EXHIBIT 10.12
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REGISTRATION RIGHTS AGREEMENT
among
CARE MANAGEMENT SCIENCE CORPORATION
X. X. XXXXXXX III, L.P.,
WHITNEY STRATEGIC PARTNERS III, L.P.,
FOUNDATION HEALTH SYSTEMS, INC.,
XXXXX X. XXXXXXX,
XXXXXX X. XXXXXX,
XXXXX XXXXXX,
ZEKE INVESTMENT PARTNERS,
and
XXXXXXX XXXXXXXXXXXX
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Dated as of December 23, 1998
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TABLE OF CONTENTS
Page
1. Definitions.............................................................1
2. Securities Subject to this Agreement....................................4
(a) Registrable Securities.........................................4
(b) Holders of Registrable Securities..............................4
3. Demand Registration.....................................................5
(a) Request for Demand Registration................................5
(b) Effective Demand Registration..................................5
(c) Expenses.......................................................6
(d) Underwriting Procedures........................................6
(e) Selection of Underwriters......................................6
4. Piggy-Back Registration.................................................7
(a) Piggy-Back Rights..............................................8
(b) Priority of Registrations......................................8
(c) Expenses.......................................................8
5. Holdback Agreements.....................................................9
(a) Restrictions on Public Sale by Holders.........................9
(b) Restrictions on Public Sale by the Company.....................9
6. Registration Procedures.................................................9
(a) Obligations of the Company.....................................9
(b) Seller Information............................................12
(c) Notice to Discontinue.........................................12
(d) Sale to Underwriter...........................................13
7. Registration Expenses..................................................13
8. Indemnification; Contribution..........................................14
(a) Indemnification by the Company................................14
(b) Indemnification by Holders....................................14
(c) Conduct of Indemnification Proceedings........................14
(d) Contribution..................................................15
9. Rule 144; Other Exemptions.............................................16
TABLE OF CONTENTS
(continued)
Page
10. Certain Limitations on Registration Rights.............................16
11. Miscellaneous..........................................................16
(a) Recapitalizations, Exchanges, etc.............................16
(b) No Inconsistent Agreements; Other Registration Rights.........16
(c) Remedies......................................................17
(d) Amendments and Waivers........................................17
(e) Notices.......................................................17
(f) Successors and Assigns........................................18
(g) Counterparts..................................................18
(h) Headings......................................................18
(i) Governing Law.................................................18
(j) Jurisdiction..................................................19
(k) Severability..................................................19
(l) Rules of Construction.........................................19
(m) Entire Agreement..............................................19
(n) Further Assurances............................................19
-ii-
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT"), dated as
of December 23, 1998, among CARE MANAGEMENT SCIENCE CORPORATION, a Pennsylvania
corporation (the "COMPANY"), X. X. XXXXXXX III, L.P., a Delaware limited
partnership ("JHW"), WHITNEY STRATEGIC PARTNERS III, L.P., a Delaware limited
partnership ("WSP", together with JHW, collectively referred to herein as
"WHITNEY") FOUNDATION HEALTH SYSTEMS, INC., a Delaware corporation ("FHS"),
XXXXX X. XXXXXXX, XXXXXX X. XXXXXX (Xxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxx
collectively referred to as the "MANAGEMENT STOCKHOLDERS"), XXXXX XXXXXX,
XXXXXXX XXXXXXXXXXXX and XXXX INVESTMENT PARTNERS, a Pennsylvania partnership
(Xxxxx Xxxxxx, Xxxxxxx Xxxxxxxxxxxx and Xxxx Investment Partners collectively
referred to as the "INDIVIDUAL INVESTORS").
This Agreement is made in connection with (i) the Stock
Purchase Agreement (the "PURCHASE AGREEMENT"), dated as of the date hereof,
among the Company, Whitney and the Individual Investors relating to the
acquisition by Whitney and the Individual Investors of an aggregate of 2,366,947
shares of Series C Convertible Preferred Stock, no par value, of the Company
(the "SERIES C CONVERTIBLE PREFERRED") for an aggregate purchase price of
$6,175,000.00 and (ii) the Exchange Agreement, dated as of the date hereof,
between FHS and the Company, pursuant to which FHS has agreed to restructure its
existing investment in the Company in return for 994,000 shares of Series D
Convertible Preferred Stock, no par value, of the Company (the "SERIES D
CONVERTIBLE PREFERRED"), 1,658,004 shares of Series E Convertible Preferred
Stock, no par value, of the Company (the "SERIES E CONVERTIBLE PREFERRED") and
1,560,000 shares of Series G Redeemable Preferred Stock, no par value, of the
Company (the "SERIES G REDEEMABLE PREFERRED").
The Company, FHS and the Management Stockholders are parties
to a Registration Rights Agreement, dated September 8, 1995, as amended on
September 6, 1996 (the "1995 AGREEMENT"). In order to induce Whitney to enter
into the Purchase Agreement, (i) the Company, FHS and the Management
Stockholders have agreed, among other things, to terminate the 1995 Agreement
and (ii) the Company has agreed to provide registration rights with respect to
the Registrable Securities (as hereinafter defined) as set forth in this
Agreement.
The parties hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"1995 AGREEMENT" has the meaning assigned such term in the
third paragraph of this Agreement.
"ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"APPROVED UNDERWRITER" has the meaning assigned such term
in Section 3(e).
"APPROVED UNDERWRITER AMOUNT" has the meaning assigned such
term in Section 3(d).
"BUSINESS DAY" means any day other than a Saturday, Sunday
or other day on which commercial banks in the City of New York are authorized or
required by law or executive order to close.
"COMMON STOCK" means the Common Stock, no par value, of the
Company, or any other capital stock of the Company into which such stock is
reclassified or reconstituted.
"COMPANY UNDERWRITER" has the meaning assigned such term in
Section 4(a).
"DEMAND REGISTRATION" has the meaning assigned such term in
Section 3(a).
"DESIGNATED HOLDER" means Whitney, FHS, the Management
Stockholders, the Individual Investors and any of their respective transferees
to whom Registrable Securities have been transferred other than the transferee
to whom such securities have been transferred pursuant to a registration
statement under the Act or Rule 144 under the Act; provided, that, for purposes
of Section 3(a) hereof, the transferees of any Designated Holder shall only be
entitled to exercise that Designated Holder's Demand Registration (if not
already exercised by such Designated Holder) as a group.
"EXCHANGE ACT" means the Securities and Exchange Act of
1934, as amended, and the rules and regulations of the SEC thereunder.
"HOLDER" has the meaning assigned such term in Section
2(b).
"HOLDERS' COUNSEL" means (a) with respect to any Demand
Registration that has been requested pursuant to Section 3, the one counsel
selected by the Initiating Holder in such registration and (b) with respect to a
request for registration of Registrable Securities pursuant to Section 4, the
one counsel selected by the Holders holding a majority of the Registrable
Securities held by all Holders being registered in such registration.
"INDEMNIFIED PARTY" has the meaning assigned such term in
Section 8(c).
"INDEMNIFYING PARTY" has the meaning assigned such term in
Section 8(c).
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"INITIAL PUBLIC OFFERING" shall mean the sale in an
underwritten offering by the Company of its capital stock pursuant to a
registration statement on Form S-1 or otherwise under the Act.
"INITIATING HOLDER" has the meaning assigned to such term
in Section 3(a).
"INSPECTOR" has the meaning assigned such term in Section
6(a)(viii).
"NASD" has the meaning assigned such term in Section
6(a)(xv).
"PERSON" means any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity of any kind, and shall include any successor (by merger or
otherwise) of any such entity.
"PURCHASE AGREEMENT" has the meaning assigned such term in
the second paragraph of this Agreement.
"REGISTRABLE SECURITIES" means, subject to Section 2(a),
each of the following: (a) any shares of Common Stock issued or issuable upon
conversion or in exchange for shares of the Series C Convertible Preferred,
Series D Convertible Preferred or Series E Convertible Preferred; (b) any shares
of Common Stock held by the Management Stockholders or any of their respective
permitted transferees; and (c) any shares of Common Stock issued or issuable in
respect of shares of Common Stock issued, issuable or held pursuant to clause
(a) or (b) above by way of a stock dividend or stock split or in connection with
a combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise.
"REGISTRATION EXPENSES" has the meaning assigned such term
in Section 7.
"RULE 144" means Rule 144 under the Act (or any similar
rule adopted after the date hereof).
"SEC" means the Securities and Exchange Commission.
"SERIES C CONVERTIBLE PREFERRED" has the meaning assigned
such term in the second paragraph of this Agreement and is further defined to
include any other capital stock of the Company into which such stock is
reclassified or reconstituted.
"SERIES D CONVERTIBLE PREFERRED" means the Series D
Convertible Preferred Stock, no par value, of the Company (or any warrants to
purchase such stock), or any other capital stock of the Company into which such
stock is reclassified or reconstituted.
"SERIES E CONVERTIBLE PREFERRED" means the Series E
Convertible Preferred Stock, no par value, of the Company (or any warrants to
purchase such stock), or any other capital stock of the Company into which such
stock is reclassified or reconstituted.
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"SERIES F REDEEMABLE PREFERRED" means the Series F
Redeemable Preferred Stock, no par value, of the Company (or any warrants to
purchase such stock), or any other capital stock of the Company into which such
stock is reclassified or reconstituted.
"SERIES G REDEEMABLE PREFERRED" means the Series G
Redeemable Preferred, no par value, of the Company.
"SERIES PREFERRED" means, collectively, the Series C
Convertible Preferred, Series D Convertible Preferred, Series E Convertible
Preferred, Series F Redeemable Preferred and Series G Redeemable Preferred.
"SHARES" means the Common Stock, the Series Preferred, any
class of common stock of the Company authorized after the date of this Agreement
and any other class of stock resulting from successive changes or
reclassifications of the Shares.
"SHAREHOLDERS' AGREEMENT" means the Shareholders'
Agreement, dated the date hereof, among the Company, Whitney, FHS, the
Management Stockholders and the Individual Investors.
"TOTAL SECURITIES" has the meaning assigned such term in
Section 4(a).
"UNDERWRITERS" has the meaning assigned such term in
Section 6(d).
"VALID BUSINESS REASON" has the meaning assigned such term
in Section 3(f).
"WHITNEY DIRECTOR" means a person appointed by Whitney to
the Board of Directors of the Company pursuant to the Shareholders' Agreement.
2. SECURITIES SUBJECT TO THIS AGREEMENT.
(a) REGISTRABLE SECURITIES. For the purposes of this
Agreement, Registrable Securities will cease to be Registrable Securities when
(i) a registration statement covering such Registrable Securities has been
declared effective under the Act by the SEC and such Registrable Securities have
been disposed of pursuant to such effective registration statement or (ii) the
entire amount of Registrable Securities proposed to be sold in a single sale are
or, in the opinion of counsel satisfactory to the Company and the Holder, each
in their reasonable judgment, may, be distributed to the public pursuant to Rule
144 in compliance with the requirements of paragraphs (c), (e), (f) and (g) of
Rule 144 (notwithstanding the provisions of paragraph (k) of such Rule) (or any
successor provision then in effect) under the Act.
(b) HOLDERS OF REGISTRABLE SECURITIES. A Person is deemed
to be a holder of Registrable Securities (a "HOLDER") whenever such Person (i)
is a party to this Agreement (or a permitted transferee of such party that has
become a party hereto) and (ii) owns of record Registrable Securities, or holds
a security convertible into or exercisable or exchangeable for, Registrable
Securities, whether or not such purchase or conversion has actually been
effected and disregarding any legal restrictions upon the exercise of such
rights. If
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the Company receives conflicting instructions, notices or elections from two or
more persons with respect to the same Registrable Securities, the Company may
act upon the basis of the instructions, notice or election received from the
registered owner of such Registrable Securities. Registrable Securities issuable
upon conversion of another security shall be deemed outstanding for the purposes
of this Agreement.
3. DEMAND REGISTRATION.
(a) REQUEST FOR DEMAND REGISTRATION. Subject to Section
3(f) below, at any time after 6 months from the date of the consummation of an
Initial Public Offering, each of the Designated Holders (other than the
Individual Investors who, for purposes of this Section 3, shall be deemed to be
part of any Demand Registration in which Whitney is the Initiating Holder) (each
an "INITIATING HOLDER") shall have the right to make one request in writing that
the Company register Registrable Securities under the Act, and under the
securities or blue sky laws of any jurisdiction designated by such holder or
holders (each such registration under this Section 3(a) that satisfies the
requirements set forth in Section 3(b) is referred to herein as a "DEMAND
REGISTRATION"); PROVIDED, HOWEVER, that the Management Stockholders shall only
be entitled to one demand right as a group. Notwithstanding the foregoing, in no
event shall the Company be required to effect more than three Demand
Registrations. Each request for a Demand Registration by an Initiating Holder in
respect thereof shall specify the amount of the Registrable Securities proposed
to be sold, the intended method of disposition thereof and the jurisdictions in
which registration is desired. Upon a request for a Demand Registration, the
Company shall promptly take such steps as are necessary or appropriate to
prepare for the registration of the Registrable Securities to be registered.
Within fifteen (15) days after the receipt of such request, the Company shall
give written notice thereof to all other Designated Holders and include in such
registration all Registrable Securities held by a Designated Holder from whom
the Company has received a written request for inclusion therein at least ten
(10) days prior to the filing of the registration statement. Each such request
will also specify the number of Registrable Securities to be registered, the
intended method of disposition thereof and the jurisdictions in which
registration is desired. Subject to Section 3(d), the Company shall be entitled
to include in any registration statement and offering made pursuant to a Demand
Registration, authorized but unissued shares of Common Stock, shares of Common
Stock held by the Company as treasury shares or shares of Common Stock held by
stockholders other than the Designated Holders; PROVIDED, that such inclusion
shall be permitted only to the extent that it is pursuant to and subject to the
terms of the underwriting agreement or arrangements, if any, entered into by the
Initiating Holder exercising the Demand Registration rights.
(b) EFFECTIVE DEMAND REGISTRATION. The Company shall use
its best efforts to cause any Demand Registration to become effective not later
than ninety (90) days after it receives a request under Section 3(a). A
registration requested pursuant to Section 3(a) hereof shall not count as the
demand to which the Designated Holders are entitled thereunder unless such
registration statement is declared effective and remains effective for at least
the lesser of (i) such time as all Registrable Securities covered by such
registration statement have been disposed of in accordance with such
registration statement or (ii) ninety (90) days.
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(c) EXPENSES. In any registration initiated as a Demand
Registration, the Company shall pay all Registration Expenses in connection
therewith, whether or not such requested Demand Registration becomes effective.
(d) UNDERWRITING PROCEDURES. If the Initiating Holder to
which the requested Demand Registration relates so elects, the offering of such
Registrable Securities pursuant to such requested Demand Registration shall be
in the form of a firm commitment underwritten offering and the managing
underwriter or underwriters selected for such offering shall be the Approved
Underwriter selected in accordance with Section 3(e). In such event, if the
Approved Underwriter advises the Company in writing that, in its opinion, the
aggregate amount of such Registrable Securities requested to be included in such
offering (including those securities requested by the Company to be included in
such registration) is sufficiently large to have an adverse effect on the
success of such offering, then the Company shall include in such registration
only the aggregate amount of Registrable Securities that in the opinion of the
Approved Underwriter may be sold without any such effect on the success of such
offering (the "APPROVED UNDERWRITER AMOUNT"), and (i) all Registrable Securities
that the Initiating Holder proposes to register (including, in the case of
Whitney, Registrable Securities held by the Individual Investors) shall be
included in the registration up to the Approved Underwriter Amount, (ii) to the
extent that the number of Registrable Securities to be included by the
Initiating Holder is less than the Approved Underwriter Amount, securities
proposed to be registered by the Designated Holders (other than the Initiating
Holder) shall be included ratably in the registration based on the amounts of
Registrable Securities sought to be registered by such Designated Holders in
their request for participation in the Demand Registration and (iii) to the
extent that the number of Registrable Securities to be included under clauses
(i) and (ii) above is less than the Approved Underwriter Amount, securities that
the Company proposes to register shall also be included in the registration.
If, as a result of the proration provision of this Section
3(d), any Designated Holder shall not be entitled to include all Registrable
Securities in a registration that such Designated Holder has requested to be
included in, such Designated Holder may elect to withdraw his request to include
Registrable Securities in such registration or may reduce the number requested
to be included; PROVIDED, HOWEVER, that (x) such request must be made in writing
prior to the earlier of the execution of the underwriting agreement or the
execution of the custody agreement with respect to such registration and (y)
such withdrawal or reduction shall be irrevocable.
(e) SELECTION OF UNDERWRITERS. If any requested Demand
Registration is in the form of an underwritten offering, the Initiating Holder
shall select and obtain an investment banking firm of national reputation to act
as the managing underwriter of the offering (the "APPROVED UNDERWRITER");
PROVIDED that such underwriter shall be reasonably satisfactory to a majority of
the Designated Holders (other than the Initiating Holders) and the Company.
(f) LIMITATIONS ON DEMAND REGISTRATIONS. The Demand
Registration rights granted to the Designated Holders in Section 3(a) are
subject to the following limitations: (i) each registration in respect of a
Demand Registration must include Registrable Securities having an aggregate
market value of at least [$5,000,000], which market value shall be determined by
multiplying the number of Registrable Securities to be included in the Demand
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Registration by the proposed per share offering price; PROVIDED that the
limitation set forth in this clause (i) shall not be in effect at any time the
Designated Holders' Registrable Securities are not able to be sold under Rule
144 under the Act because of the Company's failure to comply with the
information requirements thereunder, unless at such time, the Company's outside
counsel (which shall be reasonably acceptable to the Designated Holders
requesting such registration) delivers a written opinion of counsel to such
Designated Holders to the effect that such Designated Holders' Registrable
Securities may be publicly offered and sold without registration under the Act;
(ii) the Company shall not be required to cause a registration pursuant to
Section 3(a) to be declared effective within a period of 150 days after the
effective date of any registration statement of the Company effected in
connection with a Demand Registration; and (iii) if the Board of Directors of
the Company, in its good faith judgment, determines that any registration of
Registrable Securities should not be made or continued because it would
materially interfere with any material financing, acquisition, corporate
reorganization or merger or other transaction involving the Company or any of
its subsidiaries (a "VALID BUSINESS REASON"), the Company may (x) postpone
filing a registration statement relating to a Demand Registration until such
Valid Business Reason no longer exists, but in no event for more than ninety
(90) days, and (y) in case a registration statement has been filed relating to a
Demand Registration, if the Valid Business Reason has not resulted from actions
taken by the Company, the Company, upon the approval of a majority of the
Company's Board of Directors, may cause such registration statement to be
withdrawn and its effectiveness terminated or may postpone amending or
supplementing such registration statement. The Company shall give written notice
of its determination to postpone or withdraw a registration statement under
Section 3(f)(iii) and of the fact that the Valid Business Reason for such
postponement or withdrawal no longer exists, in each case, promptly after the
occurrence thereof. Notwithstanding anything to the contrary contained herein,
the Company may not postpone or withdraw a filing under Section 3(f)(iii) hereof
more than once in any twelve-month period.
Each Holder of Registrable Securities agrees that, upon
receipt of any notice from the Company that the Company has determined to
withdraw any registration statement pursuant to clause (iii) above, such Holder
will discontinue its disposition of Registrable Securities pursuant to such
registration statement and, if so directed by the Company, will deliver to the
Company (at the Company's expenses) all copies, other than permanent file
copies, then in such Holder's possession, of the prospectus covering such
Registrable Securities that was in effect at the time of receipt of such notice.
If the Company shall give any notice of postponement or withdrawal of a
registration statement, the Company shall, at such time as the Valid Business
Reason that caused such postponement or withdrawal no longer exists (but in no
event later than ninety (90) days after the date of the postponement), use its
best efforts to promptly effect the registration under the Act of the
Registrable Securities covered by the postponed or withdrawn registration
statement in accordance with this Section 3 (unless the Designated Holder(s)
delivering the Demand Registration request shall have withdrawn such request, in
which case the Company shall not be considered to have effected an effective
registration for the purposes of this Agreement), and such registration shall
not be postponed or withdrawn pursuant to clause (iii) above.
4. PIGGY-BACK REGISTRATION.
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(a) PIGGY-BACK RIGHTS. If the Company proposes to file a
registration statement under the Act with respect to an offering by the Company
for its own account of any class of security (other than a registration
statement on Form S-4 or S-8 (or any successor form thereto)) under the Act,
then the Company shall give written notice of such proposed filing to each of
the Holders at least twenty (20) days before the anticipated filing date, and
such notice shall describe in detail the proposed registration and distribution
(including those jurisdictions where registration under the securities or blue
sky laws is intended) and offer such Holders the opportunity to register the
number of Registrable Securities as each such Holder may request. The Company
shall use its best efforts (within ten (10) days of the notice provided for in
the preceding sentence) to permit the Holders who have requested to participate
in the registration for such offering to include such Registrable Securities in
such offering on the same terms and conditions as the securities of the Company
included therein. Notwithstanding the foregoing, if such registration involves
an underwritten offering and the managing underwriters or underwriters (the
"COMPANY UNDERWRITER") shall advise the Holders of Registrable Securities in
writing that, in its opinion, the total amount of securities requested to be
included in such offering (the "TOTAL SECURITIES") is sufficiently large so as
to have an adverse effect on the success of the distribution of the Total
Securities, then the Company shall include in such registration, to the extent
of the number of securities which the Company is so advised can be sold in (or
during the time of) such offering, FIRST, all securities that the Company
proposes to register, and, SECOND the securities proposed to be included in such
registration by all Holders pro rata among them, and, THIRD, all other
securities proposed to be registered. Notwithstanding anything in this Section 4
to the contrary, the Company shall not be required to include any Registrable
Securities in its Initial Public Offering.
(b) PRIORITY OF REGISTRATIONS. Subject to the provisions of
Section 3(f)(iii), if the Company proposes to register securities pursuant to
Section 4(a) hereof on the same day that the Designated Holders request a
registration pursuant to Section 3(a) hereof, then the Demand Registration
requested pursuant to Section 3(a) hereof shall be given priority.
(c) EXPENSES. The Company shall bear all Registration
Expenses in connection with any registration pursuant to this Section 4.
(d) CONDITIONS AND LIMITATIONS ON PIGGYBACK REGISTRATIONS.
If, at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
not to register or to delay registration of such securities, the Company may, at
its election, give written notice of such determination to all Holders of record
of Registrable Securities and (i) in the case of a determination not to
register, shall be relieved of its obligation to register the Registrable
Securities in connection with such abandoned registration, without prejudice,
however, to the rights of Holders under Section 3, and (ii) in the case of a
determination to delay the registration of its securities, shall be permitted to
delay the registration of such Registrable Securities for the same period as the
delay in registering such other equity securities.
Any Holder shall have the right to withdraw its request for
inclusion of its Registrable Securities in any registration statement pursuant
to this Section 4 by giving the written notice to the Company of its request to
withdraw; PROVIDED, HOWEVER, that (i) such
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request must be made in writing prior to the earlier of the execution of the
underwriting agreement or the execution of the custody agreement with respect to
such registration and (ii) such withdrawal shall be irrevocable and, after
making such withdrawal, a Holder shall no longer have any right to include
Registrable Securities in the registration as to which such withdrawal was made.
5. HOLDBACK AGREEMENTS.
(a) RESTRICTIONS ON PUBLIC SALE BY HOLDERS. To the extent
not inconsistent with applicable law, each Holder agrees not to effect any
public sale or distribution of any Registrable Securities being registered or of
any securities convertible into or exchangeable or exercisable for such
Registrable Securities, including a sale pursuant to Rule 144 under the Act,
during the seven (7) days prior to or the ninety (90) day period beginning on
the effective date of such Demand Registration or Piggy-Back Registration or
other underwritten offering (except as part of such registration), if and to the
extent requested by any other Holder, in the case of a non-underwritten public
offering, or if and to the extent requested by the Company Underwriter, in the
case of an underwritten public offering. To the extent not inconsistent with
applicable law, each Holder also agrees that, during the period of duration (not
to exceed 180 days) specified by the Company and an underwriter of Common Stock
in connection with an Initial Public Offering, following the effective date of a
registration statement of the Company filed under the Act relating to such
Initial Public Offering, it shall not, to the extent requested by the Company
and such underwriter, directly or indirectly sell, offer to sell, contract to
sell (including, without limitation, any short sale), grant any option to
purchase or otherwise transfer or dispose of (other than to donees who agree to
be similarly bound) any securities of the Company held by it at any time during
such period (except Registrable Securities included in such registration).
(b) RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The Company
agrees not to effect any public sale or distribution of any of its securities
for its own account (except pursuant to registrations on Form S-4 or S-8 (or any
successor form thereto) under the Act) during the ninety (90) day period
beginning on the effective date of any registration statement in which the
Holders are participating (except to the extent that such sale or distribution
is made pursuant to such registration).
6. REGISTRATION PROCEDURES.
(a) OBLIGATIONS OF THE COMPANY. Whenever registration of
Registrable Securities has been requested pursuant to Section 3 or 4 of this
Agreement, the Company shall use its best efforts to effect the registration and
sale of such Registrable Securities in accordance with the intended method of
distribution thereof as quickly as practicable, and in connection with any such
request, the Company shall, as expeditiously as possible:
(i) prepare and file with the SEC (in any event not
later than sixty (60) Business Days after receipt of a request to file a
registration statement with respect to Registrable Securities) a registration
statement on any form on which registration is requested for which the Company
then qualifies, which counsel for the Company and Holders' Counsel shall deem
appropriate and which shall be available for the sale of such Registrable
Securities in
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accordance with the intended method of distribution thereof, and use its best
efforts to cause such registration statement to become effective; PROVIDED,
HOWEVER, that before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company shall (A) provide Holders'
Counsel with an adequate and appropriate opportunity to participate in the
preparation of such registration statement and each prospectus included therein
(and each amendment or supplement thereto) to be filed with the SEC, which
documents shall be subject to the review of Holders' Counsel, and (B) notify
Holders' Counsel and each seller of Registrable Securities pursuant to such
registration statement of any stop order issued or threatened by the SEC and
take all reasonable action required to prevent the entry of such stop order or
to remove it if entered;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Act with respect to the disposition of all
Registrable Securities covered by such registration statement until the earlier
of (a) such time as all of such Registrable Securities and other securities have
been disposed of in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement and (b) 180 days after
the effective date of such registration statement, except with respect to any
such registration statement filed pursuant to Rule 415 (or any successor Rule)
under the Act if the Company is eligible to file a registration statement on
Form S-3, in which case such period shall be two (2) years;
(iii) as soon as reasonably possible, furnish to each
seller of Registrable Securities, prior to filing a registration statement,
copies of such registration statement as it is proposed to be filed, and
thereafter such number of copies of such registration statement, each amendment
and supplement thereto (in each case including all exhibits thereto), the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as each such seller may reasonably request
in order to facilitate the disposition of the Registrable Securities owned by
such seller;
(iv) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller of Registrable Securities may request, and to
continue such qualification in effect in each such jurisdiction for as long as
is permissible pursuant to the laws of such jurisdiction, or for as long as any
such seller requests or until all of such Registrable Securities are sold,
whichever is shortest, and do any and all other acts and things which may be
reasonably necessary or advisable to enable any such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller; PROVIDED, HOWEVER, that the Company shall not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 6(a)(iv), (B) subject itself to
taxation in any such jurisdiction or (C) consent to general service of process
in any such jurisdiction;
(v) use its best efforts to obtain all other approvals,
covenants, exemptions or authorizations from such governmental agencies or
authorities as may be necessary to enable the sellers of such Registrable
Securities to consummate the disposition of such Registrable Securities;
10
(vi) notify each seller of Registrable Securities at
any time when a prospectus relating thereto is required to be delivered under
the Act, upon discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement contains 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 under which they were made, and the Company shall
promptly prepare a supplement or amendment to such prospectus and furnish to
each such seller a reasonable number of copies of a supplement to or amendment
of such prospectus as may be necessary so that, after delivery to the purchasers
of such Registrable Securities, such prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made;
(vii) enter into and perform customary agreements
(including an underwriting agreement in customary form with the Approved
Underwriter or Company Underwriter, if any, selected as provided in Section 3 or
4; PROVIDED, that the underwriting agreement, if any, shall be reasonably
satisfactory in form and substance to the Company) and take such other actions
as are reasonably required in order to expedite or facilitate the disposition of
such Registrable Securities;
(viii) make available for inspection by any seller of
Registrable Securities, any managing underwriter participating in any
disposition pursuant to such registration statement, Holders' Counsel and any
attorney, accountant or other agent retained by any such seller or any managing
underwriter (each, an "INSPECTOR" and, collectively, the "INSPECTORS"), all
financial and other records, pertinent corporate documents and properties of the
Company and any subsidiaries thereof as may be in existence at such time
(collectively, the "RECORDS") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's and any
subsidiaries' officers, directors and employees, and the independent public
accountants of the Company, to supply all information reasonably requested by
any such Inspector in connection with such registration statement; PROVIDED,
that such Inspector agrees to keep all such information confidential.
(ix) obtain a "cold comfort" letter from the Company's
independent public accountants in customary form and covering such matters of
the type customarily covered by "cold comfort" letters, as Holders' Counsel or
the managing underwriter reasonably request;
(x) furnish, at the request of any seller of
Registrable Securities on the date such securities are delivered to the
underwriters for sale pursuant to such registration or, if such securities are
not being sold through underwriters, on the date the registration statement with
respect to such securities becomes effective, an opinion, dated such date, of
counsel representing the Company for the purposes of such registration,
addressed to the underwriters, if any, and to the seller making such request,
covering such legal matters with respect to the registration in respect of which
such opinion is being given as such seller may reasonably request and as are
customarily included in such opinions;
11
(xi) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable but no later than fifteen (15) months
after the effective date of the registration statement, an earnings statement
covering a period of twelve (12) months beginning after the effective date of
the registration statement, in a manner which satisfies the provisions of
Section 11(a) of the Act;
(xii) cause all such Registrable Securities to be
listed on each securities exchange on which similar securities issued by the
Company are then listed (if any) if the listing of such Registrable Securities
is then permitted under the rules of such exchange or, if no similar securities
are then so listed, cause all such Registrable Securities to be listed on an
exchange on which the Initiating Holders request that such Registrable
Securities be listed, subject to the satisfaction of the applicable listing
requirements of each such exchange;
(xiii) keep each seller of Registrable Securities
advised in writing as to the initiation and progress of any registration under
Section 3 or 4 hereunder;
(xiv) provide officers' certificates and other
customary closing documents;
(xv) cooperate with each seller of Registrable
Securities and each underwriter participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with the National Association of Securities Dealers,
Inc. (the "NASD"); and
(xvi) use its best efforts to take all other steps
necessary to effect the registration of the Registrable Securities contemplated
hereby.
(b) SELLER INFORMATION. The Company may require as a
condition precedent of the Company's obligations under this Section 6 that each
seller of Registrable Securities as to which any registration is being effected
furnish to the Company such information regarding such seller and the
distribution of such securities as the Company may from time to time reasonably
request in writing.
(c) NOTICE TO DISCONTINUE. Each Holder agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 6(a)(vi), such Holder shall forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such Holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 6(a)(vi) and,
if so directed by the Company, such Holder shall deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Securities
which is current at the time of receipt of such notice. If the Company shall
give any such notice, the Company shall extend the period during which such
registration statement shall be maintained effective pursuant to this Agreement
(including, without limitation, the period referred to in Section 6(a)(ii)) by
the number of days during the period from and including the date of the giving
of such notice pursuant to Section 6(a)(vi) to
12
and including the date when the Holder shall have received the copies of the
supplemented or amended prospectus contemplated by and meeting the requirements
of Section 6(a)(vi).
(d) SALE TO UNDERWRITER. Subject to the limitations on
inclusion of Registrable Securities in a registration under Sections 3(d) and
4(a), in lieu of converting any shares of Series C Convertible Preferred, Series
D Convertible Preferred or Series E Convertible Preferred into Registrable
Securities to be included in a registration under Section 3 or 4 prior to or
simultaneously with the filing or the effectiveness of any registration
statement filed pursuant thereto, the holder of such preferred stock may sell
such stock to the Approved Underwriter or the Company Underwriter, as the case
may be, and any other underwriters of the offering being registered
(collectively, the Approved Underwriter or Company Underwriter, as the case may
be, and such other underwriters, the "UNDERWRITERS") if the Underwriters consent
thereto and if the Underwriters undertake to convert such shares of Series C
Convertible Preferred, Series D Convertible Preferred or Series E Convertible
Preferred into Registrable Securities before making any distribution pursuant to
such registration statement and to include such Registrable Securities among the
Registrable Securities being offered pursuant to such registration statement.
Assuming timely delivery by the Holder of the Series C Convertible Preferred
certificates, Series D Convertible Preferred certificates or Series E
Convertible Preferred certificates to or for the account of the Underwriters,
the Company agrees to cause the relevant Registrable Securities to be issued so
as to permit the Underwriters to make and complete the distribution (including
the distribution of such Registrable Securities) contemplated by the
underwriting.
7. REGISTRATION EXPENSES. The Company shall pay all expenses
(other than underwriting discounts and commissions) arising from or incident to
the performance of, or compliance with, this Agreement, including, without
limitation, (a) SEC, stock exchange and NASD registration and filing fees, (b)
all fees and expenses incurred in complying with securities or blue sky laws
(including, without limitation, reasonable fees, charges and disbursements of
counsel in connection with blue sky qualifications of the Registrable
Securities), (c) all printing, messenger and delivery expenses, (d) the fees,
charges and disbursements of counsel to the Company and of its independent
public accountants and any other accounting and legal fees, charges and expenses
incurred by the Company (including, without limitation, any expenses arising
from any special audits incident to or required by any registration or
qualification) and (e) the reasonable fees, charges and expenses of any special
experts retained by the Company in connection with any requested Demand
Registration or Piggy-Back Registration pursuant to the terms of this Agreement,
regardless of whether the registration statement filed in connection with such
registration is declared effective. In connection with each registration
hereunder, the Company shall reimburse the Holders of Registrable Securities
being registered in such registration for the reasonable fees, charges and
disbursements of not more than one Holders' Counsel. All of the expenses
described in this Section 7 are referred to in this Agreement as "REGISTRATION
EXPENSES." Notwithstanding the foregoing provisions of this Section 7, in
connection with any registration hereunder, each Holder of Registrable
Securities being registered shall pay all underwriting discounts and commissions
and any capital gains, income or transfer taxes, if any, attributable to the
sale of such Registrable Securities, PRO RATA with respect to payments of
discounts and commissions in accordance with the number of shares sold in the
offering.
13
8. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of any
proposed registration of securities of the Company pursuant to Section 3 or
Section 4, the Company agrees to indemnify and hold harmless each Holder, its
directors, officers, partners, employees, advisors and agents, and each Person
who controls (within the meaning of the Act or the Exchange Act) such Holder, to
the extent permitted by law, from and against any and all losses, claims,
damages, expenses (including, without limitation, reasonable costs of
investigation and fees, disbursements and other charges of counsel) or other
liabilities resulting from or arising out of or based upon any untrue, or
alleged untrue, statement of a material fact contained in any registration
statement, prospectus or preliminary prospectus or notification or offering
circular (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as the
same are caused by or contained in any information furnished in writing to the
Company by or on behalf of such Holder expressly for use therein. The Company
shall also indemnify any Underwriters of the Registrable Securities, their
officers, directors and employees, and each Person who controls any such
Underwriter (within the meaning of the Act and the Exchange Act) to the same
extent as provided above with respect to the indemnification of the Holders of
Registrable Securities.
(b) INDEMNIFICATION BY HOLDERS. In connection with any
proposed registration in which a Holder is participating pursuant to Section 3
or 4 hereof, each such Holder shall furnish to the Company in writing such
information with respect to such Holder as the Company may reasonably request or
as may be required by law for use in connection with any registration statement
or prospectus to be used in connection with such registration and each Holder
agrees to indemnify and hold harmless the Company, any Underwriter retained by
the Company and their respective directors, officers, employees and each Person
who controls (within the meaning of the Act and the Exchange Act) the Company or
such Underwriter to the same extent as the foregoing indemnity from the Company
to the Holders (subject to the proviso to this sentence and applicable law), but
only with respect to any such information furnished in writing by or on behalf
of such Holder expressly for use therein; PROVIDED, HOWEVER, that the liability
of any Holder under this Section 8(b) shall be limited to the amount of the net
proceeds received by such Holder in the offering giving rise to such liability.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person
entitled to indemnification hereunder (the "INDEMNIFIED PARTY") agrees to give
prompt written notice to the indemnifying party (the "INDEMNIFYING PARTY") after
the receipt by the Indemnified Party of any written notice of the commencement
of any action, suit, proceeding or investigation or threat thereof made in
writing for which the Indemnified Party intends to claim indemnification or
contribution pursuant to this Agreement; PROVIDED, that the failure so to notify
the Indemnifying Party shall not relieve the Indemnifying Party of any liability
that it may have to the Indemnified Party hereunder. If notice of commencement
of any such action is given to the Indemnifying Party as above provided, the
Indemnifying Party shall be entitled to participate in and, to the extent it may
wish, jointly with any other Indemnifying Party similarly notified, to assume
the defense of such action at its own expense, with counsel chosen by it and
satisfactory to such
14
Indemnified Party. The Indemnified Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel (other than reasonable costs of investigation)
shall be paid by the Indemnified Party unless (i) the Indemnifying Party agrees
to pay the same, (ii) the Indemnifying Party fails to assume the defense of such
action with counsel satisfactory to the Indemnified Party in its reasonable
judgment, (iii) the named parties to any such action (including any impleaded
parties) have been advised by the Indemnifying Party's counsel that either (A)
representation of such Indemnified Party and the Indemnifying Party by the same
counsel would be inappropriate under applicable standards of professional
conduct or (B) there may be one or more legal defenses available to it which are
different from or additional to those available to the Indemnifying Party;
PROVIDED, HOWEVER, that the Indemnifying Party shall only have to pay the fees
and expenses of one firm of counsel for all Indemnified Parties in each
jurisdiction, except to the extent representation of all Indemnified Parties by
the same counsel is inappropriate under applicable standards of professional
conduct. In either of such cases the Indemnifying Party shall not have the right
to assume the defense of such action on behalf of such Indemnified Party. No
Indemnifying Party shall be liable for any settlement entered into without its
written consent, which consent shall not be unreasonably withheld. No
Indemnifying Party shall, without the written consent of the Indemnified Party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
Indemnified Party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of the Indemnified Party from all liability arising out of such action
or claim and (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any Indemnified Party. The
rights accorded to any Indemnified Party hereunder shall be in addition to any
rights that such Indemnified Party may have at common law, by separate agreement
or otherwise.
(d) CONTRIBUTION. If the indemnification provided for in
Section 8(a) from the Indemnifying Party is unavailable to an Indemnified Party
in respect of any losses, claims, damages, expenses or other liabilities
referred to therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages, expenses or other
liabilities in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party and Indemnified Party in connection with the actions
which resulted in such losses, claims, damages, expenses or other liabilities,
as well as any other relevant equitable considerations. The relative faults of
such Indemnifying Party and Indemnified Party shall be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, was made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the Indemnifying Party's and
Indemnified Party's relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or payable by a
party as a result of the losses, claims, damages, expenses or other liabilities
referred to above shall be deemed to include, subject to the limitations set
forth in Sections 8(a), 8(b) and 8(c), any legal or other fees, charges or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to
15
this Section 8(d) were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution pursuant to this Section 8(d).
9. RULE 144; OTHER EXEMPTIONS. If the Company shall have filed
a registration statement pursuant to the requirements of Section 12 of the
Exchange Act or a registration statement pursuant to the requirements of the Act
in respect of Common Stock or securities of the company convertible into or
exchangeable or exercisable for Common Stock, the Company covenants that it
shall file any reports required to be filed by it under the Exchange Act and the
rules and regulations adopted by the SEC thereunder, and that it shall take such
further action as each Holder may reasonably request (including, but not limited
to, providing any information necessary to comply with Rules 144 and 144A under
the Act), all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Act within the
limitation of the exemptions provided by (a) Rule 144 or Rule 144A under the
Act, as such rules may be amended from time to time, or (b) any other rules or
regulations now existing or hereafter adopted by the SEC. The Company shall,
upon the request of any Holder, deliver to such Holder a written statement as to
whether the Company has complied with such requirements.
10. CERTAIN LIMITATIONS ON REGISTRATION RIGHTS. In the case of
a registration under Section 4 if the Company has determined to enter into an
underwriting agreement in connection therewith, no person may participate in
such registration unless such person (a) agrees to sell such person's securities
on the basis provided therein and (b) completes and executes all questionnaires,
powers of attorney, indemnities, lock-up agreements, underwriting agreements and
other documents reasonably required under the terms of such underwriting
agreements.
11. MISCELLANEOUS.
(a) RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of
this Agreement shall apply, to the full extent set forth herein with respect to
the Shares, to any and all shares of capital stock of the Company or any
successor or assign of the Company (whether by merger, consolidation, sale of
assets or otherwise) which may be issued in respect of, in exchange for or in
substitution of, the Shares and shall be appropriately adjusted for any stock
dividends, splits, reverse splits, combinations, recapitalizations and the like
occurring after the date hereof.
(b) NO INCONSISTENT AGREEMENTS; OTHER REGISTRATION RIGHTS.
The Company shall not enter into any agreement with respect to its securities
that is inconsistent with or adversely affects the rights granted to the Holders
in this Agreement other than any lock-up agreement with the underwriters in
connection with an underwritten offering pursuant to which the Company agrees,
for a period not in excess of 180 days if such underwritten offering is an
Initial Public Offering or, for a period not in excess of 90 days if such
underwritten offering is not an Initial Public Offering, not to register for
sale, and not to sell or otherwise dispose of, Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock. The Company
shall not grant any other Person registration rights without the written
16
consent of the Designated Holders holding at least a majority of the Registrable
Securities held by all of the Designated Holders. If the Company shall at any
time hereafter provide to any holder of any securities of the Company rights
with respect to the registration of such securities and such rights are provided
on terms or conditions more favorable to such holder than the terms and
conditions applicable to the Designated Holders herein, the Company shall
provide (by way of amendment to this Agreement or otherwise) such more favorable
terms or conditions to the Designated Holders under this Agreement.
(c) REMEDIES. The Holders, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, shall be
entitled to specific performance of their rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Agreement
and hereby agrees to waive in any action for specific performance the defense
that a remedy at law would be adequate.
(d) AMENDMENTS AND WAIVERS. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions of such
section may not be given unless the Company has obtained the prior written
consent of (i) the Designated Holders holding at least a majority of the
Registrable Securities held by all of the Designated Holders and (ii) the
Holders holding at least a majority of the Registrable Securities.
(e) NOTICES. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier,
courier service or personal delivery:
(i) if to Whitney or the Individual Investors:
c/o X. X. Xxxxxxx & Co.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxx, M.D.
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
(ii) if to FHS:
Foundation Health Systems, Inc.
00000 Xxxxxx Xxxxxx, Xxxxx 0000
00
Xxxxxxxx Xxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
(iii) if to the Company:
Care Management Science Corporation
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
Xxxxxx, Xxxxx & Bockius
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
(iv) if to an Existing Shareholder, to its, his or her
address as it appears on the record books of the Company.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; five Business
Days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is acknowledged, if telecopied.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of the parties
hereto; PROVIDED, HOWEVER, that the registration rights and the other
obligations of the Company contained in this Agreement shall, with respect to
any Registrable Security, be automatically transferred from a Holder to any
subsequent holder of such Registrable Security (including any pledgee).
Notwithstanding any transfer of such rights, all of the obligations of the
Company hereunder shall survive any such transfer and shall continue to inure to
the benefit of all transferees.
(g) COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania,
without regard to the principles of conflicts of law of such State.
18
(j) JURISDICTION. Each party to this Agreement hereby
irrevocably agrees that any legal action or proceeding arising out of or
relating to this Agreement or any agreements or transactions contemplated hereby
may be brought in the courts of the State of New York or of the United States of
America for the Southern District of New York and hereby expressly submits to
the personal jurisdiction and venue of such courts for the purposes thereof and
expressly waives any claim of improper venue and any claim that such courts are
an inconvenient forum. Each party hereby irrevocably consents to the service of
process of any of the aforementioned courts in any such suit, action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the address set forth in Section 10(e), such service to
become effective 10 days after such mailing.
(k) SEVERABILITY. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, it being
intended that all of the rights and privileges of the Holders shall be
enforceable to the fullest extent permitted by law.
(l) RULES OF CONSTRUCTION. Unless the context otherwise
requires, "or" is not exclusive, and references to sections or subsections refer
to sections or subsections of this Agreement.
(m) 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. There are no restrictions,
promises, warranties or undertakings in respect of the subject matter contained
herein, other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
(n) FURTHER ASSURANCES. Each of the parties shall execute
such documents and perform such further acts as may be reasonably required or
desirable to carry out or to perform the provisions of this Agreement.
19
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed and delivered by their respective officers hereunto duly authorized on
the date first above written.
CARE MANAGEMENT SCIENCE CORPORATION
By /S/ XXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Executive Officer
X.X. XXXXXXX III, L.P.
By X.X. Xxxxxxx Equity Partners III, L.L.C.
Its General Partner
By /S/ XXXXXX X. X'XXXXX
------------------------------------------
Name: Xxxxxx X. X'Xxxxx
Managing Member
WHITNEY STRATEGIC PARTNERS III, L.P.
By X.X. Xxxxxxx Equity Partners III, L.L.C.
Its General Partner
By /S/ XXXXXX X. X'XXXXX
-----------------------------------------
Name: Xxxxxx X. X'Xxxxx
Managing Member
FOUNDATION HEALTH SYSTEMS, INC.
By /S/ XXXXXXX XXXXXX
-----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: V.P., Asst. Gen. Counsel & Asst. Secretary
20
ZEKE INVESTMENT PARTNERS
By /S/ XXXXXX X. XXXXXXX
-----------------------------------------
Name: Xx Xxxxxxx
Title: General Partner
/S/ XXXXX X. XXXXXXX
---------------------------------------------
Xxxxx X. Xxxxxxx
/S/ XXXXXX X. XXXXXX
---------------------------------------------
Xxxxxx X. Xxxxxx
/S/ XXXXX XXXXXX
---------------------------------------------
Xxxxx Xxxxxx
/S/ XXXXXXX XXXXXXXXXXXX
---------------------------------------------
Xxxxxxx Xxxxxxxxxxxx
21
