Exhibit 10.1


 


ALTERNATIVE
WARRANTS

REGISTRATION RIGHTS AGREEMENT


 


This Alternative Warrants
Registration Rights Agreement (the “Agreement”) is made and entered into as of
this 3rd day of March, 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.


 


“Alternative Warrants”
has the meaning given to such term in the Purchase Agreement.


 


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


 


“Business Day” means
a day, other than a Saturday or Sunday, on which banks in New York City, New
York 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
Alternative 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 Alternative 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.


 


“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.


 


2.     Registration.


 


(a)           Registration Statements.


 


(i)            Promptly
following the date on which the Alternative Warrants become exercisable in
accordance with their terms (the “Effective Date”) but no later than thirty
(30) days after the Effective 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 Alternative 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
amount that is equal to (A) the aggregate number of Alternative Warrant Shares
(i.e., 522,815), multiplied by (B) an assumed price per Warrant Share of $2.00,
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 Alternative Warrants) such that additional shares of Common
Stock become issuable upon the exercise of the Alternative 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 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 amount that is equal to (A) the aggregate number of
Alternative Warrant Shares (i.e., 522,815), multiplied by (B) an assumed price
per Warrant Share of $2.00, 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 Effective
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 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
amount that is equal to (A) the aggregate number of Alternative Warrant Shares
(i.e., 522,815), multiplied by (B) an assumed price per Warrant Share of $2.00,
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;


 


(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, 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, 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 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 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.


 


(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.


 


(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.


 

















 


SIGNATURE PAGE TO 

ALTERNATIVE
WARRANTS

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/ Leonard Shaykin

  	
   

  
	
   

  	
  Name:

  	
  Leonard Shaykin

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
					



 

















 


	
   

  	
  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

  
						



 

















 


	
   

  	
  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

  
					



 

















 


	
   

  	
  FORT MASON MASTER, LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Fort Mason Capital, LLC, its Managing

  Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dan Gorman

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Dan Gorman

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FORT MASON PARTNERS, LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Fort Mason Capital, LLC, its Managing

  Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dan Gorman

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Dan Gorman

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  
					



 

















 


	
   

  	
  CAPITAL VENTURES INTERNATIONAL

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Heights Capital Management, Inc., its

  authorized agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Martin Kobinger

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Martin Kobinger

  
	
   

  	
   

  	
  Title:

  	
  Investment Manager

  
					



 

















 


	
   

  	
  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

  
					



 

















 


	
   

  	
  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 L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David Greenhouse

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SPECIAL SITUATIONS CAYMAN FUND L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Greenhouse

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David Greenhouse

  
	
   

  	
   

  	
  Title:

  	
   

  
					



 

















 


	
   

  	
  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/ Chung W. Kong

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Chung W. 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

  
					



 

















 


	
   

  	
  VERSANT CAPITAL MANAGEMENT LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Herriot Tabuteau

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Herriot Tabuteau

  
	
   

  	
   

  	
  Title:

  	
  Managing Member

  
					



 

















 


	
   

  	
  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.