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EXHIBIT 10.20
Form of Registration Rights Agreement
February 1998 Private Placement
1. Demand Registration of Registrable Securities
a. Requests for Registration. Subject to the provisions of Section
2(b) hereof, the Investors may make a written request (the "Registration
Request") to the Company for registration under and in accordance with the
provisions of the Securities Act of all or part of their Registrable
Securities (the "Demand Registration"). Upon receipt of a Registration
Request by Investors holding a majority of the Shares sold pursuant to the
Memorandum, the Company shall as promptly as practicable, and in no event
later than one hundred twenty (120) days after the Registration Request is
made, prepare and file with the SEC a Registration Statement covering all
of the Registrable Securities requested to be included by the Investors.
The Registration Request made pursuant to this section shall specify the
number of shares of the Registrable Securities to be registered and shall
also specify the intended methods of disposition thereof.
b. Number of Demand Registrations. The Company shall be obligated to
effect not more than one (1) Demand Registration.
c. Priority on Demand Registration. If the Registrable Securities
registered pursuant to the Demand Registration are to be sold in one or
more firm commitment underwritten offerings, and the managing underwriter
or underwriters advise the Company and the Investors in writing that in
their opinion the total number or dollar amount of Registrable Securities
requested to be included in such registration is sufficiently large to
adversely affect the success of such offering, the Company shall include,
on behalf of the Investors, in such firm commitment underwritten offering
the number of shares of Registrable Securities which, in the opinion of
such managing underwriter or underwriters, can be sold without any adverse
affect on the offering.
d. Withdrawal. The Investor may, before such Registration Statement
becomes effective, withdraw its Registrable Securities from sale, should
the terms of sale not be reasonably satisfactory to it; however, such
Demand Registration shall be deemed to have occurred for the purposes of
Section 2(b) hereof, unless such withdrawal is
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more than 5 days prior to the effective date of such Registration
Statement. If there is no other seller after the withdrawal of the
Investor, the Investor shall pay all of the out-of-pocket expenses of the
Company incurred in connection with such registration within thirty (30)
days after receipt of a written itemization of such expenses.
e. Selection of Underwriters. If the Demand Registration is in the
form of an underwritten offering, the Company will select and obtain the
investment banker or investment bankers and manager or managers that will
administer the offering.
2. Piggyback Registrations
a. Right to Piggyback. Whenever the Company proposes (whether or not
for its own account) to register any of its equity securities under the
Securities Act except with respect to a registration statement (i) on Form
S-8 or any successor form to such Form or (ii) filed in connection with an
exchange offer or relating to a transaction pursuant to Rule 145 of the
Securities Act, the Company shall give written notice to the Investor of
its intention to effect such a registration not later than thirty (30) days
prior to the anticipated date of filing with the SEC of a Registration
Statement with respect to such registration. Such notice shall offer the
Investor the opportunity to include in such Registration Statement such
Registrable Securities as the Investor may request (a "Piggyback
Registration"). Subject to the provisions of Sections 3(b) and 3(c) hereof,
the Company shall include in each such Piggyback Registration all
Registrable Securities with respect to which the Company has received a
written request for inclusion therein within fifteen (15) days after the
receipt by the Investor of the Company's notice. No registration effected
pursuant to a request or requests referred to in this Section 3 shall be
deemed Demand Registrations pursuant to Section 4. Upon the giving of
notice of a proposed registration by the Company pursuant to this Section
3(a), the Investor may exercise only its rights to Piggyback Registration
and not Demand Registration as to the Company's proposed registration.
b. Priority on Primary Registration. If a Piggyback Registration is
being made with respect to an underwritten primary registration on behalf
of the Company and the managing underwriter or underwriters advise the
Company in writing that in their opinion the total number or dollar amount
of securities of any class requested to be included in such registration is
sufficiently large to adversely affect the success of such offering, the
Company shall include in such registration: (1) first,
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all securities the Company proposes to sell to the public, the proceeds of
which shall go to the Company, (2) second, up to the full number of
Registrable Securities requested to be included in such registration in
excess of the number or dollar amount of securities the Company proposes to
sell which, in the opinion of such managing underwriter or underwriters,
can be sold without adversely affecting the offering.
c. Priority on Secondary Registrations. If a Piggyback Registration
is being made with respect to an underwritten secondary registration on
behalf of holders of the securities of the Company, and the managing
underwriters advise the Company in writing that in their opinion the dollar
amount or number of securities of any class requested to be included in
such registration is sufficiently large to adversely affect the success of
such offering, the Company shall include in such registration (1) first, up
to the full number of securities requested to be included therein by
holders exercising demand registration rights which in the opinion of such
underwriter can be sold without adversely affecting the offering and (2)
second, up to the full number of Registrable Securities requested to be
included in such registration in excess of the number or dollar amount of
securities which holders exercising demand registration rights propose to
sell, which, in the opinion of such managing underwriter or underwriters,
can be sold without adversely affecting the offering.
3. Hold-Back Agreements
a. Restrictions on Public Sale by the Investor. The Investor agrees,
if requested by the managing underwriter or underwriters in any
underwritten offering (to the extent timely notified in writing by the
Company or the managing underwriter or underwriters) of the Company's
securities covered by a Registration Statement, not to effect any public
sale or distribution of any Registrable Securities not included in such
Registration Statement, including a sale pursuant to Rule 144 under the
Securities Act (except as part of such underwritten registration), during
the ten (10) day period prior to, and during the forty-five (45) day period
beginning on, the effective date of each underwritten offering made
pursuant to such Registration Statement, provided that Investor shall not
be obligated to delay the public sale or distribution of Registrable
Securities for a period in excess of one hundred ten (110) days in any
twelve-month period. Such forty-five (45) day period shall be extended with
regard to the Registrable Securities to such longer period as may be agreed
to in writing by the Investor.
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The foregoing provisions shall not apply to the Investor if it is
prevented by applicable statute or regulation from entering into any such
agreement; provided that the Investor shall undertake, in its request to
participate in any such underwritten offering, not to effect any public
sale or distribution of the applicable Registrable Securities commencing on
the date of sale of such applicable class of Registrable Securities
pursuant to such a Registration Statement unless it has provided forty-five
(45) days prior written notice of such sale or distribution to the managing
underwriter or underwriters.
b. Restrictions on Public Sale by the Company and Others. The
Company agrees, (i) without the written consent of the managing underwriter
or underwriters in an underwritten offering of Registrable Securities
covered by a Registration Statement filed by the Company pursuant to
Section 2 or 3 hereof, not to effect any public or private sale or
distribution of its securities, including a sale pursuant to Regulation D
under the Securities Act, during the ten (10) day period prior to, and
during the one hundred fifty (150) day period beginning on, the effective
date of an underwritten offering made pursuant to a Registration Statement
(except as part of such underwritten registration or pursuant to
registrations on Form S-8 or any successor form or relating to a
transaction pursuant to Rule 145 of the Securities Act) and (ii) to use its
best efforts to obtain the written agreement of, and to cause each holder
of more than five percent (5%) of any class of its securities purchased
from it at any time (other than in a registered public offering) not to
effect any registration, public sale or distribution of any such securities
during such period, including a sale pursuant to Rule 144 under the
Securities Act (except as part of such underwritten registration, if
otherwise permitted).
4. Registration Procedures
In connection with the Company's obligations to file a
Registration Statement pursuant to Section 2 hereof, the Company shall use
its reasonable best efforts to effect such registration to permit the sale
of such Registrable Securities in accordance with the intended method or
methods of disposition thereof, and pursuant thereto the Company shall as
expeditiously as practicable:
a. Filing; Review - prepare and file with the SEC as soon as
practical, but in no event later than the time periods specified herein a
Registration Statement relating to the Demand Registration on any
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appropriate form under the Securities Act, which form shall be available
for the sale of the Registrable Securities in accordance with the intended
method or methods of distribution thereof, and use its reasonable best
efforts to cause such Registration Statement to become effective and remain
effective as provided herein;
b. Amendments; Supplements - prepare and file with the SEC such
amendments and post-effective amendments to a Registration Statement as may
be necessary to keep such Registration Statement continuously effective for
the applicable period; cause the related Prospectus to be supplemented by
any required prospectus supplement and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended
methods of disposition by the sellers thereof set forth in such
Registration Statement or supplement to such Prospectus;
c. Notice of Events - notify the Investor, its counsel and the
managing underwriters, if any, promptly, and (if requested by any such
Person) confirm such notice in writing, (1) when a Prospectus or any
prospectus supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment, when
the same has become effective, (2) of any request by the SEC for amendments
or supplements to a Registration Statement or related Prospectus or for
additional information to be included in any Registration Statement or
Prospectus or otherwise, (3) of the issuance by the SEC of any stop order
suspending the effectiveness of a Registration Statement or the initiation
of any proceedings for that purpose, (4) if at any time the representations
and warranties of the Company contemplated by paragraph (m) below cease to
be true and correct, (5) of the receipt by the Company of any notification
with respect to the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (6) of the happening of any
event which makes any statement made in the Registration Statement, the
Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue or which requires the making of any changes in
the Registration Statement or Prospectus so that they shall not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
(with respect to a
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Prospectus, in light of the circumstances in which they were made) not
misleading, and (7) of the reasonable determination of the Company that a
post-effective amendment to a Registration Statement would be appropriate;
d. Suspension - make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of a Registration
Statement or the lifting of any suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale
in any jurisdiction, as soon as practicable;
e. Additional Information - if requested by the managing
underwriters, if any, or the Investor, to immediately incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriters, if any, and the Investor agree should be included
therein as required by applicable law; and make all required filings of
such prospectus supplement or post-effective amendment as soon as
practicable after the Company has received notification of the matters to
be incorporated therein; provided, however, that the Company shall not be
required to take any of the actions in this Section 5(d) which are not, in
the opinion of counsel for the Company, in its sole discretion, in
compliance with applicable law;
f. Copies - furnish to the Investor and each managing underwriter,
without charge, a copy of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, all
documents incorporated therein by reference and all exhibits (including
those incorporated by reference);
g. Prospectuses - deliver to the Investor and to the underwriters,
if any, without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as may be
reasonably requested; the Company consents to the use of such Prospectus or
any amendment or supplement thereto by the Investor and the underwriters,
if any, in connection with the offering and sale of the Registrable
Securities covered by such Prospectus or any amendment or supplement
thereto;
h. Blue Sky - prior to any public offering of Registrable
Securities, register or qualify or cooperate with the Investor, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification of such Registrable Securities for offer and
sale under the securities or blue sky laws of such jurisdictions within the
United States
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as the Investor or underwriter reasonably requests in writing, keep each
such registration or qualification effective during the period such
Registration Statement is required to be kept effective and do any and all
other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; provided that the Company shall not be required to
qualify to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service
of process in any such jurisdiction where it is not then so subject;
i. Certificates - cooperate with the Investor and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing
any restrictive legends; and enable such Registrable Securities to be in
such denominations and registered in such names as the managing
underwriters may request at least two (2) business days prior to any sale
of Registrable Securities to the underwriters;
j. Corrections - upon the occurrence of any event contemplated by
Section 5(c)(6) above, prepare a supplement or post-effective amendment to
the applicable Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable
Securities being sold thereunder, such Prospectus shall not contain an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading;
k. Listing - if requested in writing by the Investor, use its
reasonable best efforts to cause all Registrable Securities covered by the
Registration Statement to be listed on each securities exchange, if any, on
which similar securities issued by the Company are then listed;
l. CUSIP; Transfer Agent; Registrar - provide a CUSIP number,
transfer agent and registrar for all Registrable Securities being
registered, not later than the effective date of the applicable
Registration Statement covering such securities;
m. Other Agreements; Opinions - enter into such agreements
(including an underwriting agreement in form, scope and substance as
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is customary in underwritten offerings) and take all such other actions as
the Investor or the underwriters, if any, may reasonably request, or any
and all such other actions reasonably required in connection therewith in
order to expedite or facilitate the disposition of such Registrable
Securities and in such connection, whether or not an underwriting agreement
is entered into and whether or not the registration is an underwritten
registration, (1) make such representations and warranties, if any, to the
Investor and to enter into any indemnity arrangement with the underwriters
in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same if and when
reasonably requested; (2) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions shall be reasonably
satisfactory in form, scope and substance to the managing underwriters, if
any, or if the offering is not underwritten, then to Investor's counsel)
addressed to the Investor covering the matters customarily covered in
opinions requested in underwritten offerings; (3) use its best efforts to
obtain "cold comfort" letters and updates thereof from the Company's
independent certified public accountants addressed to the underwriters, if
any, such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters obtained by underwriters in
connection with underwritten offerings; and (4) the Company shall deliver
such documents and certificates as may be reasonably requested by the
Investor or the managing underwriters, if any, to evidence compliance with
clause (j) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company. The
above shall be done at each closing under such underwriting or similar
agreement or as to the extent required thereunder;
n. Access - make available for inspection by a representative of the
Investor, any underwriter, if any, and any attorney, accountant or other
agent retained by the Investor or underwriter, all pertinent financial and
other records, corporate documents and properties of the Company
(collectively "Records"), and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with such
Registration Statement; provided that any Records which the Company
determines to be confidential and which it notifies the representative,
underwriter, attorney or accountant are confidential, shall not be
disclosed by such individuals unless (i) such Records are in the public
domain or (ii) disclosure of
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such Records is required by court or administrative order or applicable
law;
o. Other Agencies - use its reasonable best efforts to cause the
Registrable Securities covered by each Registration Statement to be
registered with or approved by such other government agencies or
authorities as may be necessary to the Investor or the underwriters, if
any, to consummate the disposition of such Registrable Securities in the
United States;
p. Compliance - use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC and make generally available to
its security holders earning statements satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder, no later than
forty-five (45) days after the end of any twelve (12) month period (or
ninety (90) days after the end of any twelve (12) month period if such
period is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm commitment
or best efforts underwritten offering and (ii) if not sold to underwriters
in such an offering, commencing on the first day of the first fiscal
quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said twelve (12) month periods; and
q. Certificates - on or before the effective date of a registration,
provide the transfer agent with printed certificates for the Registrable
Securities which are in a form eligible for deposit with The Depositary
Trust Company.
The Company may require the Investor to furnish to the Company
such information regarding the distribution of such securities and such
other information as the Company may from time to time reasonably request
in writing, and the Company may exclude from such registration the
Registrable Securities of the Investor for unreasonably failing to furnish
such information within a reasonable time after receiving such request.
The Investor agrees by acquisition of such Registrable Securities
that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 5(c)(2), 5(c)(3), 5(c)(5) or
5(c)(6), the Investor will forthwith discontinue disposition of such
Registrable Securities covered by such Registration Statement or Prospectus
until receipt of the copies of the supplemented or amended
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prospectus contemplated by Section 5(j), or until it is advised in writing
(the "Advice") by the Company that the use of the applicable Prospectus may
be resumed, and has received copies of any additional or supplemental
filings which are incorporated by reference in such Prospectus, and if so
directed by the Company, the Investor shall deliver to the Company all
copies, other than permanent filed copies then in Investor's possession, of
the Prospectus covering such Registrable Securities current at the time of
receipt of such notice.
5. Registration Expenses
All fees and expenses incident to the Company's performance of or
compliance with the Registration Rights contained this Subscription
Agreement, including without limitation (a) all registration and filing
fees, including all expenses incident to filings required to be made with
the National Association of Securities Dealers, Inc. or listing on any
securities exchange, fees and expenses of compliance with securities or
blue sky laws (including reasonable fees and disbursements of counsel for
the underwriters in connection with blue sky qualifications of the
Registrable Securities and determination of the eligibility of any of the
Registrable Securities for investment under the laws of such jurisdictions
as the managing underwriters or the Investor may designate in accordance
with Section 5(h)), fees and expenses of compliance with state insurance or
other governmental regulations and rating agency fees, (b) printing
expenses, messenger, telephone and delivery expenses, and other internal
expenses, (c) all fees and disbursements of counsel for the Company and of
all independent certified public accountants of the Company (including the
expenses of any special audit and "cold comfort" letters required by or
incident to such performance), (d) fees and expenses of underwriters
(excluding discounts, commissions or fees of underwriters, selling brokers,
dealer managers or similar securities industry professionals relating to
the distribution of the Registrable Securities and legal expenses of
selling holders and the underwriters but including the fees and expenses of
any "qualified independent underwriter" or other independent appraiser
participating in an offering pursuant to Section 3 of Schedule E to the
By-Laws of the National Association of Securities Dealers, Inc.), (e)
securities acts liability insurance if the Company so desires and (f) fees
and expenses of other Persons retained by the Company (all such included
expenses being herein called "Registration Expenses") shall be borne by the
Company whether or not any of the Registration Statements become effective.
Notwithstanding any of the foregoing, the Investor upon sales of
Registrable Securities shall bear
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its own expenses for all underwriting commissions applicable to such sales
and any legal fees of counsel hired by the Investor.
The Company shall pay its general expenses (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any audit, and the
fees and expenses incurred in connection with the listing of the securities
to be registered on each securities exchange on which similar securities
issued by the Company are then listed.
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