**EXHIBIT 4.4**

April 23, 2002

 

 

To the Stockholders of Apothogen, Inc.

 Listed on the Signature Page hereto

 

**Re:          IntraBiotics Pharmaceuticals, Inc. —Registration Rights**

 

Gentlemen:

 

In connection with theAgreement and Plan of Merger and Reorganization (the “Merger Agreement”) amongIntraBiotics Pharmaceuticals, Inc., a Delaware corporation (“IntraBiotics”),APN Acquisition Corp., Apothogen, Inc., a Delaware corporation, and thestockholders of Apothogen (the “Stockholders”) entered into on even date herewith,as an additional inducement for the Stockholders to enter into the MergerAgreement, IntraBiotics hereby agrees to grant to the Stockholders certainregistration rights relating to the shares of Common Stock to be issued byIntraBiotics to the Stockholders pursuant to the Merger Agreement (the“Shares”).  Capitalized terms usedherein but not defined shall have the meanings ascribed to them in the MergerAgreement.

 

If within six (6) monthsfrom the Closing Date, IntraBiotics proposes to file under the Securities Actof 1933, as amended (the “Act”) a resale registration statement on Form S-1 orForm S-3 (a “Resale Registration Statement”) with respect to its common stock,then IntraBiotics shall, at such time, promptly give to each Stockholderwritten notice of such proposed registration. Upon the written request of any Stockholder given within ten (10)business days after mailing of such notice by IntraBiotics, IntraBiotics shalltake commercially reasonable steps to cause to be registered under the Act theShares that such Stockholder has requested to be registered, subject to thelimitations set forth in **Attachment I**hereto.

 

If no Resale RegistrationStatement is filed by IntraBiotics and IntraBiotics receives at any time afterthe earlier of (i) six (6) months following the Closing Date and (ii) one (1)month following the effective date of a registration statement for a publicoffering of securities of IntraBiotics (other than a registration relatingsolely to the sale of securities to participants in an IntraBiotics stock plan,any corporate reorganization or transaction under Rule 145 of the Act,including any registration statements related to the issuance or resale ofsecurities issued in such a transaction, or a registration in which the onlycommon stock being registered is common stock issuable upon conversion of debtsecurities which are also being registered), a written request from the holdersof a majority of the Shares that IntraBiotics file a registration statementunder the Act, the gross proceeds resulting from the sale of the Shares or anyother shares of IntraBiotics common stock included in such registrationstatement, of which would exceed $1,000,000, then IntraBiotics shall givewritten notice of such request to all Stockholders and shall take commerciallyreasonable steps to effect the registration under the Act of the Shares whichthe holders request to be registered, subject to the limitations set forth in **Attachment I** hereto.

 

Please indicate youragreement with the terms of this letter agreement by executing it in the spaceprovided below.

 

 

----

 
|   |   |   |   |   | Very truly yours,                      |               |   |
|--------|--------|--------|--------|--------|----------------------------------------|--------------------|--------|
|   |   |   |   |   |                                   |               |   |
|   |   |   |   |   | **INTRABIOTICS PHARMACEUTICALS, INC.** |
|   |   |   |   |   |                                   |               |
|   |   |   |   |   | By:                                    | /s/ Henry J. Fuchs |
|   |   |   |   |   | Name:                                  |               |
|   |   |   |   |   | Title:                                 |               |
|        |        |        |        |        |                                        |                    |        |  |

 
| **AGREED AND ACCEPTED:**                     |                             |   |   |
|----------------------------------------------|----------------------------------|--------|--------|
|                                         |                             |   |   |
| **J.P. MORGAN PARTNERS (BHCA), L.P.**        |                             |
|                                         |                             |   |   |
| By:                                          | JPMP Master Fund Manager,  L.P., |   |   |
|                                         | its general partner              |   |   |
| By:                                          | JPMP Capital Corp.,              |   |   |
|                                         | its general partner              |   |   |
| By:                                          | /s/ Mitchell Blutt               |   |   |
| Name:                                        | Mitchell Blutt                   |   |   |
| Title:                                       | Partner                          |   |   |
|                                         |                             |   |   |
| **PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.** |                             |
|                                         |                             |   |   |
| By:                                          | /s/ Fred B. Davenport, Jr.       |   |   |
| Name:                                        | Fred B. Davenport, Jr.           |   |   |
| Title:                                       | President                        |   |   |
|                                         |                             |   |   |
| /s/ Ernest Mario                             |                             |   |
| **ERNEST MARIO**                             |                             |   |
|                                         |                             |   |   |
| /s/ Frederic Eshelman                        |                             |   |
| **FREDERIC ESHELMAN**                        |                             |   |
|                                         |                             |   |   |
| /s/ James Butler                             |                             |   |
| **JAMES BUTLER**                             |                             |   |
|                                         |                             |   |   |
|                                              |                                  |        |        |  |  |  |

 
| **MARIO 2002 CHILDREN’S TRUST** |             | **MARIO 2002 GRANDCHILDREN’S TRUST** |   |             |
|--------------------------------------|------------------|-------------------------------------------|--------|------------------|
|                                 |             |                                      |   |             |
| By:                                  | /s/ Ernest Mario |                                      | By:    | /s/ Ernest Mario |   |   |
| Ernest Mario, Trustee                |             | Ernest Mario, Trustee                     |   |             |
|                                      |                  |                                           |        |                  |  |  |

 

 

2

----

 

**AttachmentI — Registration Rights**

**1.****                                     ****REGISTRATION RIGHTS****.**  The Company covenants and agrees as follows:

**1.1          Definitions**. For purposes of this Attachment I:

**(i)           **The term “Act” means the Securities Act of 1933, asamended.

**(ii)          **The term “Holder” means any holder of RegistrableSecurities.

**(iii)        **The term “1934 Act” shall mean the Securities ExchangeAct of 1934, as amended.

**(iv)         **The term “register,” “registered,” and “registration”refer to a registration effected by preparing and filing a registrationstatement or similar document in compliance with the Act, and the declarationor ordering of effectiveness of such registration statement or document.

**(v)           **The term “Registrable Securities” means the Shares.

**(vi)         **The term “SEC” shall mean the Securities and ExchangeCommission.

**1.2          Request for Registration**.

**(a)**           Ifthe Company shall receive at any time after the earlier of (i) six (6) monthsfollowing the Closing Date, or (ii) one (1) month after the effective date of aregistration statement for a public offering of securities of the Company(other than a registration statement relating either to the sale of securitiesto employees of the Company pursuant to a stock option, stock purchase orsimilar plan or a SEC Rule 145 transaction), a written request from the Holdersof a majority of the Registrable Securities then outstanding that the Companyfile a registration statement under the Act, the gross proceeds resulting fromthe sale of the Shares or any other shares of the Company’s Common Stockincluded in such registration statement, of which would exceed $1,000,000, thenthe Company shall:

**(i)           **within ten (10) days of the receipt thereof, givewritten notice of such request to all Holders; and

**(ii)          **effect as soon as practicable, and in any event withinsixty (60) days of the receipt of such request, the registration under the Actof all Registrable Securities which the Holders request to be registered,subject to the limitations of subsection 1.2(b), within twenty (20) days of themailing of such notice by the Company.

**(b)          **If the Holders initiating the registration requesthereunder (“Initiating Holders”) intend to distribute the RegistrableSecurities covered by their request by means of an underwriting, they shall soadvise the Company as a part of their request made pursuant to subsection1.2(a) and the Company shall include such information in the written noticereferred to in subsection 1.2(a).  Theunderwriter will be selected by the Company and shall be reasonably acceptableto a majority in interest of the Initiating Holders.  In such event, the right of any Holder to include such Holder’sRegistrable Securities in such registration shall be conditioned upon suchHolder’s participation in such underwriting and the inclusion of such Holder’sRegistrable Securities in the underwriting (unless otherwise mutually agreed bya majority in interest of the Initiating Holders and such Holder) to the 

 

3

----

 

extent providedherein.  All Holders proposing todistribute their securities through such underwriting shall (together with theCompany as provided in subsection 1.4(e)) enter into an underwriting agreementin customary form with the underwriter or underwriters selected for suchunderwriting.  Notwithstanding any otherprovision of this Section 1.2, if the underwriter advises the InitiatingHolders in writing that marketing factors require a limitation of the number ofshares to be underwritten, then the Initiating Holders shall so advise allHolders of Registrable Securities which would otherwise be underwrittenpursuant hereto, and the number of shares of Registrable Securities that may beincluded in the underwriting shall be allocated among all Holders thereof,including the Initiating Holders, in proportion (as nearly as practicable) tothe amount of Registrable Securities of the Company owned by each Holder;provided, however, that the number of shares of Registrable Securities to beincluded in such underwriting shall not be reduced unless all other securitiesare first entirely excluded from the underwriting.

**(c)          **Notwithstanding the foregoing, if the Company shallfurnish to Holders requesting a registration pursuant to this Section 1.2, acertificate signed by the Chief Executive Officer of the Company stating thatin the good faith judgment of the Board of Directors of the Company, it wouldbe seriously detrimental to the Company and its stockholders for suchregistration statement to be filed and it is therefore essential to defer thefiling of such registration statement, the Company shall have the right todefer taking action with respect to such filing for a period of not more thanone hundred twenty (120) days after receipt of the request of the InitiatingHolders; provided, however, that the Company may not utilize this right morethan once in any twelve-month period.

**(d)          **In addition, the Company shall not be obligated toeffect, or take any action to effect, any registration pursuant to this Section1.2:

**(i)           **after the Company has effected two registrationspursuant to this Section 1.2 and such registrations have been declared orordered effective; or

**(ii)          **during the period starting with the date of filing of,and ending on a date one hundred eighty (180) days after the effective date of,a registration subject to Section 1.3 hereof; provided that the Company isactively employing in good faith all reasonable efforts to cause suchregistration statement to become effective.

**1.3          Company Registration**. If (but without any obligation to do so) the Company proposes to file aresale registration statement with the SEC for the purpose of effecting aregistration for stockholders other than the Holders of its stock or othersecurities under the Act (other than a registration relating solely to the saleof securities to participants in a Company stock plan, a registration on anyform which does not include substantially the same information as would berequired to be included in a registration statement covering the sale of theRegistrable Securities or a registration in which the only Common Stock beingregistered is Common Stock issuable upon conversion of debt securities whichare also being registered), the Company shall, at such time, promptly give eachHolder written notice of such proposed registration.  Upon the written request of each Holder given within ten (10)days after mailing of such notice by the Company, the Company shall, cause tobe registered under the Act all of the Registrable Securities that each suchHolder has requested to be registered.

**1.4          Obligations of the Company**. Whenever required under this Section 1 to effect the registration of anyRegistrable Securities, the Company shall, as expeditiously as reasonablypossible:

**(a)          **Prepare and file with the SEC a registration statementwith respect to such Registrable Securities and use its best efforts to causesuch registration statement to become effective, and, upon the request of theHolders of a majority of the Registrable Securities registered 

 

4

----

 

thereunder, keepsuch registration statement effective for a period of up to one hundred twenty(120) days or until the distribution contemplated in the registration statementhas been completed; provided, however, that (i) such 120-day period shall beextended for a period of time equal to the period the Holder refrains fromselling any securities included in such registration at the request of anunderwriter of Common Stock (or other securities) of the Company; and (ii) inthe case of any registration of Registrable Securities on Form S-3 which areintended to be offered on a continuous or delayed basis, such 120-day periodshall be extended, if necessary, to keep the registration statement effectiveuntil all such Registrable Securities are sold, provided that Rule 415, or anysuccessor rule under the Act, permits an offering on a continuous or delayedbasis, and provided further that applicable rules under the Act governing theobligation to file a post-effective amendment permit, in lieu of filing apost-effective amendment which (I) includes any prospectus required by Section10(a)(3) of the Act or (II) reflects facts or events representing a material offundamental change in the information set forth in the registration statement,the incorporation by reference of information required to be included in (I)and (II) above to be contained in periodic reports filed pursuant to Section 13or 15(d) of the 1934 Act in the registration statement.

**(b)          **Prepare and file with the SEC such amendments andsupplements to such registration statement and the prospectus used inconnection with such registration statement as may be necessary to comply withthe provisions of the Act with respect to the disposition of all securitiescovered by such registration statement.

**(c)          **Furnish to the Holders such numbers of copies of aprospectus, including a preliminary prospectus, in conformity with therequirements of the Act, and such other documents as they may reasonablyrequest in order to facilitate the disposition of Registrable Securities ownedby them.

**(d)          **Use its best efforts to register and qualify thesecurities covered by such registration statement under such other securitiesor Blue Sky laws of such jurisdictions as shall be reasonably requested by theHolders; provided that the Company shall not be required in connectiontherewith or as a condition thereto to qualify to do business or to file ageneral consent to service of process in any such states or jurisdictions,unless the Company is already subject to service in such jurisdiction andexcept as may be required by the Act.

**(e)          **In the event of any underwritten public offering,enter into and perform its obligations under an underwriting agreement, inusual and customary form, with the managing underwriter of such offering.  Each Holder participating in suchunderwriting shall also enter into and perform its obligations under such anagreement.

**(f)           **Notify each Holder of Registrable Securities coveredby such registration statement at any time when a prospectus relating theretois required to be delivered under the Act of the happening of any event as aresult of which the prospectus included in such registration statement, as thenin effect, includes an untrue statement of a material fact or omits to state amaterial fact required to be stated therein or necessary to make the statementstherein not misleading in the light of the circumstances then existing.

**(g)          **Cause all such Registrable Securities registeredpursuant hereto to be listed on each securities exchange on which similarsecurities issued by the Company are then listed.

**(h)**           Provide a transfer agent andregistrar for all Registrable Securities registered pursuant hereto and a CUSIPnumber for all such Registrable Securities, in each case not later than theeffective date of such registration.

5

----

 

**(i)           **Furnish, at the request of any Holder requestingregistration of Registrable Securities pursuant to this Section 1, on the datethat such Registrable Securities are delivered to the underwriters for sale inconnection with a registration pursuant to this Section 1, if such securitiesare being sold through underwriters, or, if such securities are not being soldthrough underwriters, on the date that the registration statement with respectto such securities becomes effective, (i) an opinion, dated such date, of thecounsel representing the Company for the purposes of such registration, in formand substance as is customarily given to underwriters in an underwritten publicoffering, addressed to the underwriters, if any, and to the Holders requestingregistration of Registrable Securities and (ii) a letter dated such date, fromthe independent certified public accountants of the Company, in form andsubstance as is customarily given by independent certified public accountantsto underwriters in an underwritten public offering, addressed to theunderwriters, if any, and to the Holders requesting registration of RegistrableSecurities.

**1.5          Furnish Information**. It shall be a condition precedent to the obligations of the Company totake any action pursuant to this Section 1 with respect to the RegistrableSecurities of any selling Holder that such Holder shall furnish to the Companysuch information regarding itself, the Registrable Securities held by it, andthe intended method of disposition of such securities as shall be required toeffect the registration of such Holder’s Registrable Securities.

**1.6          Expenses of Demand Registration**. All expenses other than underwriting discounts and commissions incurredin connection with registrations, filings or qualifications pursuant to Section1.2, including (without limitation) all registration, filing and qualificationfees, printers’ and accounting fees, fees and disbursements of counsel for theCompany and the reasonable fees and disbursements of one counsel for theselling Holders shall be borne by the Company; provided, however that theCompany shall not be required to pay for any expenses of any registrationproceeding begun pursuant to Section 1.2 if the registration request issubsequently withdrawn at the request of the Holders of a majority of theRegistrable Securities to be registered (in which case all participatingHolders shall bear such expenses), unless the Holders of a majority of theRegistrable Securities agree to forfeit their right to one demand registrationpursuant to Section 1.2; provided further, however, that if at the time of suchwithdrawal, the Holders have learned of a material adverse change in thecondition, business, or prospects of the Company from that known to the Holdersat the time of their request and have withdrawn the request with reasonablepromptness following disclosure by the Company of such material adverse change,then the Holders shall not be required to pay any of such expenses and shallretain their rights pursuant to Section 1.2.

**1.7          Expenses of Company Registration**. The Company shall bear and pay all expenses incurred in connection withany registration, filing or qualification of Registrable Securities withrespect to the registrations pursuant to Section 1.3 for each Holder (whichright may be assigned as provided in Section 1.11), including (withoutlimitation) all registration, filing and qualification fees, printers andaccounting fees relating or apportionable thereto and the fees anddisbursements of one counsel for the selling Holders selected by them, butexcluding underwriting discounts and commissions relating to RegistrableSecurities.

**1.8          Underwriting Requirements**. In connection with any offering involving an underwriting of shares ofthe Company’s capital stock, the Company shall not be required to include anyof the Holders’ securities in such underwriting unless they accept the terms ofthe underwriting as agreed upon between the Company and the underwritersselected by it (or by other persons entitled to select the underwriters), andthen only in such quantity as the underwriters determine in their solediscretion will not jeopardize the success of the offering by the Company.  If the total amount of securities, includingRegistrable Securities, requested by stockholders to be included in suchoffering exceeds the amount of securities sold other than by the Company thatthe underwriters determine in their sole discretion is 

 

6

----

 

compatible with thesuccess of the offering, then the Company shall be required to include in theoffering only that number of such securities, including Registrable Securities,which the underwriters determine in their sole discretion will not jeopardizethe success of the offering (the securities so included to be apportioned prorata among the selling stockholders according to the total amount of securitiesentitled to be included therein owned by each selling stockholder or in suchother proportions as shall mutually be agreed to by such selling stockholders)but in no event shall (i) the amount of securities of the selling Holdersincluded in the offering be reduced below twenty percent (20%) of the totalamount of securities included in such offering, or (ii) notwithstanding (i)above, any shares being sold by a stockholder exercising a demand registrationright similar to that granted in Section 1.2 be excluded from suchoffering.  For purposes of the precedingparenthetical concerning apportionment, for any selling stockholder which is aHolder of Registrable Securities and which is a partnership or corporation, thepartners, retired partners and stockholders of such Holder, or the estates andfamily members of any such partners and retired partners and any trusts for thebenefit of any of the foregoing persons shall be deemed to be a single “sellingstockholder,” and any pro-rata reduction with respect to such “sellingstockholder,” shall be based upon the aggregate amount of shares carryingregistration rights owned by all entities and individuals included in such“selling stockholder,” as defined in this sentence.

**1.9          Delay of Registration**. No Holder shall have any right to obtain or seek an injunctionrestraining or otherwise delaying any such registration as the result of anycontroversy that might arise with respect to the interpretation orimplementation of this Section 1.

**1.10        Indemnification**. In the event any Registrable Securities are included in a registrationstatement under this Section 1:

**(a)          **To the extent permitted by law, the Company willindemnify and hold harmless each Holder, any underwriter (as defined in theAct) for such Holder and each person, if any, who controls such Holder orunderwriter within the meaning of the Act or the 1934 Act, against any losses,claims, damages or liabilities (joint or several) to which they may becomesubject under the Act, the 1934 Act or other federal or state law, insofar assuch losses, claims, damages or liabilities (or actions in respect thereof)arise out of or are based upon any of the following statements, omissions orviolations (each, a “Violation”): (i) any untrue statement or alleged untruestatement of a material fact contained in such registration statement,including any preliminary prospectus or final prospectus contained therein orany amendments or supplements thereto, (ii) the omission or alleged omission tostate therein a material fact required to be stated therein, or necessary tomake the statements therein not misleading, or (iii) any violation or allegedviolation by the Company of the Act, the 1934 Act, any state securities law orany rule or regulation promulgated under the Act, or the 1934 Act or any statesecurities law; and the Company will pay to each such Holder, underwriter orcontrolling person, as incurred, any legal or other expenses reasonablyincurred by them in connection with investigating or defending any such loss,claim, damage, liability or action; provided, however, that the indemnityagreement contained in this subsection 1.10(a) shall not apply to amounts paidin settlement of any such loss, claim, damage, liability or action if suchsettlement is effected without the consent of the Company (which consent shallnot be unreasonably withheld), nor shall the Company be liable in any such casefor any such loss, claim, damage, liability or action to the extent that itarises out of or is based upon a Violation which occurs in reliance upon and inconformity with written information furnished expressly for use in connectionwith such registration by any such Holder, underwriter or controlling person.

**(b)          **To the extent permitted by law, each selling Holderwill indemnify and hold harmless the Company, each of its directors, each ofits officers who has signed the registration statement, each person, if any,who controls the Company within the meaning of the Act, any underwriter, anyother Holder selling securities in such registration statement and anycontrolling person of any such underwriter or other Holder, against any losses,claims, damages or liabilities (joint or several) to 

 

7

----

 

which any of theforegoing persons may become subject, under the Act, or the 1934 Act or otherfederal or state law, insofar as such losses, claims, damages or liabilities(or actions in respect thereto) arise out of or are based upon any Violation,in each case to the extent (and only to the extent) that such Violation occursin reliance upon and in conformity with written information furnished by suchHolder expressly for use in connection with such registration; and each suchHolder will pay, as incurred, any legal or other expenses reasonably incurredby any person intended to be indemnified pursuant to this subsection 1.10(b),in connection with investigating or defending any such loss, claim, damage,liability or action; provided, however, that the indemnity agreement containedin this subsection 1.10(b), shall not apply to amounts paid in settlement ofany such loss, claim, damage, liability or action if such settlement iseffected without the consent of the Holder, which consent shall not beunreasonably withheld; provided, that, in no event shall any indemnity underthis subsection 1.10(b) exceed the gross proceeds from the offering received bysuch Holder.

**(c)          **Promptly after receipt by an indemnified party underthis Section 1.10 of notice of the commencement of any action (including anygovernmental action), such indemnified party will, if a claim in respectthereof is to be made against any indemnifying party under this Section 1.10,deliver to the indemnifying party a written notice of the commencement thereofand the indemnifying party shall have the right to participate in, and, to theextent the indemnifying party so desires, jointly with any other indemnifyingparty similarly noticed, to assume the defense thereof with counsel mutuallysatisfactory to the parties; provided, however, that an indemnified party(together with all other indemnified parties which may be represented withoutconflict by one counsel) shall have the right to retain one separate counsel,with the fees and expenses to be paid by the indemnifying party, ifrepresentation of such indemnified party by the counsel retained by theindemnifying party would be inappropriate due to actual or potential differinginterests between such indemnified party and any other party represented bysuch counsel in such proceeding.  Thefailure to deliver written notice to the indemnifying party within a reasonabletime of the commencement of any such action, if prejudicial to its ability todefend such action, shall relieve such indemnifying party of any liability tothe indemnified party under this Section 1.10, but the omission so to deliverwritten notice to the indemnifying party will not relieve it of any liabilitythat it may have to any indemnified party otherwise than under this Section1.10.

**(d)          **If the indemnification provided for in this Section1.10 is held by a court of competent jurisdiction to be unavailable to anindemnified party with respect to any loss, liability, claim, damage or expensereferred to therein, then the indemnifying party, in lieu of indemnifying suchindemnified party hereunder, shall contribute to the amount paid or payable bysuch indemnified party as a result of such loss, liability, claim, damage orexpense in such proportion as is appropriate to reflect the relative fault ofthe indemnifying party on the one hand and of the indemnified party on theother in connection with the statements or omissions that resulted in suchloss, liability, claim, damage or expense as well as any other relevantequitable considerations.  The relativefault of the indemnifying party and of the indemnified party shall bedetermined by reference to, among other things, whether the untrue or allegeduntrue statement of a material fact or the omission to state a material factrelates to information supplied by the indemnifying party or by the indemnifiedparty and the parties’ relative intent, knowledge, access to information, andopportunity to correct or prevent such statement or omission.

**(e)          **Notwithstanding the foregoing, to the extent that theprovisions on indemnification and contribution contained in the underwritingagreement entered into in connection with the underwritten public offering arein conflict with the foregoing provisions, the provisions in the underwritingagreement shall control.

 

8

----

 

**(f)           **The obligations of the Company and Holders under thisSection 1.10 shall survive the completion of any offering of RegistrableSecurities in a registration statement under this Section 1, and otherwise.

**1.11        Assignment of Registration Rights**. The rights to cause the Company to register Registrable Securitiespursuant to this Section 1 may be assigned (but only with all relatedobligations) by a Holder to a transferee or assignee of such securities who,after such assignment or transfer, holds at least 100,000 shares of RegistrableSecurities (subject to appropriate adjustment for stock splits, stockdividends, combinations and other recapitalizations), provided:  (a) the Company is, within a reasonable timeafter such transfer, furnished with written notice of the name and address ofsuch transferee or assignee and the securities with respect to which suchregistration rights are being assigned; (b) such transferee or assignee agreesin writing to be bound by and subject to the terms and conditions of thisAgreement; and (c) such assignment shall be effective only if immediatelyfollowing such transfer the further disposition of such securities by thetransferee or assignee is restricted under the Act.  For the purposes of determining the number of shares ofRegistrable Securities held by a transferee or assignee, the holdings oftransferees and assignees of a partnership who are partners or retired partnersof such partnership (including spouses and ancestors, lineal descendants andsiblings of such partners or spouses who acquire Registrable Securities bygift, will or intestate succession) shall be aggregated together and with thepartnership; provided that all assignees and transferees who would not qualifyindividually for assignment of registration rights shall have a singleattorney-in-fact for the purpose of exercising any rights, receiving notices ortaking any action under Section 1.

**1.12        Termination of Registration Rights**.

**(a)          **No Holder shall be entitled to exercise any rightprovided for in this Section 1 after five (5) years following the consummationof the sale of securities pursuant to a registration statement filed by theCompany under the Act in connection with the initial firm commitmentunderwritten offering of its securities to the general public.

**(b)          **In addition, the right of any Holder to requestregistration or inclusion in any registration pursuant to this Section shall besuspended during any period of time when all shares of Registrable Securitiesheld or entitled to be held upon conversion by such Holder may immediately besold under Rule 144 under the Act during any 90-day period, or on such dateafter the closing of the first Company-initiated registered public offering ofCommon Stock of the Company as all shares of Registrable Securities held orentitled to be held upon conversion by such Holder may immediately be soldunder Rule 144 during any 90-day period; provided, however, that the provisionsof this Section 1.16(b) shall not apply to any Holder who owns more than onepercent (1%) of the Company’s outstanding stock until such time as such Holderowns less than one percent (1%) of the outstanding stock of the Company.

 

9

----