Exhibit 10.2


 


EXECUTION
COPY


 


REGISTRATION
RIGHTS AGREEMENT


 


This Registration Rights Agreement (the “Agreement”)
is made and entered into as of this 5th day of April, 2006 by and among
Tapestry Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and the “Investors” named in that certain Purchase Agreement by and among the
Company and the Investors (the “Purchase Agreement”).


 


The parties hereby agree as follows:


 


1.               Certain
Definitions.


 


As used in this Agreement, the following
terms shall have the following meanings:


 


“Affiliate” means, with respect to any
person, any other person which directly or indirectly controls, is controlled
by, or is under common control with, such person.


 


“Business Day” means a day, other than
a Saturday or Sunday, on which banks in New York City and Boulder, Colorado are
open for the general transaction of business.


 


“Common Stock” shall mean the Company’s
common stock, par value $0.0075 per share, and any securities into which such
shares may hereinafter be reclassified.


 


“Investors” shall mean the Investors
identified in the Purchase Agreement and any Affiliate or permitted transferee
of any Investor who is a subsequent holder of any Warrants or Registrable
Securities.


 


“Prospectus” shall mean the prospectus
included in any Registration Statement, 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 by all
other amendments and supplements to the prospectus, including post effective
amendments and all material incorporated by reference in such prospectus.


 


“Register,” “registered” and “registration”
refer to a registration made by preparing and filing a Registration Statement
or similar document in compliance with the 1933 Act (as defined below), and the
declaration or ordering of effectiveness of such Registration Statement or
document.


 


“Registrable Securities” shall mean (i) the
Shares, (ii) the Warrant Shares and (iii) any other securities issued
or issuable with respect to or in exchange for Registrable Securities;
provided, that, a security shall cease to be a Registrable Security upon (A) sale
pursuant to a Registration Statement or Rule 144 under the 1933 Act, or (B) such
security becoming eligible for sale by the Investors pursuant to Rule 144(k).


 


“Registration Statement” shall mean
any registration statement of the Company filed under the 1933 Act that covers
the resale of any of the Registrable Securities pursuant to the provisions of
this Agreement, amendments and supplements to such Registration Statement,
including post-effective amendments, all exhibits and all material incorporated
by reference in such Registration Statement.


 


“Required Investors” means the
Investors holding a majority of the Registrable Securities.


 


“SEC” means the U.S. Securities and
Exchange Commission.


 

















 


“Shares” means the shares of Common
Stock issued pursuant to the Purchase Agreement.


 


“1933 Act” means the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.


 


“1934 Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.


 


“Warrants” means, the warrants to
purchase shares of Common Stock issued to the Investors pursuant to the
Purchase Agreement, the form of which is attached to the Purchase
Agreement as Exhibit A.


 


“Warrant Shares” means the shares of
Common Stock issuable upon the exercise of the Warrants.


 


2.               Registration.


 


(a)                                  Registration
Statements.


 


(i)                                     Promptly
following the closing of the purchase and sale of the securities contemplated
by the Purchase Agreement (the “Closing Date”) but no later than thirty (30)
days after the Closing Date (the “Filing Deadline”), the Company shall prepare
and file with the SEC one Registration Statement on Form S-3 (or, if Form S-3
is not then available to the Company, on such form of registration
statement as is then available to effect a registration for resale of the
Registrable Securities, subject to the Required Investors’ consent), covering
the resale of the Registrable Securities in an amount at least equal to the
Shares and the Warrant Shares. Such Registration Statement shall include the
plan of distribution attached hereto as Exhibit A. Such
Registration Statement also shall cover, to the extent allowable under the 1933
Act and the rules promulgated thereunder (including Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock
splits, stock dividends or similar transactions with respect to the Registrable
Securities. Such Registration Statement shall not include any shares of Common
Stock or other securities for the account of any other holder without the prior
written consent of the Required Investors. The Registration Statement (and each
amendment or supplement thereto, and each request for acceleration of
effectiveness thereof) shall be provided in accordance with Section 3(c) to
the Investors and their counsel prior to its filing or other submission. If a
Registration Statement covering the Registrable Securities is not filed with
the SEC on or prior to the Filing Deadline, the Company will make pro rata
payments to each Investor, as liquidated damages and not as a penalty, in an
amount equal to 1.5% of the aggregate amount invested by such Investor for each
30-day period or pro rata for any portion thereof following the Filing Deadline
for which no Registration Statement is filed with respect to the Registrable
Securities. Such payments shall constitute the Investors’ exclusive monetary
remedy for such events, but shall not affect the right of the Investors to seek
injunctive relief. Such payments shall be made to each Investor in cash.


 


(ii)                                  Additional
Registrable Securities. Upon the written demand of any Investor and upon any
change in the Warrant Price (as defined in the Warrant) such that additional
shares of Common Stock become issuable upon the exercise of the Warrants, the
Company shall prepare and file with the SEC one or more Registration Statements
on Form S-3 or amend the Registration Statement filed pursuant to clause (i) above,
if such Registration Statement has not previously been declared effective (or,
if Form S-3 is not then available to the 


 


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Company, on such form of registration
statement as is then available to effect a registration for resale of such
additional shares of Common Stock (the “Additional Shares”), subject to the
Required Investors’ consent) covering the resale of the Additional Shares, but
only to the extent the Additional Shares are not at the time covered by an
effective Registration Statement. Such Registration Statement also shall cover,
to the extent allowable under the 1933 Act and the rules promulgated
thereunder (including Rule 416), such indeterminate number of additional
shares of Common Stock resulting from stock splits, stock dividends or similar
transactions with respect to the Additional Shares. Such Registration Statement
shall not include any shares of Common Stock or other securities for the
account of any other holder without the prior written consent of the Required
Investors. The Registration Statement (and each amendment or supplement
thereto, and each request for acceleration of effectiveness thereof) shall be
provided in accordance with Section 3(c) to the Investors and their
counsel prior to its filing or other submission. If a Registration Statement
covering the Additional Shares is required to be filed under this Section 2(a)(ii) and
is not filed with the SEC within ten (10) Business Days of the request of
any Investor or upon the occurrence of any of the events specified in this Section 2(a)(ii),
the Company will make pro rata payments to each Investor, as liquidated damages
and not as a penalty, in an amount equal to 1.5% of the aggregate amount
invested by such Investor for each 30-day period or pro rata for any portion
thereof following the date by which such Registration Statement should have
been filed for which no Registration Statement is filed with respect to the
Additional Shares. Such payments shall constitute the Investors’ exclusive
monetary remedy for such events, but shall not affect the right of the
Investors to seek injunctive relief. Such payments shall be made to each
Investor in cash.


 


(b)                                 Expenses.
The Company will pay all expenses associated with each registration, including
filing and printing fees, the Company’s counsel and accounting fees and
expenses, costs associated with clearing the Registrable Securities for sale
under applicable state securities laws, listing fees, reasonable out-of-pocket
fees and expenses of one counsel to the Investors (which fees and expenses
shall not exceed $35,000 in the aggregate) and the Investors’ reasonable out-of-pocket
expenses in connection with the registration, but excluding discounts,
commissions, fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals with respect to the Registrable Securities
being sold.


 


(c)                                  Effectiveness.


 


(i)                                     The
Company shall use commercially reasonable efforts to have the Registration
Statement declared effective as soon as practicable. The Company shall notify
the Investors by facsimile or e-mail as promptly as practicable, and in any
event, within twenty-four (24) hours, after any Registration Statement is
declared effective and shall simultaneously provide the Investors with copies
of any related Prospectus to be used in connection with the sale or other
disposition of the securities covered thereby. If (A)(x) a Registration
Statement covering the Registrable Securities is not declared effective by the
SEC prior to the earlier of (i) five (5) Business Days after the SEC
shall have informed the Company that no review of the Registration Statement
will be made or that the SEC has no further comments on the Registration
Statement or (ii) the 90th day after the Closing Date (the 120th
day if the SEC reviews the Registration Statement), or (y) a Registration
Statement covering Additional Shares is not declared effective by the SEC
within ninety (90) days following the time such Registration Statement was
required to be filed pursuant to Section 2(a)(ii) (120 days 


 


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if the SEC reviews the Registration
Statement), or (B) after a Registration Statement has been declared
effective by the SEC, sales cannot be made pursuant to such Registration
Statement for any reason (including without limitation by reason of a stop
order, or the Company’s failure to update the Registration Statement), but
excluding the inability of any Investor to sell the Registrable Securities
covered thereby due to market conditions and except as excused pursuant to
subparagraph (ii) below, then the
Company will make pro rata payments to each Investor, as liquidated damages and
not as a penalty, in an amount equal to 1.5% of the aggregate amount invested
by such Investor for each 30- day period or pro rata for any portion thereof
following the date by which such Registration Statement should have been
effective (the “Blackout Period”). Such payments shall constitute the Investors’
exclusive monetary remedy for such events, but shall not affect the right of
the Investors to seek injunctive relief. The amounts payable as liquidated
damages pursuant to this paragraph shall be paid monthly within three (3) Business
Days of the last day of each month following the commencement of the Blackout
Period until the termination of the Blackout Period. Such payments shall be
made to each Investor in cash.


 


(ii)                                  For
not more than twenty (20) consecutive days or for a total of not more than
forty-five (45) days in any twelve (12) month period, the Company may delay
the disclosure of material non-public information concerning the Company, by
suspending the use of any Prospectus included in any registration contemplated
by this Section containing such information, the disclosure of which at
the time is not, in the good faith opinion of the Company, in the best
interests of the Company (an “Allowed Delay”); provided, that the Company shall
promptly (a) notify the Investors in writing of the existence of (but in
no event, without the prior written consent of an Investor, shall the Company
disclose to such Investor any of the facts or circumstances regarding) material
non-public information giving rise to an Allowed Delay, (b) advise the
Investors in writing to cease all sales under the Registration Statement until
the end of the Allowed Delay and (c) use commercially reasonable efforts
to terminate an Allowed Delay as promptly as practicable.


 


3.               Company Obligations.
The Company will use commercially reasonable efforts to effect the registration
of the Registrable Securities in accordance with the terms hereof, and pursuant
thereto the Company will, as expeditiously as possible:


 


(a)                                use
commercially reasonable efforts to cause such Registration Statement to become
effective and to remain continuously effective for a period that will terminate
upon the earlier of (i) the date on which all Registrable Securities
covered by such Registration Statement as amended from time to time, have been
sold, and (ii) the date on which all Registrable Securities covered by
such Registration Statement may be sold pursuant to Rule 144(k) (the “Effectiveness
Period”) and advise the Investors in writing when the Effectiveness Period has
expired;


 


(b)                               prepare
and file with the SEC such amendments and post-effective amendments to the
Registration Statement and the Prospectus as may be necessary to keep the
Registration Statement effective for the Effectiveness Period and to comply
with the provisions of the 1933 Act and the 1934 Act with respect to the
distribution of all of the Registrable Securities covered thereby;


 


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(c)                                provide
copies to and permit counsel designated by the Investors to review each
Registration Statement and all amendments and supplements thereto no fewer than
seven (7) days prior to their filing with the SEC and not file any
document to which such counsel reasonably objects;


 


(d)                               furnish
to the Investors and their legal counsel (i) promptly after the same is
prepared and publicly distributed, filed with the SEC, or received by the
Company (but not later than two (2) Business Days after the filing date,
receipt date or sending date, as the case may be) one (1) copy of any
Registration Statement and any amendment thereto, each preliminary prospectus
and Prospectus and each amendment or supplement thereto, and each letter
written by or on behalf of the Company to the SEC or the staff of the SEC, and
each item of correspondence from the SEC or the staff of the SEC, in each case
relating to such Registration Statement (other than any portion of any thereof
which contains information for which the Company has sought confidential
treatment), and (ii) such number of copies of a Prospectus, including a
preliminary prospectus, and all amendments and supplements thereto and such
other documents as each Investor may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Investor
that are covered by the related Registration Statement;


 


(e)                                use
commercially reasonable efforts to (i) prevent the issuance of any stop
order or other suspension of effectiveness and, (ii) if such order is
issued, obtain the withdrawal of any such order at the earliest possible
moment;


 


(f)                                  prior
to any public offering of Registrable Securities, use commercially reasonable
efforts to register or qualify or cooperate with the Investors and their
counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions requested by the Investors and do any and all other
commercially reasonable acts or things necessary or advisable to enable the
distribution in such jurisdictions of the Registrable Securities covered by the
Registration Statement; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (i) qualify
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(f), (ii) subject itself to general
taxation in any jurisdiction where it would not otherwise be so subject but for
this Section 3(f), or (iii) file a general consent to service of
process in any such jurisdiction;


 


(g)                               use
commercially reasonable efforts to cause all Registrable Securities covered by
a Registration Statement to be listed on each securities exchange, interdealer
quotation system or other market on which similar securities issued by the
Company are then listed;


 


(h)                               promptly
notify the Investors, at any time when a Prospectus relating to Registrable
Securities is required to be delivered under the 1933 Act (including during any
period when the Company is in compliance with Rule 172), upon discovery
that, or upon the happening of any event as a result of which, the Prospectus
included in a Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and at the request of any such
holder,


 


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promptly prepare, file with the SEC pursuant
to Rule 172 and furnish to such holder a supplement to or an amendment of
such Prospectus as may be necessary so that such Prospectus shall not
include 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 not
misleading in light of the circumstances then existing; and


 


(i)                                   otherwise
use commercially reasonable efforts to comply with all applicable rules and
regulations of the SEC under the 1933 Act and the 1934 Act, including Rule 172,
notify the Investors promptly if the Company no longer satisfies the conditions
of Rule 172 and take such other actions as may be reasonably
necessary to facilitate the registration of the Registrable Securities
hereunder; and make available to its security holders, as soon as reasonably
practicable, but not later than the Availability Date (as defined below), an
earnings statement covering a period of at least twelve (12) months, beginning
after the effective date of each Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the 1933
Act, including Rule 158 promulgated thereunder (for the purpose of this
subsection 3(i), “Availability Date” means the 45th day following the end
of the fourth fiscal quarter that includes the effective date of such
Registration Statement, except that, if such fourth fiscal quarter is the last
quarter of the Company’s fiscal year, “Availability Date” means the 90th day
after the end of such fourth fiscal quarter).


 


(j)                                     With
a view to making available to the Investors the benefits of Rule 144 (or
its successor rule) and any other rule or regulation of the SEC that may at
any time permit the Investors to sell shares of Common Stock to the public
without registration, the Company covenants and agrees to:  (i) make and keep public information
available, as those terms are understood and defined in Rule 144, until
the earlier of (A) six months after such date as all of the Registrable
Securities may be resold pursuant to Rule 144(k) or any other rule of
similar effect or (B) such date as all of the Registrable Securities shall
have been resold; (ii) file with the SEC in a timely manner all reports
and other documents required of the Company under the 1934 Act; and (iii) furnish
to each Investor upon request, as long as such Investor owns any Registrable
Securities, (A) a written statement by the Company that it has complied
with the reporting requirements of the 1934 Act, (B) a copy of the Company’s
most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q,
and (C) such other information as may be reasonably requested in
order to avail such Investor of any rule or regulation of the SEC that
permits the selling of any such Registrable Securities without registration.


 


4.               Due Diligence
Review; Information. Upon reasonable prior notice, the Company shall make
available, during normal business hours, for inspection and review by the
Investors, advisors to and representatives of the Investors (who may or may not
be affiliated with the Investors and who are reasonably acceptable to the
Company), all financial and other records, all SEC Filings (as defined in the
Purchase Agreement) and other filings with the SEC, and all other corporate
documents and properties of the Company as may be reasonably necessary for
the purpose of such review, and cause the Company’s officers, directors and
employees, within a reasonable time period, to supply all such information
reasonably requested by the Investors or any such representative, advisor or
underwriter in connection with such Registration Statement (including, without
limitation, in response to all questions and other inquiries reasonably made or
submitted by any of them), prior to and from time to time after the filing and
effectiveness of the Registration Statement for the sole purpose of enabling
the Investors and such representatives, 


 


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advisors and underwriters and their respective accountants and
attorneys to conduct initial and ongoing due diligence with respect to the
Company and the accuracy of such Registration Statement.


 


The Company shall not disclose material
nonpublic information to the Investors, or to advisors to or representatives of
the Investors, unless prior to disclosure of such information the Company
identifies such information as being material nonpublic information and
provides the Investors, such advisors and representatives with the opportunity
to accept or refuse to accept such material nonpublic information for review
and any Investor wishing to obtain such information enters into an appropriate
confidentiality agreement with the Company with respect thereto.


 


5.               Obligations of
the Investors.


 


(a)                                Each
Investor shall promptly furnish in writing to the Company such information
regarding itself, the Registrable Securities held by it and the intended method
of disposition of the Registrable Securities held by it, as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may reasonably
request. At least five (5) Business Days prior to the first anticipated
filing date of any Registration Statement, the Company shall notify each
Investor of the information the Company requires from such Investor if such
Investor elects to have any of the Registrable Securities included in the
Registration Statement. An Investor shall provide such information to the
Company at least two (2) Business Days prior to the first anticipated
filing date of such Registration Statement if such Investor elects to have any
of the Registrable Securities included in the Registration Statement.


 


(b)                               Each
Investor, by its acceptance of the Registrable Securities agrees to cooperate with
the Company as reasonably requested by the Company in connection with the
preparation and filing of a Registration Statement hereunder, unless such
Investor has notified the Company in writing of its election to exclude all of
its Registrable Securities from such Registration Statement.


 


(c)                                Each
Investor agrees that, upon receipt of any notice from the Company of either (i) the
commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the
happening of an event pursuant to Section 3(h) hereof, such Investor
will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities, until the
Investor is advised by the Company that a supplemented or amended prospectus
has been filed with the SEC and until any related post-effective amendment is
declared effective and, if so directed by the Company, the Investor shall
deliver to the Company or destroy (and deliver to the Company a certificate of
destruction) all copies in the Investor’s possession of the Prospectus covering
the Registrable Securities current at the time of receipt of such notice.


 


6.               Indemnification.


 


(a)                                Indemnification
by the Company. The Company will indemnify and hold harmless each Investor
and its officers, directors, members, employees and agents, successors and
assigns, and each other person, if any, who controls such Investor within the


 


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meaning of the 1933 Act, against any losses,
claims, damages or liabilities, joint or several, to which they may become
subject under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereof; (ii) any blue sky application or other document
executed by the Company specifically for that purpose or based upon written
information furnished by the Company filed in any state or other jurisdiction
in order to qualify any or all of the Registrable Securities under the
securities laws thereof (any such application, document or information herein
called a “Blue Sky Application”); (iii) 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; (iv) any violation by the Company or
its agents of any rule or regulation promulgated under the 1933 Act
applicable to the Company or its agents and relating to action or inaction
required of the Company in connection with such registration; or (v) any
failure to register or qualify the Registrable Securities included in any such
Registration in any state where the Company or its agents has affirmatively
undertaken or agreed in writing that the Company will undertake such
registration or qualification on an Investor’s behalf and will reimburse such
Investor, and each such officer, director or member and each such controlling
person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not
be liable in any such case if and to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by such Investor or any such controlling person in
writing specifically for use in such Registration Statement or Prospectus.


 


(b)                               Indemnification
by the Investors. Each Investor agrees, severally but not jointly, to
indemnify and hold harmless, to the fullest extent permitted by law, the
Company, its directors, officers, employees, stockholders and each person who
controls the Company (within the meaning of the 1933 Act) against any losses,
claims, damages, liabilities and expense (including reasonable attorney fees)
resulting from any untrue statement of a material fact or any omission of a
material fact required to be stated in the Registration Statement or Prospectus
or preliminary prospectus or amendment or supplement thereto or necessary to
make the statements therein not misleading, to the extent, but only to the
extent that such untrue statement or omission is contained in any information
furnished in writing by such Investor to the Company specifically for inclusion
in such Registration Statement or Prospectus or amendment or supplement thereto.
In no event shall the liability of an Investor be greater in amount than the
dollar amount of the proceeds (net of all expense paid by such Investor in
connection with any claim relating to this Section 6 and the amount of any
damages such Investor has otherwise been required to pay by reason of such
untrue statement or omission) received by such Investor upon the sale of the
Registrable Securities included in the Registration Statement giving rise to
such indemnification obligation.


 


(c)                                Conduct
of Indemnification Proceedings. Any person entitled to indemnification
hereunder shall (i) give prompt notice to the indemnifying party of any
claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any person entitled
to indemnification hereunder shall have the right to employ


 


8

















 


separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at
the expense of such person unless (a) the indemnifying party has agreed to
pay such fees or expenses, or (b) the indemnifying party shall have failed
to assume the defense of such claim and employ counsel reasonably satisfactory
to such person or (c) in the reasonable judgment of any such person, based
upon written advice of its counsel, a conflict of interest exists between such
person and the indemnifying party with respect to such claims (in which case,
if the person notifies the indemnifying party in writing that such person
elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such person); and provided, further, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations hereunder, except to the
extent that such failure to give notice shall materially adversely affect the
indemnifying party in the defense of any such claim or litigation. It is
understood that the indemnifying party shall not, in connection with any
proceeding in the same jurisdiction, be liable for fees or expenses of more
than one separate firm of attorneys at any time for all such indemnified
parties. No indemnifying party will, except with the consent of the indemnified
party, consent to entry of any judgment or enter into any settlement that does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
of such claim or litigation.


 


(d)                               Contribution.
If for any reason the indemnification provided for in the preceding paragraphs (a) and
(b) is unavailable to an indemnified party or insufficient to hold it
harmless, other than as expressly specified therein, then the indemnifying
party shall contribute to the amount paid or payable by the indemnified party
as a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations. No
person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of
the 1933 Act shall be entitled to contribution from any person not guilty of
such fraudulent misrepresentation. In no event shall the contribution
obligation of a holder of Registrable Securities be greater in amount than the
dollar amount of the proceeds (net of all expenses paid by such holder in
connection with any claim relating to this Section 6 and the amount of any
damages such holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission) received by it
upon the sale of the Registrable Securities giving rise to such contribution
obligation.


 


7.               Miscellaneous.


 


(a)                                Amendments
and Waivers. This Agreement may be amended, modified or waived only by
a writing signed by the Company and the Required Investors; provided
that if any such amendment, modification or waiver would adversely affect in
any material respect any Investor or group of Investors who have comparable
rights under this Agreement disproportionately to the other Investors having
such comparable rights, such amendment, modification, or waiver shall also
require the written consent of the Investor(s) so adversely affected. Notwithstanding
the foregoing, no amendment or modification of this Agreement that would
restrict or otherwise limit any Investor’s registration rights hereunder shall
be effective against such Investor without its written consent.


 


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(b)                               Notices.
All notices and other communications provided for or permitted hereunder shall
be made as set forth in Section 9.4 of the Purchase Agreement.


 


(c)                                Assignments
and Transfers by Investors. The provisions of this Agreement shall be
binding upon and inure to the benefit of the Investors and their respective
successors and assigns. An Investor may transfer or assign, in whole or
from time to time in part, to one or more persons its rights hereunder in connection
with the transfer of Registrable Securities by such Investor to such person,
provided that (i) such Investor complies with all laws applicable thereto
and provides written notice of assignment to the Company promptly after such
assignment is effected and (ii) the transferee agrees in writing to be
bound by this Agreement as if it were a party hereto.


 


(d)                               Assignments
and Transfers by the Company. This Agreement may not be assigned by
the Company (whether by operation of law or otherwise) without the prior
written consent of the Required Investors, provided, however, that the Company may assign
its rights and delegate its duties hereunder to any surviving or successor
corporation in connection with a merger or consolidation of the Company with
another corporation, or a sale, transfer or other disposition of all or
substantially all of the Company’s assets to another corporation, without the
prior written consent of the Required Investors, after notice duly given by the
Company to each Investor.


 


(e)                                Benefits
of the Agreement. The terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective permitted successors and
assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.


 


(f)                                  Counterparts;
Faxes. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. This Agreement may also be
executed via facsimile, which shall be deemed an original.


 


(g)                               Titles
and Subtitles. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting
this Agreement.


 


(h)                               Severability.
Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof but shall be interpreted as if it were written so as to be
enforceable to the maximum extent permitted by applicable law, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law
which renders any provisions hereof prohibited or unenforceable in any respect.


 


10

















 


(i)                                   Further
Assurances. The parties shall execute and deliver all such further
instruments and documents and take all such other actions as may reasonably
be required to carry out the transactions contemplated hereby and to evidence
the fulfillment of the agreements herein contained.


 


(j)                                   Entire
Agreement. This Agreement is intended by the parties as a final expression
of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.


 


(k)                                Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State
of New York without regard to the choice of law principles thereof. Each of the
parties hereto irrevocably submits to the exclusive jurisdiction of the courts
of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each
party hereto anywhere in the world by the same methods as are specified for the
giving of notices under this Agreement. Each of the parties hereto irrevocably
consents to the jurisdiction of any such court in any such suit, action or
proceeding and to the laying of venue in such court. Each party hereto
irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. EACH OF THE PARTIES HERETO
WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO
THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS
TO THIS WAIVER.


 


11

















 


SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT


 


IN WITNESS WHEREOF, the parties have executed
this Agreement or caused their duly authorized officers to execute this
Agreement as of the date first above written.


 


	
  The Company:

  	
  TAPESTRY
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Kai P.
  Larson

  	
   

  
	
   

  	
  Name:

  	
  Kai P.
  Larson

  
	
   

  	
  Title:

  	
  Vice
  President, General Counsel and Secretary

  
					



 

















 


SIGNATURE
PAGES TO 
REGISTRATION RIGHTS
AGREEMENT


 


	
   

  	
  BAKER BROS. INVESTMENTS II, L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Baker Bros. Capital, L.P., its general partner 

  	
   

  
	
   

  	
  By:

  	
  Baker Bros. Capital (GP), LLC, its general partner 

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Julian Baker

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Julian Baker 

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BAKER BIOTECH FUND II (Z), L.P.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Baker Biotech Capital II (Z), L.P., its general partner 

  
	
   

  	
  By:

  	
  Baker Biotech Capital II (Z) (GP), LLC, its general

  partner 

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Julian Baker

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Julian Baker 

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BAKER BIOTECH FUND III, L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Baker Biotech Capital III, L.P., its general partner 

  
	
   

  	
  By:

  	
  Baker Biotech Capital III (GP), LLC, its general

  partner 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Julian Baker

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Julian Baker 

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BAKER BIOTECH FUND III (Z), L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Baker Biotech Capital III (Z), L.P., its general partner 

  
	
   

  	
  By:

  	
  Baker Biotech Capital III (Z) (GP), LLC, its general 

  partner 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Julian Baker

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Julian Baker 

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  



 

















 


	
   

  	
  14159 L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  14159 Capital, L.P., its general partner

  	
   

  
	
   

  	
  By:

  	
  14159 Capital (GP), LLC, its general partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Julian Baker

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Julian Baker

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  



 

















 


SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT


 


	
   

  	
  BIOTECHNOLOGY VALUE FUND, L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  BVF Partners, L.P., its general partner

  	
   

  
	
   

  	
  By:

  	
  BVF Inc., its general partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  	
   

  



 


 


	
   

  	
  BIOTECHNOLOGY VALUE FUND II, L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  BVF Partners, L.P., its general partner

  	
   

  
	
   

  	
  By:

  	
  BVF Inc., its general partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  	
   

  



 


 


	
   

  	
  BVF INVESTMENTS, L.L.C.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  BVF Partners, L.P., its manager

  	
   

  
	
   

  	
  By:

  	
  BVF Inc., its general partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  	
   

  



 


 


	
   

  	
  INVESTMENT 10, L.L.C.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  BVF Partners, L.P., its attorney-in-fact

  	
   

  
	
   

  	
  By:

  	
  BVF Inc., its general partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark N. Lampert

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  	
   

  



 

















 


SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT


 


	
   

  	
  FORT MASON MASTER, LP

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  Fort Mason Capital, LLC, its General

  	
   

  
	
   

  	
   

  	
  Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Den Gorman

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Den Gorman

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  



 


 


	
   

  	
  FORT MASON PARTNERS, LP

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  Fort Mason Capital, LLC, its General

  	
   

  
	
   

  	
   

  	
  Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Den Gorman

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Den Gorman

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  



 

















 


SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT


 


	
   

  	
  CAPITAL VENTURES INTERNATIONAL

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  Heights Capital Management, Inc., its

  authorized agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Martin Kobinger

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Martin Kobinger

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Investment Manager

  	
   

  



 

















 


SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT


 


	
   

  	
  MERLIN BIOMED LONG TERM

  APPRECIATION, LP

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Norman Schleifer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Norman Schleifer

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  



 


 


	
   

  	
  MERLIN BIOMED OFFSHORE MASTER

  FUND

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Norman Schleifer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Norman Schleifer

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  



 

















 


SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT


 


	
   

  	
  SPECIAL SITUATIONS FUND III Q.P. L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David Greenhouse

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  



 


 


	
   

  	
  SPECIAL SITUATIONS LIFE SCIENCE FUND

  L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David Greenhouse

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  



 


 


	
   

  	
  SPECIAL SITUATIONS PRIVATE EQUITY

  FUND L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David Greenhouse

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  



 


 


	
   

  	
  SPECIAL SITUATIONS FUND III L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David Greenhouse

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  



 


 


	
   

  	
  SPECIAL SITUATIONS CAYMAN FUND L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David Greenhouse

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  



 

















 


SIGNATURE
PAGES TO 
REGISTRATION RIGHTS
AGREEMENT


 


	
   

  	
  IRA FBO CHUNG W. KONG DB SECURITIES

  INC. CUSTODIAN ROTH CONVERSION

  ACCOUNT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chung W. Kong

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Chung W. Kong

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Beneficiary

  	
   

  



 


 


	
   

  	
  IRA FBO CHANG L. KONG DB SECURITIES

  INC. CUSTODIAN ROTH CONVERSION

  ACCOUNT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chang L. Kong

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Chang L. Kong

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Beneficiary

  	
   

  



 


 


	
   

  	
  TANG CAPITAL PARTNERS, LP

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  



 


 


	
   

  	
  KEVIN C. TANG AS CUSTODIAN FOR JUSTIN

  LEE TANG UNDER THE CA TRANSFER TO

  MINORS ACT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Trustee

  	
   

  



 


	
   

  	
  KEVIN TANG AND HAEYOUNG TANG

  TRUSTEES THE TANG FAMILY TRUST

  DATED 8-27-02

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Trustee

  	
   

  



 

















 


	
   

  	
  KEVIN C. TANG AS CUSTODIAN FOR

  JULIAN KONG TANG UNDER THE CA

  TRANSFER TO MINORS ACT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Trustee

  	
   

  



 


 


	
   

  	
  KEVIN C. TANG AS CUSTODIAN FOR NOA

  YOUNG TANG UNDER THE CA TRANSFER

  TO MINORS ACT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Trustee

  	
   

  



 


 


	
   

  	
  IRA FBO KEVIN TANG DB SECURITIES INC.

  CUSTODIAN ROLLOVER ACCOUNT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin C. Tang

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Beneficiary

  	
   

  



 

















 


SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT


 


	
   

  	
  VERSANT CAPITAL MANAGEMENT LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Herriot Tabuteau

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Herriot Tabuteau

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  	
   

  



 

















 


SIGNATURE
PAGE TO 
REGISTRATION RIGHTS
AGREEMENT


 


	
   

  	
  XMARK JV INVESTMENT PARTNERS, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Mitchell D. Kaye

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitchell D. Kaye

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Investment Officer

  	
   

  



 


 


	
   

  	
  XMARK OPPORTUNITY FUND, LTD.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Mitchell D. Kaye

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitchell D. Kaye

  	
   

  
	
   

  	
   

  	
  Title:

  	
  CIO

  	
   

  



 


 


	
   

  	
  XMARK OPPORTUNITY FUND, L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Mitchell D. Kaye

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mitchell D. Kaye

  	
   

  
	
   

  	
   

  	
  Title:

  	
  CIO

  	
   

  



 

















 


Exhibit A


 


Plan
of Distribution


 


The selling
stockholders, which as used herein includes donees, pledgees, transferees or
other successors-in-interest selling shares of common stock or interests in
shares of common stock received after the date of this prospectus from a
selling stockholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise dispose of any or
all of their shares of common stock or interests in shares of common stock on
any stock exchange, market or trading facility on which the shares are traded
or in private transactions. These dispositions may be at fixed prices, at
prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale, or
at negotiated prices.


 


The selling
stockholders may use any one or more of the following methods when
disposing of shares or interests therein:


 


• ordinary brokerage transactions and
transactions in which the broker-dealer solicits purchasers;


 


• block trades in which the broker-dealer
will attempt to sell the shares as agent, but may position and resell a
portion of the block as principal to facilitate the transaction;


 


• purchases by a broker-dealer as
principal and resale by the broker-dealer for its account;


 


• an exchange distribution in accordance
with the rules of the applicable exchange;


 


• privately negotiated transactions;


 


• short sales effected after the date
the registration statement of which this Prospectus is a part is declared
effective by the SEC;


 


• through the writing or settlement of
options or other hedging transactions, whether through an options exchange or
otherwise;


 


• broker-dealers may agree with the
selling stockholders to sell a specified number of such shares at a stipulated
price per share; and


 


• a combination of any such methods of
sale.


 


The selling
stockholders may, from time to time, pledge or grant a security interest in
some or all of the shares of common stock owned by them and, if they default in
the performance of their secured obligations, the pledgees or secured parties may offer
and sell the shares of common stock, from time to time, under this prospectus,
or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as


 

















 


selling stockholders under this
prospectus. The selling stockholders also may transfer the shares of
common stock in other circumstances, in which case the transferees, pledgees or
other successors in interest will be the selling beneficial owners for purposes
of this prospectus.


 


In connection
with the sale of our common stock or interests therein, the selling
stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of
the common stock in the course of hedging the positions they assume. The
selling stockholders may also sell shares of our common stock short and
deliver these securities to close out their short positions, or loan or pledge
the common stock to broker-dealers that in turn may sell these securities.
The selling stockholders may also enter into option or other transactions
with broker-dealers or other financial institutions or the creation of one or
more derivative securities which require the delivery to such broker-dealer or
other financial institution of shares offered by this prospectus, which shares
such broker-dealer or other financial institution may resell pursuant to
this prospectus (as supplemented or amended to reflect such transaction).


 


The aggregate proceeds to
the selling stockholders from the sale of the common stock offered by them will
be the purchase price of the common stock less discounts or commissions, if any.
Each of the selling stockholders reserves the right to accept and, together
with their agents from time to time, to reject, in whole or in part, any
proposed purchase of common stock to be made directly or through agents. We
will not receive any of the proceeds from this offering. Upon any exercise of
the warrants by payment of cash, however, we will receive the exercise price of
the warrants.


 


The selling
stockholders also may resell all or a portion of the shares in open market
transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided that they meet the criteria and conform to the requirements of
that rule.


 


The
selling stockholders and any underwriters, broker-dealers or agents that
participate in the sale of the common stock or interests therein may be “underwriters”
within the meaning of Section 2(11) of the Securities Act. Any discounts,
commissions, concessions or profit they earn on any resale of the shares may be
underwriting discounts and commissions under the Securities Act. Selling
stockholders who are “underwriters” within the meaning of Section 2(11) of
the Securities Act will be subject to the prospectus delivery requirements of
the Securities Act.


 


To the extent
required, the shares of our common stock to be sold, the names of the selling
stockholders, the respective purchase prices and public offering prices, the
names of any agents, dealer or underwriter, any applicable commissions or
discounts with respect to a particular offer will be set forth in an
accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.


 


In order to comply with the
securities laws of some states, if applicable, the common stock may be
sold in these jurisdictions only through registered or licensed brokers or
dealers. In addition, in some states the common stock may not be sold
unless it has been registered or qualified for sale or an exemption from
registration or qualification requirements is available and is complied with.


 

















 


We have advised the selling
stockholders that the anti-manipulation rules of Regulation M under the
Exchange Act may apply to sales of shares in the market and to the
activities of the selling stockholders and their affiliates. In addition, we
will make copies of this prospectus (as it may be supplemented or amended
from time to time) available to the selling stockholders for the purpose of
satisfying the prospectus delivery requirements of the Securities Act. The
selling stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.


 


We have agreed to indemnify
the selling stockholders against liabilities, including liabilities under the
Securities Act and state securities laws, relating to the registration of the
shares offered by this prospectus.


 


We have agreed with the
selling stockholders to keep the registration statement of which this
prospectus constitutes a part effective until the earlier of (1) such
time as all of the shares covered by this prospectus have been disposed of
pursuant to and in accordance with the registration statement or (2) the
date on which the shares may be sold pursuant to Rule 144(k) of the
Securities Act.