General Statement of Beneficial Ownership — Schedule 13D Filing Table of Contents
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1: SC 13D General Statement of Beneficial Ownership -- HTML 106K
schedule13d
2: EX-1 Exhibit 1 Security Purchase Agreement HTML 160K
3: EX-2 Exhibit 2 Investor's Rights Agreement HTML 116K
4: EX-3 Exhibit 3 Certificate of Designations for the HTML 88K
Preferred Stock
5: EX-4 Exhibit 4 Common Stock Purchase Warrant HTML 90K
This
INVESTORS’ RIGHTS AGREEMENT (this “Agreement”)
is
made as of February 13,
2007,
by
and among UNI-PIXEL, INC., a Delaware corporation, (the “Company”),
and
the investors listed in Schedule
1
hereto
(each such investor individually, an “Investor”
and,
collectively, the “Investors”).
WHEREAS
the Investors are parties to the Securities Purchase Agreement of even date
herewith by and among the Company and the Investors (the “Securities
Purchase Agreement”),
and
it is a condition to the closing of the sale of the Company’s Series B Preferred
Stock, par value $0.001 per share (the “Series
B Preferred Stock”),
and
Warrants (as defined below) to the Investors that the Company execute and
deliver this Agreement with the Investors.
NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein, the parties hereto hereby agree as follows:
1.Definitions.
As used
in this Agreement, the following terms shall have the respective meanings set
forth below or elsewhere in this Agreement as described below:
“Affiliate”
of
any
Person means any other Person that, directly or indirectly, through one or
more
intermediaries, controls, is controlled by, or is under common control with,
such Person, as such terms are used and construed under Rule 144 (as defined
below), and with respect to any Tudor Entity (as defined below), in addition
to
the foregoing, the term “Affiliate”
shall
also include the Related Entities.
“Board”
means
the Board of Directors of the Company.
“Business
Day”
means
any day except Saturday, Sunday and any day which is a federal legal holiday
or
a day on which banking institutions in the State of New York or Texas are
authorized or required by law or other governmental action to
close.
“Certificate
of Designations”
means
the Certificate of Designations of the Series B Preferred Stock filed by the
Company with the Secretary of State of the State of Delaware establishing the
rights, preferences and privileges of the Series B Preferred Stock.
“Closing
Date”
has
the
meaning set forth in the Securities Purchase Agreement.
“Common
Stock”
means
the Company’s common stock, par value $0.001 per share, (including any
securities into which or for which such shares may be exchanged, or converted,
pursuant to any stock dividend, stock split, stock combination,
recapitalization, reclassification, reorganization or other similar
event).
“Conversion
Shares”
means
the shares of Common Stock issuable upon conversion of the shares of Series
B
Preferred Stock, as set forth in the Certificate of Designations.
“Equity
Securities”
means
(i) any Common Stock, preferred stock or other equity security of the Company,
(ii) any security convertible into or exercisable or exchangeable for, with
or
without consideration, any Common Stock, preferred stock or other equity
security of the Company (including any option to purchase such a convertible
security), (iii) any security carrying any option, warrant or right to subscribe
to or purchase any Common Stock, preferred stock or other equity security or
(iv) any such option, warrant or right.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and all of the rules and
regulations promulgated thereunder.
“Fully
Diluted Common Stock”
means
the outstanding Common Stock and the shares of Common Stock issued or issuable
upon conversion in full of the shares of Series B Preferred Stock and exercise
in full of the Warrants, together with all other Equity Securities of the
Company outstanding as of any applicable record or measure date, treated on
an
as-if-converted or as-if-exercised basis, as applicable.
“Holder”
means
any Investor who holds Registrable Securities (as defined below) and any holder
of Registrable Securities to whom the registration rights conferred by this
Agreement have been duly and validly transferred in accordance with Section
9
of this
Agreement.
“Initial
Public Offering”
means
the closing of the Company’s first public offering of the Company’s Common Stock
registered under the Securities Act.
“Person”
(whether or not capitalized) means an individual, partnership, limited liability
company, corporation, association, trust, joint venture, unincorporated
organization, and any government, governmental department or agency or political
subdivision thereof.
“Prospectus”
means
the prospectus included in any Registration Statement (as defined below)
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective Registration
Statement in reliance upon Rule 430A promulgated under the Securities Act),
as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.
“Qualified
Public Offering”
means
a
bona fide public offering, pursuant to an effective registration statement
under
the Securities Act covering the offer and sale of Common Stock for the account
of the Company, by a reputable investment bank on a firm commitment underwriting
basis in which (x) the price per share of Common Stock is at least five times
(5x) the then applicable Series B Preferred Conversion Price (as defined in
the
Certificate of Designations), and (y) the gross cash proceeds to the Company
(before underwriting discounts, commissions and fees) are $75,000,000 or more
(or such other amount as approved by the Board, including at least one Series
B
Director (as defined in the Certificate of Designations), if any are on the
Board at such time), and following which offering the Common Stock is listed
on
the New York Stock Exchange or admitted to quotation on NASDAQ (or such other
appropriate securities exchange as approved by the Board, including at least
one
Series B Director, if any are on the Board at such time).
Qualifying
Holder
means
any Investor who (together with its Affiliates) holds Series B Preferred Stock
and/or Warrants representing (on an as-if-converted and/or as-if-exercised
basis, respectively) five percent (5%) or more of the Company’s Fully Diluted
Common Stock.
The
terms
“register,”
“registered”
and
“registration”
shall
refer to a registration effected by preparing and filing a Registration
Statement (as defined below) in compliance with the Securities Act (as defined
below) and the declaration or ordering of the effectiveness of such
registration.
“Registrable
Securities”
means,
at the relevant time of reference thereto, the Conversion Shares and the
Warrants Shares (including any shares of capital stock that may be issued in
respect thereof pursuant to a stock split, stock dividend, recombination,
reclassification or the like); provided,
however,
that
the term “Registrable
Securities”
shall
not include any of the Conversion Shares or Warrant Shares that (a) are actually
sold pursuant to a registration statement that has been declared effective
under
the Securities Act by the SEC, (b) may be sold at such time by the holder
thereof pursuant to Rule 144(k) under the Securities Act, or (c) cease to be
outstanding.
“Registration
Statement”
means
any registration statements contemplated by this Agreement, including (in each
case) the Prospectus, amendments and supplements to such registration statement
or Prospectus, pre- and post-effective amendments thereto, all exhibits thereto,
and all material incorporated by reference in such registration statement or
Prospectus.
“Related
Entities”
includes, with respect to any Tudor Entity, any entities for which any of the
Tudor Entities or any of its Affiliates serve as general partner and/or
investment advisor or in a similar capacity, and all mutual funds or other
pooled investment vehicles or entities under the control or management of any
of
the Tudor Entities or its Affiliates. For purposes of this Agreement (a)
“Tudor
Entities”
means
each of the following: Tudor Investment Corporation, Tudor Group Holdings,
LLC,
their respective Affiliates, and any Affiliate or Affiliated Group of Tudor
Investment Corporation and/or Tudor Group Holdings LLC, and (b) with respect
to
the Tudor Entities, “Affiliated
Group”
has
the
meaning given to it in Section 1504 of the Internal Revenue Code of 1986, as
amended, and in addition includes any analogous combined, consolidated or
unitary group, as defined under any applicable state, local or foreign income
tax law.
“Restricted
Securities”
means
any Registrable Securities required to bear the legend set forth in Section
9(b)
of this
Agreement.
“Rule
144”
means
Rule 144 promulgated under the Securities Act and any successor or substitute
rule, law or provision.
“SEC”
means
the Securities and Exchange Commission.
“Securities
Act”
means
the Securities Act of 1933, as amended, and all of the rules and regulations
promulgated thereunder.
“Shares”
means
the shares of Series B Preferred Stock issued and sold by the Company to the
Investors pursuant to the Securities Purchase Agreement.
“Warrant
Shares”
means
the shares of Common Stock issued or issuable upon the exercise of the
Warrants.
“Warrants”
means
the warrants to purchase up to in aggregate 6,839,279 shares of Common Stock
issued to the Investors pursuant to Section 2.3 of the Securities Purchase
Agreement.
2.Demand
Registration.
(a)Request
for Registration.
If the
Company shall receive at any time after one hundred eighty (180) days following
the effective date of the registration statement for the Initial Public Offering
a written request from (x) the Tudor Entities (together with their Related
Entities), provided at such time they collectively hold shares of Common Stock
(on an as-if-converted to Common Stock basis in respect of the Shares and
as-if-exercised basis in respect of the Warrants) representing in aggregate
five
percent (5%) or more of the Fully Diluted Common Stock or (y) Investors
(together with the Investors’ Affiliates) holding shares of Common Stock (on an
as-if-converted to Common Stock basis in respect of the Shares and
as-if-exercised basis in respect of the Warrants) representing in aggregate
twenty percent (20%) or more of the Fully Diluted Common Stock, that the Company
effect any registration with respect to all or a part of the Registrable
Securities held by requesting Investors, then the Company shall, subject to
the
conditions set forth in this Section
2,
use its
reasonable best efforts to:
(i) as
soon
as practicable, prepare and file with the SEC a Registration Statement on such
form under the Securities Act then available to the Company for the purpose
of
registering under the Securities Act all or such portion of the Registrable
Securities as are specified in such request (together with any shares of Common
Stock desired to be included in such Registration Statement for the account
of
the Company and/or the account of holders of piggy-back registration rights
with
respect to the Company’s Common Stock, subject to any limitations that may be
advised by the managing underwriter regarding the maximum size of the offering
pursuant to Section 2(d)); and
(ii) cause
such Registration Statement to be declared effective as soon as practicable
but
in no event later than (x) the date that is ninety (90) days following the
receipt of such request, in the event that such Registration Statement is not
reviewed by the SEC or (y) the date that is one hundred twenty (120) days
following the receipt of such request in the event such review takes place
(including filing with the SEC, within three (3) Business Days of the date
that
the Company is notified in writing by the SEC that such Registration Statement
will not be reviewed or will not be subject to further review, a request for
acceleration of effectiveness in accordance with Rule 461 promulgated under
the
Securities Act, which request shall request an effective date that is within
three (3) Business Days of the date of such request), and to remain effective,
subject to the provisions of Section 2(c), for not less than 180 days. The
Company shall notify each requesting Investor in writing promptly (and in any
event within three (3) Business Days) after such Registration Statement has
been
declared effective by the SEC.
(b)Limitations.
The
Company shall not be obligated to effect, or to take any action to effect,
any
registration pursuant to this Section
2:
(i) in
any
particular jurisdiction in which the Company would be required to execute a
general consent to service of process, qualify to do business as a foreign
corporation or become subject to taxation in such jurisdiction, in effecting
such registration, qualification, or compliance, unless the Company is already
subject to service, qualified to do business or subject to taxation in such
jurisdiction and except as may be required by the Securities Act;
(ii) after
the
Company, in the case of Investors meeting the requirements of Section 2(a)(x)
or
Section 2(a)(y), respectively, has effected two (2) such registrations pursuant
to this Section
2
(counting for these purposes only registrations which have been (A) declared
or
ordered effective and pursuant to which securities have been sold as
contemplated in the Registration Statement or (B) withdrawn at the request
of
the requesting Investors other than as a result of a material adverse change
to
the Company);
(iii) during
the period starting with the date sixty (60) days prior to the Company’s
good faith estimate of the date of the filing of and ending on a date one
hundred eighty (180) days following the effective date of a registration
for the Company’s account that is subject to Section 3
hereof;
provided,
however,
that the
Company is actively employing in good faith its best efforts to cause such
registration statement to become effective; or
(iv) if
the
requesting Investors propose to dispose of Registrable Securities that may
be
immediately registered on Form S-3 pursuant to Section 4
hereof
for disposal in the manner requested.
(c)Deferral.
Notwithstanding anything in this Section
2
to the
contrary, if the Company shall furnish to the Investors a certificate signed
by
the President, Chief Executive Officer or Chief Financial Officer of the Company
stating that the Board has made the good faith determination (i) that the filing
of a Registration Statement pursuant to this Section
2
covering
the Registrable Securities would require, under the Securities Act, premature
disclosure in such Registration Statement (or the Prospectus relating thereto)
of material, nonpublic information concerning the Company, its business or
prospects or any proposed material transaction involving the Company, (ii)
that
such premature disclosure would be materially adverse to the Company, its
business or prospects or any such proposed material transaction or otherwise
would not be in the best interests of the Company and (iii) that it is therefore
essential to defer the filing of such Registration Statement (and the Prospectus
relating thereto), then the Company shall have the right to defer the filing
of
such Registration Statement (and the Prospectus relating thereto) for a period
not greater than sixty (60) consecutive days; provided,
however,
that the
Company shall not defer its obligation in this manner more than twice in any
consecutive twelve (12) month period. The Company agrees that, as promptly
as
possible after the consummation, abandonment or public disclosure of the
circumstances that caused the Company to defer the filing of such Registration
Statement (and the Prospectus relating thereto) pursuant to this Section
2(c),
the
Company will as soon as practicable file such Registration
Statement.
(d)Underwriting.
If the
requesting Investors intend to distribute the Registrable Securities covered
by
their request by means of an underwriting, they shall so advise the Company
as a
part of their request made pursuant to this Section
2.
In such
event, the right of any requesting Investor to include all or any portion of
its
Registrable Securities in such registration pursuant to this Section
2
shall be
conditioned upon such Investor’s participation in such underwriting and the
inclusion of such Investor’s Registrable Securities to the extent provided
herein. The Company shall (together with all Investors proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the representative of the underwriter or underwriters
selected for such underwriting by the requesting Investors, which underwriters
are reasonably acceptable to the Company.
If
the
managing underwriter advises the requesting Investors in writing that, in its
opinion, the number of shares requested by the Investors to be included in
such
registration, as well as any other shares requested by other shareholders to
be
included in such registration pursuant to any piggy-back registration rights
or
proposed to be included by the Company, is likely to affect materially and
adversely the success of the offering, the timing, the method of distribution
or
the price that would be received for any shares of Common Stock offered in
such
offering, then, notwithstanding anything in this Section
2
or any
other agreements of the Company with any other shareholders to the contrary,
the
Company shall be required to include in such registration the Registrable
Securities requested to be included in such registration for the account of
the
requesting Investors, in priority to any other shareholders and the Company,
and
as among the requesting Investors pro rata based on the number of Registrable
Securities held by them or on such other basis as they may agree among
themselves.
If
an
Investor which has requested inclusion of Registrable Securities in such
registration as provided above does not agree to the terms of any such
underwriting, such Investor’s Registrable Securities may be excluded therefrom.
Any Registrable Securities excluded or withdrawn from such underwriting shall
also be withdrawn from such registration. If Registrable Securities are so
withdrawn from the registration, and if the number of Registrable Securities
to
be included in such registration was previously reduced as a result of marketing
factors pursuant to this Section 2(d),
then
the Company shall then offer to other shareholders who have retained rights
to
include securities in the registration the right to include additional shares
in
the registration in an aggregate amount equal to the number of shares so
withdrawn.
3.“Piggyback”
Registration.
(a)Company
Registration.
If at
any time the Company proposes to register any of its Common Stock under the
Securities Act for an underwritten offering, whether for its own account (other
than in connection with the Initial Public Offering) or the account of others
(but excluding any registrations to be effected on Forms S-4 or S-8 or other
applicable successor forms), the Company shall, each such time, give to all
Holders twenty (20) days’ prior written notice of its intent to do so, and such
notice shall describe the proposed registration and shall offer such Holders
the
opportunity to include in such registration such number of Registrable
Securities as each such Holder may request. Upon the written request of any
Holder given to the Company within fifteen (15) days after the receipt of any
such notice by the Company, the Company shall include in such Registration
Statement the Registrable Securities of such Holder requested to be registered,
subject to cut-back as provided in Section
3(b)
below.
The Holders of Registrable Securities shall be permitted to join in any demand
for registration by any other shareholders of the Company pursuant to any
registration rights that they may have (including in respect of an Initial
Public Offering), and in such event the Registrable Securities held by such
Holders shall be counted for purposes of determining whether the minimum number
of shares entitled to demand registration shall have made such demand (to the
extent required) and the Holders shall be entitled to the piggyback registration
rights provided in this Section
3
in any
registration effected by the Company pursuant to such demand.
(b) If
the
managing underwriter advises the Company in writing that, in its opinion, the
number of shares requested by the Holders to be included in such registration
is
likely to affect materially and adversely the success of the offering, the
timing, the method of distribution or the price that would be received for
any
shares of Common Stock offered in such offering, then, notwithstanding anything
in this Section
3
to the
contrary, the Company shall only be required to include in such registration,
to
the extent of the number of shares of Common Stock which the Company is so
advised can be sold in such offering without such effect (the “Maximum
Number”),
a
number of shares of Common Stock requested to be included in such registration:
(i) if such registration is being made pursuant to the exercise of the demand
registration rights of a shareholder of the Company, then those shares to be
registered for the account of the demanding shareholder up to the Maximum
Number, and if all such shares do not exceed the Maximum Number, then such
other
shares to be registered for the account of the Company, such Holders and such
other stockholders of the Company exercising their piggy-back registration
rights, in an amount up to the remaining balance of the Maximum Number, pro
rata
on the basis of the number of shares of Common Stock that each of them has
requested or proposed to be included in such registration; and (ii) if such
registration is being made for the Company’s own account, then those shares to
be registered for the Company up to the Maximum Number, and if all such shares
do not exceed the Maximum Number, then such other shares to be registered for
the account of the Holders and such other stockholders of the Company exercising
their piggy-back registration rights, in an amount up to the remaining balance
of the Maximum Number, pro rata on the basis of the number of shares of Common
Stock that each of them has requested or proposed to be included in such
registration. Notwithstanding the foregoing, in no event shall the amount of
securities of the selling Holders included in the offering be less than thirty
percent (30%) of the total number of shares originally requested by the Holders
to be included in such offering. For purposes of the preceding sentence
concerning apportionment, for any selling shareholder that is a Holder of
Registrable Securities and that is an investment fund, partnership or
corporation, the affiliated investment funds, partners, retired partners and
shareholders of such 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 selling Holder, and any pro
rata reduction with respect to such selling Holder, shall be based upon the
aggregate amount of Registrable Securities requested to be included in such
registration by all such related entities and individuals.
(c) The
Company shall not be required under this Section
3
or
otherwise to include the Registrable Securities of any Holder in any such
registration unless such Holder accepts and agrees to the terms of the
underwriting, which shall be reasonable and customary, as agreed upon between
the Company and the underwriters selected by the Company, and such Holder
complies with its obligations under Section 8 hereof.
4.
Registration
on Form S-3.
(a)Request
for Form S-3 Registration.
After
the Initial Public Offering, the Company shall use its reasonable best efforts
to qualify for registration on Form S-3 or any comparable or successor form
or
forms. After the Company has qualified for the use of Form S-3, in addition
to
the rights contained in Sections
2 and 3
and
subject to the conditions set forth in this Section
4,
if the
Company shall receive from a Holder or Holders of Registrable Securities a
written request that the Company effect any registration on Form S-3 or any
similar short form registration statement with respect to all or part of the
Registrable Securities, the Company shall take all such action with respect
to
the registration of such Registrable Securities as required by Section
2(a)(i) and (ii),
and
upon the effectiveness of the registration statement, to maintain such
effectiveness for offers and sales from time to time, on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act, of the Registrable
Securities requested to be included until all of the Registrable Securities
registered thereunder shall have been sold in the matter contemplated
therein.
(b)Limitations
on Form S-3 Registration.
The
Company shall not be obligated to effect, or take any action to effect, any
such
registration pursuant to this Section
4
in any
of the circumstances described in Section
2(b)(i) or (iii),
and
shall not be required to effect more than two registrations per year pursuant
to
Section 4(a).
(c)Deferral;
Suspension.
Notwithstanding anything in this Section
4
to the
contrary, if the Company shall furnish to the Investors a certificate signed
by
the President, Chief Executive Officer or Chief Financial Officer of the Company
stating that the Board has made the good faith determination (i) that upon
the
advice of counsel the continued use by the Investors of a Registration Statement
pursuant to this Section
4
for
purposes of effecting offers or sales of Registrable Securities pursuant thereto
would require, under the Securities Act, premature disclosure in such
Registration Statement (or the Prospectus relating thereto) of material,
nonpublic information concerning the Company, its business or prospects or
any
proposed material transaction involving the Company and (ii) that such premature
disclosure would be materially adverse to the Company, its business or prospects
or any such proposed material transaction or otherwise would not be in the
best
interests of the Company, then the right of the Investors to use such
Registration Statement (and the Prospectus relating thereto) for purposes of
effecting offers or sales of Registrable Securities pursuant thereto and the
filing of such Registration Statement pursuant to a request under this
Section
4
may be
suspended or deferred, as the case may be, for a period (the “Suspension
Period”)
not
greater than sixty (60) consecutive days and with not more than two (2)
Suspension Periods in any consecutive twelve (12) month period. During the
Suspension Period, the Investors shall not offer or sell any Registrable
Securities pursuant to or in reliance upon such Registration Statement (or
the
Prospectus relating thereto). The Company agrees that, as promptly as possible
after the consummation, abandonment, public disclosure or other appropriate
resolution of the event or transaction that caused the Company to suspend the
use or delay the filing of such Registration Statement (and the Prospectus
relating thereto) pursuant to this Section
4(c),
the
Company shall as promptly as possible lift any suspension or terminate any
delay, as the case may be, provide the Investors with revised Prospectuses,
if
required, and notify the Investors of their ability to effect offers or sales
of
Registrable Securities pursuant to or in reliance upon such Registration
Statement.
(d)Underwriting.
If the
Holders requesting registration under this Section
4
intend
to distribute the Registrable Securities covered by their request by means
of an
underwriting, the provisions of Section
2(d)
shall
apply to such registration. Notwithstanding anything contained herein to the
contrary, registrations effected pursuant to this Section
4
shall
not be counted as requests for registration or registrations effected pursuant
to Section
2.
5.Obligations
of the Company.
In
connection with the Company’s registration obligations hereunder, the Company
shall, as expeditiously as practicable:
(a) (i)
Furnish to each Holder copies of all Registration Statements filed with the
SEC
prior to their being filed with the SEC, (ii) use commercially reasonable
efforts to cause its officers and directors, counsel and certified public
accountants to respond to such inquiries and provide such certification,
opinions and review letters as shall be necessary, in the reasonable opinion
of
such Holder or its counsel, to conduct a reasonable investigation within the
meaning of the Securities Act and customary for the registration and
distribution pursuant thereto, and (iii) notify the Holders of any stop order
issued or threatened by the SEC and use best efforts to prevent the entry of
such stop order or to remove it if entered.
(b) Prepare
and file with the SEC such amendments and supplements, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection
therewith as may be necessary to comply with the Securities Act and to keep
the
Registration Statement continuously effective as required herein, and prepare
and file with the SEC such additional Registration Statements as necessary
to
register for resale under the Securities Act all of the Registrable Securities
to include naming any permitted transferees of Registrable Securities as selling
stockholders in such Registration Statement and otherwise as required pursuant
to Sections
5(c)
or
(d)
below;
(ii) cause any related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant
to
Rule 424; (iii) respond as promptly as practicable to any comments received
from
the SEC with respect to each Registration Statement or any amendment thereto
and
as promptly as practicable provide the Holders true and complete copies of
all
correspondence from and to the SEC relating to the Registration Statement (other
than correspondence containing material nonpublic information); and (iv) comply
with the provisions of the Securities Act and the Exchange Act with respect
to
the disposition of all Registrable Securities covered by such Registration
Statement as so amended or in such Prospectus as so supplemented.
(c) Notify
the Holders and their counsel as promptly as practicable: (i) when the SEC
notifies the Company whether there will be a “review” of a Registration
Statement and whenever the SEC comments in writing on such Registration
Statement and (ii) when a Registration Statement, or any post-effective
amendment or supplement thereto, has become effective, and after the
effectiveness thereof: (A) of any request by the SEC or any other federal or
state governmental authority for amendments or supplements to the Registration
Statement or Prospectus or for additional information; (B) of the issuance
by
the SEC or any state securities commission of any stop order suspending the
effectiveness of the Registration Statement covering any or all of the
Registrable Securities or the initiation of any proceedings for that purpose;
and (C) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose. Without limitation of any
remedies to which the Investors may be entitled under this Agreement, if any
of
the events described in Section
5(c)(ii)(A),
(B),
and
(C)
occurs,
the Company shall use best efforts to respond to and correct the event. Upon
its
receipt of written notification from the Company of the occurrence of any of
the
events described in Section
5(c)(ii)(A),(B)
and
(C),
each
Holder shall not offer or sell any of its Registrable Securities pursuant to
the
Prospectus until it has been advised in writing by the Company that it may
resume sales, either under such Prospectus or pursuant to any amendment or
supplement thereto delivered by the Company to such Holder.
(d) Notify
the Holders and their counsel as promptly as practicable of the occurrence
(but
not the nature or details) of any event as a result of which the Prospectus
included in or relating to a Registration Statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading; and, thereafter, the Company shall as promptly as practicable
prepare (and, when completed, give notice to each Investor) a supplement or
amendment to such Prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such Prospectus will not contain an untrue
statement of a material fact or omit to state any fact necessary to make the
statements therein not misleading; provided,
however,
that
upon such notification by the Company, the Holders shall not offer or sell
Registrable Securities pursuant to such Prospectus until the Company has
notified the Investors that it has prepared a supplement or amendment to such
Prospectus and delivered copies of such supplement or amendment to the Investors
(it being understood and agreed by the Company that the foregoing proviso shall
in no way diminish or otherwise impair the Company’s obligation to as promptly
as practicable prepare a Prospectus amendment or supplement as above provided
in
this Section
5(d)
and
deliver copies of same as above provided in Section
5(h)
hereof).
(e) Upon
the
occurrence of any event described in Section
5(d)
hereof,
as promptly as practicable, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to
the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not
misleading.
(f) Use
reasonable best efforts to avoid the issuance of or, if issued, obtain the
withdrawal of, (i) any order suspending the effectiveness of any Registration
Statement or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, as promptly as possible.
(g) Furnish
to the Holders and their counsel, without charge, at least one conformed copy
of
each Registration Statement and each amendment thereto, and all exhibits to
the
extent requested by such Holder or their counsel (including those previously
furnished or incorporated by reference) as promptly as practicable after the
filing of such documents with the SEC.
(h) As
promptly as practicable furnish to each selling Holder, without charge, such
number of copies of a Prospectus, including a preliminary Prospectus, in
conformity with the requirements of the Securities Act, and such other documents
(including, without limitation, Prospectus amendments and supplements) as each
such selling Holder may reasonably request in order to facilitate the
disposition of the Registrable Securities covered by such Prospectus and any
amendment or supplement thereto. The Company hereby consents to the use of
such
Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto to the extent
permitted by federal and state securities laws and regulations.
(i) Use
reasonable best efforts to register and qualify (or obtain an exemption from
such registration and qualification of) the Registrable Securities under such
other securities or blue sky laws of the states of residence of each Holder
and
such other jurisdictions as each Holder shall reasonably request, to keep such
registration or qualification (or exemption therefrom) effective during the
periods each Registration Statement is effective, and do any and all other
acts
or things which may be reasonably necessary or advisable to enable each Holder
to consummate the public sale or other disposition of Registrable Securities
in
such jurisdiction; provided,
however,
that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business, to file a general consent to service of process
or
become subject to taxation in any such states or jurisdictions where it is
not
then qualified or subject to process or taxation.
(j) Cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing the Registrable Securities to be delivered to a
transferee pursuant to a Registration Statement, which certificates shall be
free, to the extent permitted by this Agreement, the Securities Purchase
Agreement and applicable law, of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in such names
as such Holders may request.
(k) Cooperate
with any reasonable due diligence investigation undertaken by the Holders,
any
managing underwriter participating in any disposition pursuant to a Registration
Statement, Holders’ counsel and any attorney, accountant or other agent retained
by Holders or any managing underwriter, in connection with the sale of the
Registrable Securities, including, without limitation, making available any
documents and information; provided,
however,
that
the Company will not deliver or make available to any Holder material, nonpublic
information unless such Holder specifically requests and consents in advance
in
writing to receive such material, nonpublic information and, if requested by
the
Company, such Holder agrees in writing to treat such information as confidential
and use its reasonable best efforts to maintain the confidentiality
thereof.
(l) At
the
request of an Affiliate of a Holder, the Company shall amend any Registration
Statement to include such Affiliate as a selling stockholder in such
Registration Statement.
(m) Comply
with all applicable rules and regulations of the SEC.
6.Expenses
of Registration.
The
Company shall pay for all expenses (exclusive of underwriting discounts and
commissions, if any) incurred in connection with a registration pursuant to
this
Agreement and compliance with Section
5
of this
Agreement, including, without limitation, (i) all registration, filing and
qualification fees and expenses (including without limitation those related
to
filings with the SEC, or any national securities exchange or automated quotation
system upon which the Company’s securities are listed or admitted for quotation
and in connection with applicable state securities or blue sky laws), (ii)
all
printing expenses, (iii) all messenger, telephone and delivery expenses incurred
by the Company, (iv) all fees and disbursements of counsel for the Company
and
of one counsel for the Holders, such fees and disbursements of counsel for
the
Holders not to exceed $40,000, and (v) all fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement.
7.Indemnification.
In the
event that any Registrable Securities of the Investors are included in a
Registration Statement pursuant to this Agreement:
(a) To
the
fullest extent permitted by law, the Company will indemnify and hold harmless
each Investor and each officer, director, fiduciary, agent, investment advisor,
employee, member (or other equity holder), general partner and limited partner
(and Affiliates thereof) of such Investor, each broker, underwriter or other
person acting on behalf of such Investor and each person, if any, who controls
such Investor within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, or administrative, judicial, regulatory or
civil
proceedings, joint or several (the “Losses”)
to
which they may become subject under the Securities Act or otherwise, insofar
as
such Losses (or actions in respect thereof) arise out of or relate to any untrue
or alleged untrue statement of any material fact contained in the Registration
Statement, or arise out of or relate to 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 any violation by the Company
of
the Securities Act or state securities or blue sky laws applicable to the
Company or the relevant registration and leading to action or inaction required
of the Company in connection with such registration or qualification under
such
Securities Act or state securities or blue sky laws; and, subject to the
provisions of Section
7(c)
hereof,
the Company will reimburse on demand, upon receipt of written evidence, such
Investor, such broker or other person acting on behalf of such Investor or
such
officer, director, fiduciary, employee, member (or other equity holder), general
partner, limited partner, affiliate or controlling person for any legal or
other
expenses reasonably incurred by any of them in connection with investigating
or
defending any such Losses (or actions in respect thereof); provided,
however,
that
the indemnity agreement contained in this Section
7(a)
or
Section
7(e)
shall
not apply to amounts paid in settlement of, or pursuant to any judgment relating
to, any such Losses if such settlement is effected, or consent to such judgment
is entered, 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 Losses (or actions in respect thereof), to the extent that it arises out
of
or is based upon (i) an untrue statement of any material fact contained in
the
Registration Statement or 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 that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Registration Statement, in
reliance upon and in conformity with written information furnished by such
Investor to the Company expressly for use in such Registration Statement, or
(ii) the failure of the Investor to cease all offers and sales of Registrable
Securities when required to do so pursuant to Sections
4(c), 5(c)
and
(d)
hereof.
(b) To
the
fullest extent permitted by law, each Investor, severally (as to itself) and
not
jointly, will indemnify and hold harmless the Company, each of its directors,
each of its officers who have signed the Registration Statement, each person,
if
any, who controls the Company within the meaning of the Securities Act, all
other Investors and each broker, underwriter or other person acting on behalf
of
the Company or such other Investors, against any Losses to which any of them
may
become subject under the Securities Act or otherwise, insofar as and to the
extent such Losses (or actions in respect thereto) arise out of or are based
upon any untrue statement of any material fact contained in the Registration
Statement, or arise out of or relate to the 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 that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement in reliance upon and in conformity with written information furnished
by such Investor to the Company expressly for use in such Registration
Statement, or to the extent such Losses (or actions in respect thereof) arise
out of or are based upon the failure of the Investor to cease all offers and
sales of Registrable Securities when required to do so pursuant to Sections
4(c), 5(c)
and
(d);
and,
subject to the provisions of Section
7(d)
hereof,
such Investor will reimburse on demand, upon receipt of written evidence, any
legal or other expenses reasonably incurred by the Company or any such director,
officer, controlling person, or other Investor, or such broker, underwriter
or
other person acting on behalf of the Company or such Investor, in connection
with investigating or defending any such Losses; provided,
however,
that
the maximum aggregate amount of liability of such Investor under this
Section
7
shall be
limited to the proceeds (net of underwriting discounts and commissions, if
any)
actually received by such Investor from the sale of Registrable Securities
covered by such Registration Statement; and providedfurther,
however,
that
the indemnity agreement contained in this Section
7(b)
or
Section
7(e)
shall
not apply to amounts paid in settlement of, or pursuant to any judgment relating
to, any such Losses if such settlement is effected, or consent to such judgment
is entered, without the consent of such Investor against which the request
for
indemnity is being made (which consent shall not be unreasonably
withheld).
(c) As
promptly as practicable after receipt by an indemnified party under this
Section
7
of
notice of the threat, assertion or commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any indemnifying
party under this Section
7,
notify
the indemnifying party in writing of the commencement thereof and the
indemnifying party shall have the right to participate in and, to the extent
the
indemnifying party desires, jointly with any other indemnifying party similarly
noticed, to assume at its expense the defense thereof with counsel mutually
satisfactory to the parties; provided,
however,
that,
the failure to notify an indemnifying party promptly of the threat, assertion
or
commencement of any such action shall not relieve such indemnifying party of
any
liability to the indemnified party under this Section
7
except
(and only) to the extent that it shall be finally determined by a court of
competent jurisdiction (which determination is not subject to appeal or further
review) that such failure shall have proximately and materially adversely
prejudiced the indemnifying party.
(d) If
any
indemnified party shall have reasonably concluded that there may be one or
more
legal defenses available to such indemnified party which are different from
or
additional to those available to the indemnifying party, or that such claim
or
litigation involves or could have an effect upon matters beyond the scope of
the
indemnity agreement provided in this Section
7,
the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, and such indemnifying party shall reimburse
such indemnified party and any person controlling such indemnified party for
the
fees and expenses of one counsel retained by the indemnified party which are
reasonably related to the matters covered by the indemnity agreement provided
in
this Section
7.
Subject
to the foregoing, an indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof but the
fees and expenses of such counsel shall not be at the expense of the
indemnifying party.
(e) If
the
indemnification provided for in this Section
7
from the
indemnifying party is applicable by its terms but unavailable to an indemnified
party hereunder in respect of any Losses, then the indemnifying party, in lieu
of indemnifying such indemnified party, shall, subject to the maximum aggregate
liability of such indemnifying party hereunder, contribute to the amount paid
or
payable by such indemnified party as a result of such Losses in such proportion
as is appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the actions which resulted in such Losses,
as well as any other relevant equitable considerations. The relative faults
of
such indemnifying party and indemnified party shall be determined by reference
to, among other things, whether any action in question, including any untrue
or
alleged untrue statement of a material fact or omission or alleged omission
to
state a material fact, has been made by, or relates to information supplied
by,
such indemnifying party or indemnified party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the Losses referred
to above shall be deemed to include, subject to the limitations set forth in
Section
7(a),
(b),
(c)
and
(d),
any
legal or other fees, charges or expenses reasonably incurred by such party
in
connection with any investigation or proceeding. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of
fraudulent misrepresentation. The parties hereto agree that it would not be
just
and equitable if contribution pursuant to this Section
7(e)
were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in this
paragraph.
(f) The
indemnity and contribution agreements contained in this Section are in addition
to (not in lieu of) any liability that any indemnifying party may have to any
indemnified party.
8Information
by Holder.
Each
Holder shall, as a condition to the inclusion of any of its Registrable
Securities in any registration hereunder, furnish to the Company such
information regarding itself and the Registrable Securities held by it and
the
method or proposed method of disposition of such securities as the Company
may
reasonably request in writing as necessary to effect the registration,
qualification, or compliance referred to in Sections
2,
3,
4
or
5
or as
otherwise necessary to comply with the Securities Act and any applicable state
securities laws.
9.Restrictions
on Transfer.
(a) The
holder of each certificate representing Registrable Securities by acceptance
thereof agrees to comply in all respects with the provisions of this
Section
9.
Each
Holder agrees not to make any sale, assignment, transfer, pledge or other
disposition of all or any portion of the Restricted Securities, or any
beneficial interest therein, except (i) pursuant to an effective registration
statement under the Securities Act, including such as required hereunder, or
(ii) pursuant to an available exemption from registration under the Securities
Act (including sales permitted pursuant to Rule 144) and applicable state
securities laws. Any transfer or purported transfer of the Restricted Securities
in violation of this Section
9
shall be
void. The Company shall not be required to register any transfer of the
Restricted Securities in violation of this Section
9.
The
Company may, and may instruct any transfer agent for the Company, to place
such
stop transfer orders as may be required on the transfer books of the Company
in
order to ensure compliance with the provisions of this Section
9.
(b) Each
certificate representing Registrable Securities shall (unless otherwise
permitted by the provisions of this Agreement) be stamped or otherwise imprinted
with a legend substantially similar to the following (in addition to any legend
required under applicable state securities laws):
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO
AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION
UNDER
SAID ACT.
(c) The
legend set forth in Section
9(b)
shall be
removed from the certificates evidencing the Restricted Securities, (i) in
connection with any sale of such Restricted Securities pursuant to Rule 144
or
any effective registration statement, including such as required hereunder,
or
(ii) if such Restricted Securities are eligible for sale under Rule 144(k)
(and
the holder of such Restricted Securities has submitted a written request for
removal of the legend certifying that the holder is in compliance with the
applicable provisions of Rule 144(k)) or (iii) if such legend is not required
under applicable requirements of the Securities Act (including interpretations
and pronouncements issued by the Staff of the SEC) (and the holder of such
Restricted Securities has submitted a written request for removal of the legend
certifying that such legend is not required under applicable requirements of
the
Securities Act (including such interpretations and pronouncements)) and, if
reasonably requested by the Company, the Company has received from the Holder’s
counsel an opinion, in such form as is reasonably satisfactory to Company’s
counsel, that such legend is not so required. The Company shall cause its
counsel to issue a legal opinion to the Company’s transfer agent, if required,
promptly upon the occurrence of any of the events in clauses (i), (ii) or (iii)
above to effect the removal of the legend on certificates evidencing the
Restricted Securities and shall also cause its counsel to issue a “blanket”
legal opinion to the Company’s transfer agent, if required, promptly after the
effective date of any registration statement, including such as required
hereunder, covering the resale of the Restricted Securities to allow sales
without restriction pursuant to such registration statement. The Company agrees
that at such time as such legend is no longer required under this Section
9,
it
will, promptly following the delivery by a Holder to the Company or the
Company’s transfer agent of a certificate representing the Restricted Securities
issued with such legend, deliver or cause to be delivered to or as directed
by
such Holder a certificate representing such Restricted Securities that is free
from such legend; provided,
however,
that in
the case of removal of the legend in connection with a sale pursuant to Rule
144, the holder of such Restricted Securities has submitted a written request
for removal of the legend indicating that the holder has complied with the
applicable provisions of Rule 144, including delivery of a broker’s
representation letter and a copy of a Form 144 filed in connection with such
sale. The Company may not make any notation on its records or give instructions
to any transfer agent of the Company that enlarge the restrictions on transfer
set forth in this Section.
10.Reports
Under the Exchange Act.
With a
view to making available to the Holders the benefits of Rule 144 and any other
rule or regulation of the SEC that may at any time permit the Holders to sell
the Registrable Securities to the public without registration, the Company
agrees to use best efforts to: (i) make and keep public information available,
as those terms are understood and defined in Rule 144; (ii) file with the SEC
in
a timely manner all reports and other documents required to be filed by an
issuer of securities registered under the Securities Act or the Exchange Act;
(iii) as long as any Holder owns any Restricted Securities, to furnish in
writing upon such Holder’s request a written statement by the Company that it
has complied with the reporting requirements of Rule 144 and of the Securities
Act and the Exchange Act, and to furnish to such Holder a copy of the most
recent annual and quarterly reports of the Company, and such other reports
and
documents so filed by the Company as may be reasonably requested in availing
such Holder of any rule or regulation of the SEC permitting the selling of
any
such Restricted Securities without registration; and (iv) undertake any
additional actions reasonably necessary to maintain the availability of a
registration statement, including on any successor or substitute forms, and
the
use of Rule 144.
11.Limitations
on Subsequent Registration Rights.
From
and after the date of this Agreement, the Company shall not, without the prior
written consent of the Holders of a majority of the then outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder
of
any securities of the Company giving such holder or prospective holder any
registration rights the term of which are senior to the registration rights
granted to the Holders hereunder.
12.Information
Covenants of the Company.
If at
any time the Company shall cease to be a reporting company under the Exchange
Act, the Company shall furnish the following reports to each Qualifying
Holder:
(a) As
soon
as practicable after the end of each fiscal year of the Company, and in any
event within ninety (90) days after the end of each fiscal year of the Company,
a consolidated balance sheet of the Company and its subsidiaries, if any, as
at
the end of such fiscal year, and consolidated statements of income and cash
flows of the Company and its subsidiaries, if any, for such fiscal year,
prepared in accordance with U.S. generally accepted accounting principles
(“GAAP”),
applied on a consistent basis during the periods involved, except as indicated
therein or in the notes thereto, audited by nationally recognized independent
accounting firm experienced with rapidly growing companies selected by the
Company.
(b) As
soon
as practicable after the end of each of the first three (3) quarterly accounting
periods in each fiscal year of the Company, and in any event within forty five
(45) days after the end of each such quarterly accounting period, (i) an
unaudited consolidated balance sheet of the Company and its subsidiaries, if
any, as at the end of such quarterly accounting period, and unaudited
consolidated statements of income and cash flows of the Company and its
subsidiaries, if any, for such fiscal period, prepared in accordance with GAAP,
applied on a consistent basis during the periods involved, subject to normal
year-end audit adjustments, together with an appropriately detailed and
informative discussion and review by management of the financial results and
performance of the Company and material developments in its business during
such
fiscal period, and
(ii)
a statement showing the number of shares of each class and series of capital
stock and securities convertible into or exercisable for shares of capital
stock
outstanding at the end of the period, the number of common shares issuable
upon
conversion or exercise of any outstanding securities convertible or exercisable
for common shares and the exchange ratio or exercise price applicable thereto,
all in sufficient detail as to permit the Investor to calculate its percentage
equity ownership in the Company.
(c) As
soon
as practicable after the end of each month, and in any event within thirty
(30)
days after the end of each month, an unaudited consolidated balance sheet of
the
Company and its subsidiaries, if any, as at the end of such month, and unaudited
consolidated statements of income and cash flows of the Company and its
subsidiaries, if any, for such month, prepared in accordance with GAAP, applied
on a consistent basis during the period involved, subject to normal year-end
audit adjustments.
(d) At
least
thirty (30) days prior to the beginning of each fiscal year, an annual budget
and operating plans of the Company for such fiscal year (and as soon as
available, any subsequent revisions thereto), such annual budget and operating
plans (including an subsequent revisions thereto) to be approved by the
Board.
13.“Market
Stand-Off” Agreement.
Each of
the Investors hereby agrees that it will not, without the prior written consent
of the managing underwriter, during the period commencing on the date of the
final prospectus relating to the Company’s Initial Public Offering and ending on
the date specified by the Company and the managing underwriter (such period
not
to exceed one hundred eighty (l80) days) (i) lend, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock held immediately prior to the effectiveness of the Registration
Statement for such offering, or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise. The foregoing provisions
of this Section 13
shall
only be applicable to the Investors if all officers, directors and greater
than
one percent (1%) shareholders of the Company enter into similar agreements.
The
underwriters in connection with the Company’s Initial Public Offering are
intended third-party beneficiaries of this Section 13
and
shall have the right, power and authority to enforce the provisions hereof
as
though they were a party hereto. Each of the Investors further agrees to execute
such agreements as may be reasonably requested by the underwriters in the
Company’s Initial Public Offering that are consistent with this Section 13
or that
are necessary to give further effect thereto. Any discretionary waiver or
termination of the restrictions of any or all of such agreements by the Company
or the underwriters shall apply to all of the parties subject thereto, including
the Investors, pro rata based on the number of shares subject to such
restrictions.
14.Qualifying
Holders’ Participation Rights in Subsequent Financings.
(a) Subject
to applicable securities laws, following the Closing and prior to the Qualified
Public Offering, the Company shall not, and shall not agree to, issue, sell
or
exchange any Equity Securities in a financing transaction (any transaction
other
than the excluded transactions described in subsection (c) below being deemed
to
be a financing transaction) (a “Financing”),
unless the Company shall have first complied with this Section
14.
The
Company shall deliver to each Qualifying Holder a written notice (the
“Offer”)
of any
proposed or intended Financing and offer to each Qualifying Holder the
opportunity, but not the obligation, to participate in its pro rata share of
the
Financing determined, in aggregate, by multiplying the total amount of the
Financing by a fraction, the numerator of which is (i) the number of shares
of
Fully Diluted Common Stock held by such Qualifying Holder as of the date
immediately prior to the issuance of such Equity Securities (such date being
the
“Measuring
Date”),
and
the denominator of which is (ii) the total number of shares of Fully Diluted
Common Stock outstanding as of the Measuring Date. The Offer shall describe
the
terms, including price and amount, of the Financing and include a reasonably
detailed calculation of each Qualifying Holder’s participation right in
accordance with the foregoing. Each Qualifying Holder shall provide written
notice to the Company within ten (10)Business
Days from the giving of the Offer (the “Election
Period”)
of the
amount, if any, of the Financing as to which they intend to exercise their
participation right as provided above and to indicate whether such Qualifying
Holder desires to exercise its over-allotment option as provided in subsection
(b) below.
(b) In
the
event any of the Qualifying Holders, or any other securityholder of the Company
with similar participation rights, decline or fail within the required periods
to exercise fully their respective participation rights, the Company shall
provide a further written notice to fully exercising Qualifying Holders of
the
amount of such Financing not subscribed for pursuant to such rights. The fully
exercising Qualifying Holders shall have the right, exercisable by written
notice to the Company within five (5) Business Days from the giving of such
further notice by the Company (the “Over-Allotment
Period”),
to
subscribe for a pro rata share of the unsubscribed portion of the Financing
on
the basis of the number of shares of Fully Diluted Common Stock held by fully
exercising Qualifying Holders and other fully exercising security-holders of
the
Company. The closing of the Qualified Holder’s participation, and additional
participation, if any, shall occur at the time contemplated in the Offer, but
in
any case, not any earlier than ten (10) days after the later of the Election
Period and the Over-Allotment Period, if any, at which time the Qualified Holder
shall receive certificates for such Qualifying Holder’s Equity Securities
against payment therefor in immediately available funds. The Company shall
have
ninety (90)days
from
the end of the Over-Allotment Period, if any, to complete the unsubscribed
portion of the Financing on terms not more materially advantageous to purchasers
in the Financing than those described in the Offer. The Company shall comply
anew with the requirements, as to an Offer and otherwise, of this Section
14
as to
any Financing not completed within such period.
(c) The
foregoing right of first offer shall not apply to any of the
following:
(i) the
conversion of the Series A Preferred Stock or Series B Preferred
Stock;
(ii) the
exercise of Warrants;
(iii) shares
of
Common Stock (or options thereon) (subject to adjustment for any stock splits,
reverse stock splits, combinations or similar events affecting the Common Stock
after the date of this Agreement) issued after the Closing Date to employees,
officers or directors of, or consultants or advisors to the Company or any
subsidiary thereof pursuant to stock purchase or stock option plans or other
compensatory arrangements (collectively, “Plans”);
provided,
however,
that any
such issuances are approved in accordance with the Certificate of
Designations;
(iv) Equity
Securities issued pursuant to any rights or agreements, options, warrants or
convertible securities that are outstanding as of the date of this Agreement
or
that are issued or granted thereafter; provided,
however,
that the
transaction pursuant to which such rights or agreements, options, warrants
or
convertible securities are issued or granted after the Date of this Agreement
was conducted in compliance with this Section
14;
(v) any
Equity Securities issued or issuable in connection with any stock split, stock
dividend or recapitalization by the Company for which adjustment is made
pursuant to Section 5 of the Certificate of Designations;
(vi) any
Equity Securities that are issued by the Company in a Qualified Public
Offering;
(vii) any
Equity Securities issued in connection with bona fide acquisitions, mergers
or
other strategic transactions approved by the Board; and
(viii) any
Equity Securities issued to any Person as a component of any business
relationship with such Person, the terms of which business relationship and
transaction are approved by the Board, primarily for (x) joint venture,
technology licensing or development activities purposes, (y) purposes of
distribution, supply or manufacture of the Company’s products or services or (z)
any purposes other than raising capital.
15.Entire
Agreement.
This
Agreement, the Securities Purchase Agreement, the Certificate of Designations
and the Warrants constitute and contain the entire agreement and understanding
of the parties with respect to the subject matter hereof and supersede any
and
all prior negotiations, correspondence, agreements or understandings with
respect to the subject matter hereof.
16.Transfer
of Rights.
Subject
to Section 9, each Investor may assign or transfer any or all of its rights
under this Agreement to any Person, provided such assignee or transferee agrees
in writing to be bound by the provisions hereof. Upon any such, and each
successive, assignment or transfer to any permitted assignee or transferee
in
accordance with the terms of this Section
16,
such
permitted assignee or transferee shall be deemed to be an “Investor”
for
all
purposes of this Agreement.
17.Inspection
Rights.
Each
Qualifying Holder, or any officer, employee, agent or representative thereof,
shall have the right to visit and inspect any of the properties of the Company
and its subsidiaries to discuss the affairs, finances, accounts and operations
of the Company and its subsidiaries with their respective officers, directors,
employees, agents or representatives, and to review and copy such information
as
reasonably requested from time to time.
18.Miscellaneous.
(a) This
Agreement, and any right, term or provision contained herein, may not be
amended, modified or terminated, and no right, term or provision may be waived,
except with the written consent of (i) the holders of a majority of the Series
B
Preferred Stock and (ii) the Company; provided,
however,
that any
amendment or modification that is materially and disproportionately adverse
to
any particular Investor (as compared to all Investors as a group) shall require
the consent of such Investor.
(b) This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of Delaware, without giving effect to conflicts of laws
principles thereof. Any action or proceeding seeking to enforce any provision
of, or based on any right arising out of, this Agreement shall be adjudicated
in
the Supreme Court of the State of New York, New York County, or the United
States District Court for the Southern District of New York and each party
expressly consents to the jurisdiction of such courts in any such adjudication
and expressly waives any objection to venue laid therein.
(c) This
Agreement shall be binding upon the parties hereto and their respective heirs,
personal representatives, successors and permitted assigns and transferees,
provided that, with respect to any transfer of rights by any Investor, the
terms
and conditions of Section
16
are
satisfied.
(d) Any
notices to be given pursuant to this Agreement shall be in writing and shall
be
given by certified or registered mail, return receipt request. Notices shall
be
deemed given when personally delivered or when mailed to the addresses of the
respective parties as set forth on Exhibit
A,
Schedule
1
and
Schedule
2
hereto,
as applicable, or to such changed address of which any party may notify the
others pursuant hereto, except that a notice of change of address shall be
deemed given when received. An electronic communication (“Electronic
Notice”)
shall
be deemed written notice for purposes of this Section
18(d)
if sent
with return receipt requested to the electronic mail address specified by the
receiving party on Exhibit
A,
Schedule
1
and
Schedule
2
hereto,
as applicable. Electronic Notice shall be deemed received at the time the party
sending Electronic Notice receives verification of receipt by the receiving
party.
(e) The
parties acknowledge and agree that in the event of any breach of this Agreement,
remedies at law will be inadequate, and each of the parties hereto shall be
entitled to specific performance of the obligations of the other parties hereto
and to such appropriate injunctive relief as may be granted by a court of
competent jurisdiction. All remedies, either under this Agreement or by law
or
otherwise afforded to any of the parties, shall be cumulative and not
alternative.
(f) This
Agreement may be executed in a number of counterparts. All such counterparts
together shall constitute one Agreement and shall be binding on all the parties
hereto notwithstanding that all such parties have not signed the same
counterpart. The parties hereto confirm that any facsimile copy of another
party’s executed counterpart of this Agreement (or its signature page thereof)
will be deemed to be an executed original thereof.
(g) Except
as
contemplated in Section
7,
Section
14,
and
Section
16
hereof,
this Agreement is intended solely for the benefit of the parties hereto and
is
not intended to confer any benefits upon, or create any rights in favor of,
any
Person (including, without limitation, any stockholder or debt holder of the
Company) other than the parties hereto.
(h) If
any
provision of this Agreement is invalid, illegal or unenforceable, such provision
shall be ineffective to the extent, but only to the extent of, such invalidity,
illegality or unenforceability, without invalidating the remainder of such
provision or the remaining provisions of this Agreement, unless such a
construction would be unreasonable.
[Signature
Pages Follow]
IN
WITNESS WHEREOF, the parties hereto have executed this Investors’ Rights
Agreement as of the date and year first above written.
THE
COMPANY:
UNI-PIXEL,
INC.
By:_____________________________
Name:
Reed J. Killion
Title:
President
INVESTORS:
TUDOR
INVESTMENT CORP., as investment adviser
to
each Investor listed on Schedule 1 (other than Tudor
Proprietary
Trading, L. L. C.)
By:
Name:
Title:
TUDOR
PROPRIETARY TRADING, L.L.C.
By:
Name:
Title:
Dates Referenced Herein and Documents Incorporated by Reference
