.
“SEC”
or “Commission” means the Securities and Exchange Commission
and any successor agency.
“Securities
Act” shall mean the Securities Act of 1933, as amended, or 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 all underwriting discounts, selling commissions
and stock transfer taxes applicable to the sale of Registrable Securities and
fees and disbursements of counsel for any Holder (other than the fees and
disbursements of counsel included in Registration Expenses).
“Series A
Stock” means the Company’s Series A Junior Nonvoting Preferred
Stock.
“Shares”
mean shares of Common Stock and/or Series A Stock issued by the Company to
the Investors pursuant to the Stock Purchase Agreement.
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“Special
Registration” means the registration of (a) equity securities
and/or options or other rights in respect thereof solely registered on
Form S-4 or Form S-8 (or successor forms) or (b) shares of equity
securities and/or options or other rights in respect thereof to be offered
to
directors, management, employees, potential employees, consultants, customers,
lenders or vendors of the Company or its direct or indirect subsidiaries or
in
connection with dividend reinvestment plans.
SECTION 2 REGISTRATION
2.1 Demand
Registration and Shelf Registration.
(a) Subject
to the conditions of this Section 2.1 and the terms and conditions of the
Lock-up Agreement, if the Company shall receive a written request from
(1) the Institutional Investor, so long as the Institutional Investor and
its Affiliates hold at least 25% of the Shares (determined on an as converted
to
Common Stock basis) held by the Institutional Investor and its Affiliates as
of
the date hereof or (2) , in the event the Institutional Investor and its
Affiliates do not hold at least 25% of the Shares (determined on an as converted
to Common Stock basis) held by the Institutional Investor and its Affiliates
as
of the date hereof, then the Holders of at least fifty percent (50%) of the
Registrable Securities (the “Initiating Holders”) that the
Company file a registration statement under the Securities Act covering the
registration of at least twenty-five percent (25%) of the Registrable Securities
then outstanding (or a lesser percent if the anticipated aggregate offering
price, net of underwriting discounts and commissions, would exceed $50,000,000),
then the Company shall, within ten (10) days of the receipt thereof, give
written notice of such request to all Holders, and subject to the limitations
of
this Section 2.1, effect, as expeditiously as reasonably possible, the
registration under the Securities Act of all Registrable Securities that either
the Holders request to be registered.
(b) The
Company shall use its reasonable best efforts to file with the SEC a
registration statement on the applicable SEC form with respect to the resale
from time to time, whether underwritten or otherwise, of the Registrable
Securities by the holders thereof within nine months after the date
hereof. The Company shall use its reasonable best efforts to respond
to all SEC comments related to such registration statement within 20 calendar
days of the receipt thereof, and shall use its reasonable best efforts to cause
such registration statement to be declared effective by the SEC within twelve
months after the date hereof. The Company shall use its reasonable
best efforts to maintain the effectiveness of the registration effected pursuant
to this Section 2.1(b) at all times, subject only to the limitations on
effectiveness set forth in Section 2.5 below. The registration
contemplated by this Section 2.1(b) is referred to herein as the “Mandatory
Registration.” The Mandatory Registration shall be filed with the SEC
in accordance with and pursuant to Rule 415 promulgated under the
Securities Act (or any successor rule then in effect) (a “Shelf
Registration”). So long as any such Shelf Registration is
effective as required herein and in compliance with the Securities Act and
is
usable for resale of Registrable Securities, the Institutional Investor or
the
holders of at least 50% of the Registrable Securities shall be entitled to
demand any number of draw-downs (including underwritten draw-downs, provided
that the anticipated aggregate offering value of the Registrable Securities
requested to be included in such underwritten draw-down must equal at least
twenty-five percent (25%) of the Registrable Securities then outstanding (or
a
lesser percent if the anticipated aggregate offering price, net of underwriting
discounts and commissions, would exceed
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$25,000,000))
from the shelf and, in connection with any such draw-down, the Company shall
take all customary and reasonable actions that the Company would take in
connection with an underwritten registration pursuant to Section 2.1(a) or
Section 2.3 (including, without limitation, all actions referred to in
Section 2.5 necessary to effectuate such sale in the manner determined by
the holders of at least a majority of the Registrable Securities to be included
in such underwritten draw-down). The Company shall use its reasonable
efforts to cause the registration statement or statements filed on Form S-3
or any similar short-form registration as the Company may elect to remain
effective until such date (the “Shelf Termination Date”) as is
the earlier of (i) the date on which all Registrable Securities included in
the registration statement shall have been sold or shall have otherwise ceased
to be Registrable Securities and (ii) the date on which all remaining
Registrable Securities may be sold during any ninety (90) day period without
any
restriction pursuant to Rule 144 under the Securities Act, other than
Rule 144(k), after taking into account any Holders’ status as an affiliate
of the Company as determined by the counsel to the Company pursuant to a written
opinion letter addressed to the Company’s transfer agent to such
effect. In the event the Mandatory Registration must be effected on
Form S-1 or any similar long-form registration as the Company may elect,
such registration shall nonetheless be filed as a Shelf Registration and the
Company shall use its commercially reasonable efforts to keep such registration
current and effective, including by filing periodic post-effective amendments
to
update the financial statements contained in such registration statement in
accordance with Regulation S-X promulgated under the Securities Act until
the Shelf Termination Date. The Company shall not include in the
Mandatory Registration any securities which are not Registrable Securities
without the prior written consent of the holders of at least a majority of
the
Registrable Securities included in such registration.
(c) If
the Institutional Investor or the Initiating Holders, as the case may be, intend
to distribute the Registrable Securities covered by their request by means
of an
underwriting or any underwritten takedown off the registration statement filed
pursuant to the Mandatory Registration, they shall so advise the Company as
a
part of their request made pursuant to this Section 2.1 or any request
pursuant to Section 2.3 and the Company shall include such information in
the written notice referred to in Section 2.1(a), Section 2.1(b) or
Section 2.3(a), as applicable. In such event, the right of any
Holder to include such Holder’s Registrable Securities in such registration or
underwritten takedown off the registration statement filed pursuant to the
Mandatory Registration shall be conditioned upon such Holder’s participation in
such underwriting and the inclusion of such Holder’s Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing
to distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company and reasonably acceptable to
the
Institutional Investor, so long as the Institutional Investor and its Affiliates
hold at least 25% of the Shares (determined on an as converted to Common Stock
basis) held by the Institutional Investor and its Affiliates as of the date
hereof, and, in the event the Institutional Investor and its Affiliates do
not
hold at least 25% of the Shares (determined on an as converted to Common Stock
basis) held by the Institutional Investor and its Affiliates as of the date
hereof, then the Holders of a majority of the Registrable Securities; provided
that no holder of Registrable Securities included in any underwritten
registration or underwritten takedown off the registration statement filed
pursuant to the Mandatory Registration shall be required to make any
representations or warranties to the Company or the underwriters (other than
representations and warranties regarding such holder, such holder’s title to the
securities and
5
such
holder’s intended method of distribution) or, without the consent of the
Institutional Investor, to undertake any indemnification obligations to the
Company or the underwriters with respect thereto, except as otherwise provided
in Section 2.9 below.
Notwithstanding
any other provision of this Section 2.1 or Section 2.3, if the
underwriter advises the Company that marketing factors require a limitation
of
the number of securities to be underwritten (including Registrable Securities)
then the Company shall so advise all Holders of Registrable Securities which
would otherwise be underwritten pursuant hereto, and the number of shares that
may be included in the underwriting shall be allocated to the Holders of such
Registrable Securities on a pro rata basis based on the number of Registrable
Securities held by all such Holders (including the Initiating
Holders). Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.
(d) The
Company shall not be required to effect a registration pursuant to this
Section 2.1 other than the Mandatory Registration pursuant to
Section 2.1(b) above: (i) prior to the first anniversary
date on the Closing Date (as defined in the Stock Purchase Agreement);
(ii) after the Company has effected two (2) registrations pursuant to this
Section 2.1, and such registration has been declared or ordered effective
and kept effective by the Company as required by Section 2.5(a) of this
Agreement and at least fifty percent (50%) of the Registrable Securities thereby
are sold; (iii) during the period starting with the date thirty (30) days
prior to the Company’s good faith estimate of the date of filing of, and ending
on a date ninety (90) days after the effective date of, a Company-initiated
registration; provided that the Company is actively employing in good faith
all
reasonable efforts to cause such registration statement to become effective;
(iv) if the Company shall furnish to the Institutional Investor and the
Holders requesting a registration statement pursuant to this Section 2.1, a
certificate signed by the Chairman of the Board stating that in the good faith
and reasonable judgment of the Board of Directors of the Company, the
anticipated offering would be seriously detrimental to the Company and its
stockholders for such registration statement to be effected at such time (but
excluding any detriment to the Company solely as a result of its impact on
the
share price), in which event the Company shall have the right to defer such
filing for a period of not more than ninety (90) days after receipt of the
request of the Institutional Investor or Initiating Holders; provided
that such right to delay a request shall be exercised by the Company not
more than twice in any twelve (12) month period; or (v) if the
Institutional Investor or Initiating Holders propose to dispose of shares of
Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 2.3
below. Notwithstanding the foregoing, any expenses in connection with
such registration or attempted registration shall be Registration
Expenses.
(e) The
Company may include in any such registration other securities for sale for
its
own account or for the account of any other Person; provided that, if
the underwriter for the offering shall determine that the number of shares
proposed to be offered in such offering would be reasonably likely to adversely
affect such offering, then the securities to be sold by the Institutional
Investor and/or the Holders shall be included in such registration before any
securities proposed to be sold for the account of the Company or any other
Person.
(f) The
Company shall not grant to any other Person the right to request the Company
(i) to register any shares of Common Stock in a demand registration unless
such rights
6
are
consistent with the provisions hereof, or (ii) to register any securities
of the Company (other than shares of Common Stock) in a demand
registration.
2.2 Piggyback
Registrations.
(a) Subject
to the terms and conditions of the Lock-up Agreement, the Company shall notify
each Investor who holds, and all Holders of, Registrable Securities in writing
at least ten (10) days prior to the filing of any registration statement under
the Securities Act for purposes of a public offering of securities of the
Company (whether in connection with a public offering of securities by the
Company, a public offering of securities by shareholders of the Company, or
both, but excluding a registration relating solely to employee benefit plans,
or
a registration relating to a corporate reorganization or other transaction
on
Form S-4, or a registration on any registration form that does not permit
secondary sales) and will afford each such Investor and/or Holder an opportunity
to include in such registration statement all or part of such Registrable
Securities held by such Investor and/or Holder as set forth
herein. Each Investor and/or Holder desiring to include in any such
registration statement all or any part of the Registrable Securities held by
such Investor and/or Holder shall, within five (5) days after the
above-described notice from the Company, so notify the Company in
writing. Such notice shall state the intended method of disposition
of the Registrable Securities by such Investor and/or Holder as set forth
herein. If an Investor and/or Holder decides not to include all of
its Registrable Securities in any registration statement thereafter filed by
the
Company, such Investor or Holder shall nevertheless continue to have the right
to include any Registrable Securities in any subsequent registration statement
or registration statements as may be filed by the Company with respect to
offerings of its securities, all upon the terms and conditions set forth
herein.
(b) Underwriting. If
the registration statement under which the Company gives notice under this
Section 2.2 is for an underwritten offering, the Company shall so advise
Investors who hold, and the Holders of, Registrable Securities. In
such event, the right of any such Investor and/or Holder to be included in
a
registration pursuant to this Section 2.2 shall be conditioned upon such
Investor’s or Holder’s participation in such underwriting and the inclusion of
such Investor’s and/or Holder’s Registrable Securities in the underwriting to
the extent provided herein. All Investors and/or Holders proposing to
distribute their Registrable Securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company.
Notwithstanding
any other provision of this Agreement, if the underwriter determines in good
faith that marketing factors require a limitation of the number of shares to
be
underwritten, the number of shares that may be included in the underwriting
shall be allocated first to the Company; second, to all Investors and/or Holders
who are entitled to participate and who have elected to participate in the
offering pursuant to the terms of this Agreement, on a pro rata basis based
upon
the total number of shares held by each such participating Investor or Holder
that are subject to piggyback registration rights pursuant hereto; and third,
to
any other stockholder of the Company on a pro rata basis.
If
any
Investor or Holder disapproves of the terms of any such underwriting, such
Investor or Holder may elect to withdraw therefrom by written notice to the
Company and the
7
underwriter,
delivered at least ten (10) calendar days prior to the effective date of the
registration statement. Any Registrable Securities excluded or
withdrawn from such underwriting shall be excluded and withdrawn from the
registration. For any Investor or Holder which is a partnership or
corporation, the partners, stockholders, subsidiaries, parents and affiliates
of
such Investor or Holder, or the estates and family members of any such partners
and retired partners and any trusts for the benefit of any of the foregoing
Persons shall be deemed to be a single “Investor” or “Holder”, as the case may
be, and any pro rata reduction with respect to such “Investor” or “Holder” shall
be based upon the aggregate amount of shares carrying registration rights owned
by all entities and individuals included in such “Investor” or “Holder”, as
defined in this sentence.
(c) Right
to Terminate Registration. The Company shall have the right to
terminate or withdraw any registration initiated by it under this
Section 2.2 prior to the effectiveness of such registration whether or not
any Investor and/or Holder has elected to include securities in such
registration. The Registration Expenses of such withdrawn
registration shall be borne by the Company in accordance with Section 2.4
hereof.
(d) The
Company shall not grant to any other Person the right to request the Company
(i) to register any shares of Common Stock in a piggyback registration
unless such rights are consistent with the provisions hereof, or (ii) to
register any securities of the Company (other than shares of Common Stock)
in a
piggyback registration.
2.3 Form S-3
Registration. Subject to the Lock-up Agreement, in case the
Company shall receive at any time from (1) the Institutional Investor, so
long as the Institutional Investor and its Affiliates hold at least 25% of
the
Shares (determined on an as converted to Common Stock basis) held by the
Institutional Investor and its Affiliates as of the date hereof, or (2) in
the event the Institutional Investor and its Affiliates do not hold at least
25%
of the Shares (determined on an as converted to Common Stock basis) held by
the
Institutional Investor and its Affiliates as of the date hereof, then the
Holders of at least 50% of the Registrable Securities then outstanding a written
request or requests that the Company effect a registration on Form S-3 (or
any successor to Form S-3) or any similar short-form registration statement
and any related qualification or compliance with respect to all or a part of
the
Registrable Securities owned by the Institutional Investor or such Holder or
Holders, the Company will:
(a) promptly
give written notice of the proposed registration, and any related qualification
or compliance, to all other Holders of Registrable Securities; and
(b) as
soon as practicable, file such registration statement and use its commercially
reasonable efforts to have such registration statement declared effective and
obtain all such qualifications and compliances as may be so requested and as
would permit or facilitate the sale and distribution of all or such portion
of
the Institutional Investor’s or such Holder’s or Holders’ Registrable Securities
as are specified in such request, together with all or such portion of the
Registrable Securities of any other Holder or Holders joining in such request
as
are specified in a written request given within ten (10) days after receipt
of
such written notice from the Company; provided, however, that
the Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to this
Section 2.3: (i) prior to the first anniversary date of the
Closing Date (as defined in the Stock Purchase Agreement);
(ii) if
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Form S-3
is not available for such offering by the Institutional Investor or the Holders;
(iii) if the Institutional Investor and the Holders, together with the
holders of any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other securities
(if any) at an anticipated aggregate offering price to the public of less than
twenty-five million dollars ($25,000,000); or (iv) if the Company shall
furnish to the Institutional Investor and the Holders a certificate signed
by
the Chairman of the Board of Directors of the Company stating that in the good
faith and reasonable judgment of the Board of Directors of the Company, it
would
be seriously detrimental to the Company and its stockholders for such
Form S-3 registration to be effected at such time (but excluding any
detriment to the Company solely as a result of its impact on the share price),
in which event the Company shall have the right to defer the filing of the
Form S-3 registration statement for a period of not more than ninety (90)
days after receipt of the request of the Institutional Investor or the Holder
or
Holders under this Section 2.3; provided, that such right to delay a
request shall be exercised by the Company not more than twice in any twelve
(12)
month period; or (iv) after the Company has effected four (4) registrations
on Form S-3 pursuant to this Section 2.3 and such registrations have
been declared or ordered effective. Notwithstanding the foregoing,
any expenses in connection with such registration or attempted registration
shall be Registration Expenses.
(c) Subject
to the foregoing, the Company shall file a Form S-3 registration statement
covering the Registrable Securities and other securities so requested to be
registered as soon as reasonably practicable after receipt of the request or
requests of the Institutional Investor or such Holders. Registrations
effected pursuant to this Section 2.3 shall not be counted as a demand for
registration or registrations effected pursuant to Sections 2.1 or 2.2,
respectively.
(d) The
Company shall not grant to any other Person the right to request the Company
to
register any shares of Common Stock in an S-3 registration unless such rights
are consistent with the provisions hereof, except in the case of a Form S-3
registration statement filed to register any shares of Common Stock issued
in
connection with any acquisition, merger or similar transaction by the
Company.
2.4 Expenses
of Registration. Except as specifically provided herein, all
Registration Expenses incurred in connection with any registration,
qualification or compliance hereunder shall be borne by the
Company. All Selling Expenses incurred in connection with any
registrations hereunder, shall be borne by the holders of the securities so
registered pro rata on the basis of the number of shares so
registered. The Company shall not, however, be required to pay for
expenses of any registration proceeding begun pursuant to Section 2.1 or
2.3, the request of which has been subsequently withdrawn by the Institutional
Investor or the Initiating Holders or requesting Holder(s) unless (a) the
Company has requested the Institutional Investor or the Initiating Holders
or
requesting Holder(s) to withdraw such request or the Company and the
Institutional Investor, Initiating Holders or requesting Holders(s) jointly
determine that such request should be withdrawn, (b) the withdrawal is
based upon material adverse information concerning the Company that the Company
had not publicly revealed at least forty-eight (48) hours prior to the request
or that the Company had not otherwise notified the Institutional Investor or
the
Initiating Holders or requesting Holders of at the time of such request or
(c) the Institutional Investor or the Holders of a majority of Registrable
Securities, as the case may be, agree to forfeit their right to one requested
registration pursuant to Section 2.1 or Section 2.3, as applicable, in
which event such right shall be forfeited by all Holders.
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If
the
Institutional Investor and/or the Holders are required to pay the Registration
Expenses, such expenses shall be borne by the Institutional Investor or the
Holders of securities (including Registrable Securities) requesting such
registration in proportion to the number of shares for which registration was
requested. If the Company is required to pay the Registration
Expenses of a withdrawn offering pursuant to clause (a) above, then the
Institutional Investor or the Holders, as the case may be, shall not forfeit
their rights pursuant to Section 2.1 or Section 2.3.
2.5 Obligations
of the Company. In the Mandatory Registration and whenever
required to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Subject
to Section 2.1(b) in the case of the Mandatory Registration, prepare and
file with the SEC a registration statement, and all amendments and supplements
thereto and related prospectuses as may be necessary to comply with applicable
securities laws, with respect to such Registrable Securities and use its best
efforts to cause such registration statement to become effective (provided
that
before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company shall furnish to the counsel selected by the
Holders of a majority of the Registrable Securities covered by such registration
statement copies of all such documents proposed to be filed, and the Company
shall in good faith consider any comments of such counsel).
(b) Prepare
and, within 60 days after the end of the period within which requests for
registration have been given to the Company, file with the SEC a registration
statement with respect to such Registrable Securities and use all reasonable
best efforts to cause such registration statement to become effective (provided
that, before filing a registration statement or prospectus or any amendments
or
supplements thereto, the Company shall furnish to the counsel selected by the
holders of a majority of Registrable Securities covered by such registration
statement copies of all such documents proposed to be filed, and the Company
shall in good faith consider any comments of such counsel), notify in writing
each Holder of the effectiveness of each registration statement filed hereunder,
and, upon the request of the Holders of a majority of the Registrable Securities
registered thereunder, keep such registration statement effective for up to
one
hundred and eighty (180) days or, if earlier, until the Holder or Holders have
completed the distribution related thereto (or, in the case of a Shelf
Registration, a period ending on such date as is the earlier of (i) the
date on which all Registrable Securities included in the registration statement
shall have been sold or shall have otherwise ceased to be Registrable Securities
and (ii) the date on which all remaining Registrable Securities may be sold
during any ninety (90) day period without any restriction pursuant to
Rule 144 under the Securities Act, other than Rule 144(k), after
taking into account any holders’ status as an affiliate of the Company as
determined by the counsel to the Company pursuant to a written opinion letter
addressed to the Company’s transfer agent to such effect).
(c) Prepare
and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statement
as may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement for the period set forth in paragraph (a) above.
10
(d) Furnish
to the Investors and Holders such number of copies of a prospectus, including
a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(e) Use
its commercially reasonable efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue
Sky
laws of such jurisdictions as shall be reasonably requested by the Holders;
provided that the Company shall not be required in connection therewith or
as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(f) In
the event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter(s) of such offering. Each Investor and/or
Holder participating in such underwriting shall also enter into and perform
its
obligations under such an agreement.
(g) Notify
each Investor who holds, and each Holder of, Registrable Securities covered
by
such registration statement at any time when a prospectus relating thereto
is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement,
as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing
and, at the request of the holders of a majority of the Registrable Securities
covered by such registration statement, the Company shall promptly prepare
and
furnish to each such seller a reasonable number of copies of a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus shall not contain an untrue
statement of a material fact or omit to state any fact necessary to make the
statements therein not misleading in light of the circumstances under which
they
were made.
(h) Use
its commercially reasonable efforts to furnish, on the date that such
Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, (i) an opinion, dated as of
such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters
in
an underwritten public offering, addressed to the underwriters, if any, and
(ii) a letter dated as of such date, from the independent registered public
accountants of the Company, in form and substance as is customarily given by
independent registered public accountants to underwriters in an underwritten
public offering addressed to the underwriters.
(i) In
the event of the issuance of any stop order suspending the effectiveness of
a
registration statement, or any order suspending or preventing the use of any
related prospectus or suspending the qualification of any equity securities
included in such registration statement for sale in any jurisdiction, the
Company shall use its reasonable best efforts promptly to obtain the withdrawal
of such order.
2.6 Suspension
of Sales. Upon receipt of written notice from the Company that a
registration statement or prospectus contains 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
11
misleading
(a “Misstatement”), each Investor who holds, and each Holder
of, Registrable Securities shall forthwith discontinue disposition of
Registrable Securities until such Investor and/or Holder has received copies
of
the supplemented or amended prospectus that corrects such Misstatement, or
until
such Investor and/or Holder is advised in writing by the Company that the use
of
the prospectus may be resumed, and, if so directed by the Company, such Investor
and/or Holder shall deliver to the Company (at the Company’s expense) all
copies, other than permanent file copies then in such Investor’s or Holder’s
possession, of the prospectus covering such Registrable Securities current
at
the time of receipt of such notice. The total number of days that any
such suspension may be in effect in any 180 day period shall not exceed 45
days.
2.7 Termination
of Registration Rights. An Investor’s and a Holder’s registration
rights shall expire if all Registrable Securities held by such Investor or
Holder (and its Affiliates, partners, members and former members) may be sold
without any restriction under Rule 144 under the Securities Act, other than
Rule 144(k), during any ninety (90) day period after taking into account
any Holders’ status as an affiliate of the Company as determined by the counsel
to the Company pursuant to a written opinion letter addressed to the Company’s
transfer agent to such effect.
2.8 Delay
of Registration; Furnishing Information.
(a) No
Investor or Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 2.
(b) It
shall be a condition precedent to the obligations of the Company to take any
action pursuant to Section 2.1, 2.2 or 2.3 that the selling Investors
and/or Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them and the intended method
of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities.
(c) The
Company shall have no obligation with respect to any registration requested
pursuant to Section 2.1 or Section 2.3 (except that any expenses in
connection with such registration or attempted registration shall be
Registration Expenses) if the number of shares or the anticipated aggregate
offering price of the Registrable Securities to be included in the registration
does not equal or exceed the number of shares or the anticipated aggregate
offering price required to originally trigger the Company’s obligation to
initiate such registration as specified in Section 2.1 or Section 2.3,
whichever is applicable.
2.9 Indemnification. In
the event any Registrable Securities are included in a registration statement
under this Section 2:
(a) To
the extent permitted by law, the Company will indemnify and hold harmless each
Investor, Holder, any underwriter (as defined in the Securities Act) for such
Investor or Holder and each person, if any, who controls such Investor or Holder
or underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Securities Act, or the Exchange Act or other
federal or state law, insofar as such losses, claims, damages, or
12
liabilities
(or actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively, a
“Violation”): (i) any untrue statement or
alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law; and
the
Company will pay to each such Investor, Holder, underwriter or controlling
person, as accrued 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 the indemnity
agreement contained in this Section 2.9(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 shall the Company be liable in any such
case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and
in
conformity with written information furnished expressly for use in connection
with such registration statement by any such Investor, Holder, underwriter
or
controlling person.
(b) To
the extent permitted by law and provided that such Holder is not entitled to
indemnification pursuant to Section 2.9(a) above with respect to such
matter, each selling Investor or Holder (severally and not jointly) 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 Securities Act, any underwriter,
any other Investor or Holder selling securities in such registration statement
and any controlling person of any such underwriter or other Investor or Holder,
against any losses, claims, damages, or liabilities to which any of the
foregoing persons may become subject under the Securities Act, the Exchange
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
(i) untrue statement or alleged untrue statement of a material fact
regarding such Holder and provided in writing by such Holder which is 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 to make the statements therein
not
misleading, in each case to the extent (and only to the extent) that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in such registration statement, preliminary or final prospectus, amendment
or
supplement thereto, in reliance upon and in conformity with written information
furnished by such Investor or Holder expressly for use in connection with such
registration statement; and each such Investor or Holder will pay, as accrued,
any legal or other expenses reasonably incurred by any Person intended to be
indemnified pursuant to this Section 2.9(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action
as
a result of such Holder’s untrue statement or omission; provided,
however, that the indemnity agreement contained in this
Section 2.9(b) 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 Investor or Holder (which consent shall not be unreasonably
withheld); provided, that, (x) the indemnification obligations in this
Section 2.9(b) shall be individual and ratable not joint and
13
several
for each Holder and (y) in no event shall the aggregate of all
indemnification payments by any Investor and/or Holder under this
Section 2.9(b) exceed the net proceeds from the offering received by such
Investor and/or Holder.
(c) Promptly
after receipt by an indemnified party under this Section 2.9 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 2.9, deliver to the indemnifying
party a written notice of the commencement thereof and the indemnifying party
shall 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) shall have the right to retain one separate counsel, with the
reasonable fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by
such
counsel in such proceeding. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement of any
such
action shall not relieve such indemnifying party of any liability to the
indemnified party under this Section 2.8, except to the extent such failure
to give notice has a material adverse effect on the ability of the indemnifying
party to defend such action.
(d) If
the indemnification provided for in this Section 2.9 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect
to
any loss, liability, claim, damage, or expense referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall 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 shall
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. Notwithstanding the foregoing, the amount any Investor or
Holder will be obligated to contribute pursuant to this Section 2.9(d) will
be limited to an amount equal to the per share public offering price (less
any
underwriting discount and commissions) multiplied by the number of shares of
Registrable Securities sold by such Investor or Holder pursuant to the
registration statement which gives rise to such obligation to contribute (less
the aggregate amount of any damages which such Investor or Holder has otherwise
been required to pay in respect of such loss, liability, claim, damage, or
expense or any substantially similar loss, liability, claim, damage, or expense
arising from the sale of such Registrable Securities). No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) will be entitled to contribution hereunder from any
person who was not guilty of such fraudulent misrepresentation.
14
(e) Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection
with the underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall control; provided
that the indemnification provisions of the Holders in any underwriting agreement
may not conflict with the provisions of this Section 2.9 without the
consent of the Institutional Investor.
(f) The
obligations of the Company and Holders under this Section 2.9 shall survive
the completion of any offering of Registrable Securities in a registration
statement under this Section 2, and otherwise.
2.10 Assignment
of Registration Rights. The rights to cause the Company to
register Registrable Securities pursuant to this Agreement may be assigned
by an
Investor or Holder to a transferee or assignee of Registrable Securities to
which (a) there is transferred to such transferee no less than twenty
thousand (20,000) shares of Registrable Securities, appropriately adjusted
to
reflect any stock splits, stock dividends, subdivisions, reverse splits and
similar events, (b) there is transferred to such transferee at least ten
percent (10%) of the shares of Registrable Securities held by the Investor
or
Holder, (c) such transferee is an Affiliate, subsidiary or parent company,
family member or family trust for the benefit of a party hereto, or
(d) such transferee or transferees are partners of an Investor or Holder,
who agree to act through a single representative; provided,
however, (i) the transferor shall furnish to the Company written
notice of the name and address of such transferee or assignee and the securities
with respect to which such registration rights are being assigned and
(ii) such transferee shall agree to be subject to all restrictions set
forth in this Agreement.
2.11 “Market
Stand-Off’ Agreement; Agreement to Furnish Information. Each
Investor and Holder hereby agrees that such Investor and/or Holder shall not
sell, transfer, make any short sale of, grant any option for the purchase of,
or
enter into any hedging or similar transaction with the same economic effect
as a
sale, any Common Stock (or other securities) of the Company held by such
Investor or Holder (other than those included in the registration) for a period
specified by the representative of the underwriters of Common Stock (or other
securities) of the Company not to exceed ten (10) days prior and ninety (90)
days following the effective date of a registration statement of the Company
filed under the Securities Act; provided that all executive officers and
directors of the Company enter into similar agreements and only if such Persons
remain subject thereto (and are not released from such agreement) for such
90
day period. Each Investor and Holder agrees to execute and deliver
such other agreements as may be reasonably requested by the Company or the
underwriter which are consistent with the foregoing or which are necessary
to
give further effect thereto.
In
addition, if requested by the Company or the representative of the underwriters
of Common Stock (or other securities) of the Company, each Investor and Holder
shall provide, within ten (10) days of such request, such information as may
be
required by the Company or such representative in connection with the completion
of any public offering of the Company’s securities pursuant to a registration
statement filed under the Securities Act.
The
obligations described in this Section 2.11 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or
Form S-8 or similar forms that may be
15
promulgated
in the future, or a registration relating solely to a Commission Rule 145
transaction on Form S-4 or similar forms that may be promulgated in the
future. The Company may impose stop-transfer instructions with
respect to the shares of Common Stock (or other securities) subject to the
foregoing restriction until the end of said 90 day period. Each
Investor and Holder agrees that any transferee of any shares of Registrable
Securities shall be bound by this Section 2.11.
2.12 Rule 144
Reporting. With a view to making available to the Investors and
Holders the benefits of certain rules and regulations of the SEC which may
permit the sale of the Registrable Securities to the public without
registration, the Company agrees to use its best efforts to:
(a) make
and keep public information available, as those terms are understood and defined
in SEC Rule 144 or any similar or analogous rule promulgated under the
Securities Act, at all times after the effective date of this
Agreement;
(b) file
with the SEC, in a timely manner, all reports and other documents required
of
the Company under the Exchange Act; and
(c) so
long as an Investor or Holder owns any Registrable Securities, furnish to such
Investor or Holder forthwith upon request: a written statement by the Company
as
to its compliance with the reporting requirements of Rule 144 under the
Securities Act, and of the Exchange Act; a copy of the most recent annual or
quarterly report of the Company; and such other reports and documents as an
Investor or Holder may reasonably request in availing itself of any
rule or regulation of the SEC allowing it to sell any such securities without
registration.
SECTION 3 PREEMPTIVE
RIGHTS OF INSTITUTIONAL INVESTOR
3.1 Sale
of New Stock. Until the date on which the Institutional Investor
and its Affiliates collectively own less than five percent (5.0%) of the
outstanding Common Stock of the Company (assuming conversion of the
Series A Stock), if the Company at any time or from time to time makes a
Qualified Equity Offering, the Institutional Investor and its Affiliates shall
be afforded the opportunity to acquire from the Company for the same price
and
on the same terms as such securities are proposed to be offered to others,
in
the aggregate up to the amount of New Stock required to enable it to maintain
its Institutional Investor Percentage Interest.
3.2 Notice.
(a) In
the event the Company intends to make a Qualified Equity Offering that is an
underwritten public offering or a private offering made to Qualified
Institutional Buyers for resale pursuant to Rule 144A under the Securities
Act, no later than five (5) business days after the initial filing of a
registration statement with the SEC with respect to such underwritten public
offering or the commencement of marketing with respect to such Rule 144A
offering, it shall give Institutional Investor written notice of its intention
(including, in the case of a registered public offering and to the extent
possible, a copy of the prospectus included in the registration statement filed
in respect of such offering) describing, to the extent then known, the
anticipated amount of securities, range of prices, timing and other material
terms of such offering. Institutional Investor shall have ten (10)
calendar days from the date of receipt of any such notice
16
to
notify
the Company in writing that it and/or its Affiliates intend to exercise such
preemptive purchase rights and as to the amount of New Stock Institutional
Investor and its Affiliates desire to purchase, up to the maximum amount
calculated pursuant to Section 3.1 (including any over-allotment options if
applicable) (the “Designated Stock”). Such notice
shall constitute a non-binding indication of interest of Institutional Investor
and its Affiliates to purchase the Designated Stock so specified at the range
of
prices and other terms set forth in the Company’s notice to it. The
failure to respond during such ten (10) calendar day period shall constitute
a
waiver of preemptive rights in respect of such offering.
(b) If
the Company proposes to make a Qualified Equity Offering that is not an
underwritten public offering or Rule 144A offering (a “Private
Placement”), the Company shall give Institutional Investor written
notice of its intention, describing, to the extent then known, the anticipated
amount of securities, price and other material terms upon which the Company
proposes to offer the same. Institutional Investor shall have ten
(10) calendar days from the date of receipt of the notice required by the
immediately preceding sentence to notify the Company in writing that it and/or
its Affiliates intend to exercise such preemptive purchase rights and as to
the
amount of Designated Stock Institutional Investor and its Affiliates desire
to
purchase, up to the maximum amount calculated pursuant to
Section 3.1. Such notice shall constitute the binding agreement
of Institutional Investor and/or its Affiliates to purchase the amount of
Designated Stock so specified (or a proportionately lesser amount if the amount
of New Stock to be offered in such Private Placement is subsequently reduced)
upon the price and other terms set forth in the Company’s notice to
it. The failure of Institutional Investor to respond during the ten
(10) calendar day period referred to in the second preceding sentence shall
constitute a waiver of the preemptive rights in respect of such
offering.
3.3 Purchase
Mechanism.
(a) If
Institutional Investor exercises its preemptive rights provided in
Section 3.2(b), the closing of the purchase of the New Stock with respect
to which such right has been exercised shall be conditioned on the consummation
of the Private Placement giving rise to such preemptive purchase rights and
shall take place simultaneously with the closing of the Private Placement or
on
such other date as the Company and the Institutional Investor shall agree in
writing; provided, that the actual amount of Designated Stock to be sold to
the
Institutional Investor and its Affiliates pursuant to its exercise of preemptive
rights hereunder shall be reduced proportionately if the aggregate amount of
New
Stock sold in the Private Placement is reduced and, at the option of the
Institutional Investor (to be exercised by delivery of written notice to the
Company within five (5) business days of receipt of notice of such increase),
shall be increased proportionately if such aggregate amount of New Stock sold
in
the Private Placement is increased. In connection with its purchase
of Designated Stock, Institutional Investor shall execute an instrument in
form
and substance reasonably satisfactory to the Company containing representations,
warranties and agreements of Institutional Investor that are customary for
private placement transactions.
(b) If
the Institutional Investor exercises its preemptive purchase rights provided
in
Section 3.2(a), the Company shall offer the Institutional Investor and its
Affiliates, if such underwritten public offering or Rule 144A offering is
consummated, the Designated Stock (as adjusted to reflect the actual size of
such offering when priced) at the same price as the New
17
Stock
is
offered to the underwriters or initial purchasers and shall provide written
notice of such price to Institutional Investor as soon as practicable prior
to
such consummation. Contemporaneously with the execution of any
underwriting agreement or purchase agreement entered into between the Company
and the underwriters or initial purchasers of such underwritten public offering
or Rule 144A offering, Institutional Investor shall enter into an
instrument in form and substance reasonably satisfactory to the Company
acknowledging Institutional Investor’s and/or its Affiliate’s binding
obligations to purchase the Designated Stock to be acquired by it and/or its
Affiliates and containing representations, warranties and agreements of
Institutional Investor that are customary in private placement transactions,
and
the failure to enter into such an instrument at or prior to such time shall
constitute a waiver of preemptive rights in respect of such
offering. Any offers and sales pursuant to this Section 3 in the
context of a registered public offering shall be also conditioned on reasonably
acceptable representations and warranties of the Institutional Investor
regarding its status as the type of offeree to whom a private sale can be made
concurrently with a registered offering in compliance with applicable securities
laws.
(c) Upon
the expiration of the offering periods described in Section 3.2 above, the
Company shall be entitled to sell such stock or securities which the
Institutional Investor and its Affiliates have not elected to purchase during
the 90 days following such expiration at a price not less and on other
terms and conditions not more favorable to the purchasers thereof than that
offered to the Institutional Investor and its Affiliates. Any stock
or securities offered or sold by the Company after such 90-day period must
be
reoffered to the Institutional Investor and its Affiliates pursuant to the
terms
of this Section 3.2.
(d) Notwithstanding
any provision in this Agreement to the contrary, in the event that the
Institutional Purchaser and its Affiliates are entitled to acquire Common Stock
pursuant to this Section 3, then the Institutional Purchaser and its
Affiliates may at their option acquire securities in the form of Series A Stock
or another series of preferred stock of the Corporation with terms, conditions
and provisions that shall be established upon the issuance of such preferred
stock that are similar to and consistent with the terms, conditions and
provisions upon which the Series A Stock was established.
3.4 No
Negotiation Right. The Institutional Investor shall not have any
rights to participate in the negotiation of the proposed terms of any Private
Placement, underwritten public offering or Rule 144A offering.
3.5 Cooperation. The
Company and the Institutional Investor shall cooperate in good faith to
facilitate the exercise of the Institutional Investor’s preemptive rights
hereunder, including securing any required approvals or consents, in a manner
that does not jeopardize the timing, marketing, pricing or execution of any
offering of the Company’s securities.
3.6 Limitation
of Rights. Notwithstanding the above, nothing set forth in this
Section 3 shall confer upon the Institutional Investor the right to
purchase any shares of any equity securities of the Company other than Common
Stock, Series A Stock, preferred stock or other securities convertible into
or exchangeable for shares of Common Stock or which have voting rights or
participation features with Common Stock of the Company, and in no event shall
the issuance of shares of Common Stock by the Company as consideration pursuant
to any
18
acquisition
(whether structured as a merger or otherwise) (but not an offering to raise
capital to fund an acquisition) or pursuant to the terms and provisions of
any
current or future equity compensation or employee benefit plan of the Company
or
otherwise approved by the Board other than through a Qualified Equity Offering
be deemed included in any right granted to Institutional Investor under this
Section 3.
SECTION 4 MISCELLANEOUS
4.1 Successors
and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties (including transferees
of
any shares of Registrable Securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
4.2 Governing
Law. This Agreement shall be governed by and construed under the
laws of the State of Illinois as applied to agreements among Illinois residents
entered into and to be performed entirely within the State of
Illinois.
4.3 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.
4.4 Titles
and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
4.5 Notices. Unless
otherwise provided, any notice required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given upon personal delivery
to the party to be notified or upon deposit with the United States Post Office,
by registered or certified mail, postage prepaid and addressed to the party
to
be notified at the address indicated for such party on the signature page
hereof, or at such other address as such party may designate by ten (10) days’
advance written notice to the other parties.
4.6 Expenses. If
any action at law or in equity is necessary to enforce or interpret the terms
of
this Agreement, the prevailing party shall be entitled to reasonable attorneys’
fees, costs and necessary disbursements in addition to any other relief to
which
such party may be entitled.
4.7 Amendments
and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or
in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company, the Institutional Investor so long as the
Institutional Investor holds Registrable Securities, and the holders of a
majority of the Registrable Securities then outstanding. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each Holder of any Registrable Securities then outstanding, each future
Holder of all such Registrable Securities, and the Company.
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4.8 Severability. If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
4.9 Aggregation
of Stock. All shares of Registrable Securities held or acquired
by any Investors which are Affiliates shall be aggregated together for the
purpose of determining the availability of any rights under this
Agreement.
4.10 Entire
Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth in the first paragraph hereof.
| By: |
| Name: | ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| Title: |
President
and Chief Executive
Officer
|
|
| Address: |
▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General
Counsel
|
|
[Individually List each Investor]
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||
| By: |
| Name: | ||
| Title: |
|
|
| Address: |
|
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