EXHIBIT 99.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made
and entered into as of July 15, 2003, by and among The Ultimate Software Group,
Inc., a Delaware corporation (the "Company"), and the investors signatory hereto
(each a "Purchaser" and collectively, the "Purchasers").
This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of the date hereof among the Company and the Purchasers (the
"Purchase Agreement").
The Company and the Purchasers hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings:
"Advice" shall have the meaning set forth in Section 6(d).
"Blackout Period" shall have the meaning set forth in Section
2(c).
"Effectiveness Date" means, with respect to the Registration
Statement required to be filed hereunder, the earlier of (a) the 90th
calendar day following the Closing Date (150th calendar day in the
event of a review by the Commission of the Registration Statement or
any document incorporated by reference in the Registration Statement)
and (b) the fifth Trading Day following the date on which the Company
is notified by the Commission that the Registration Statement will not
be reviewed or is no longer subject to further review and comments.
"Effectiveness Period" shall have the meaning set forth in
Section 2(a).
"Event" shall have the meaning set forth in Section 2(b).
"Event Date" shall have the meaning set forth in Section 2(b).
"Filing Date" means the 30th Trading Day following the Closing
Date.
"Holder" or "Holders" means the holder or holders, as the case
may be, from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in
Section 5(c).
"Indemnifying Party" shall have the meaning set forth in
Section 5(c).
"Losses" shall have the meaning set forth in Section 5(a).
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes
any information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by the Registration
Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.
"Registrable Securities" means the shares of Common Stock
issuable pursuant to the Purchase Agreement, together with any shares
of Common Stock issued or issuable upon any stock split, dividend or
other distribution, recapitalization or similar event with respect to
the foregoing.
"Registration Statement" means the registration statements
required to be filed hereunder, including (in each case) the
Prospectus, amendments and supplements to the registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be
incorporated by reference in the registration statement.
"Rule 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.
"Rule 424" means Rule 424 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended.
2. REGISTRATION.
(a) On or prior to the Filing Date, the Company shall prepare
and file with the Commission the Registration Statement covering the
resale of all of the Registrable Securities for an offering to be made
on a continuous basis pursuant to Rule 415. The Registration Statement
required hereunder shall be on Form S-3 (except if the Company is not
then eligible to register for resale the Registrable Securities on Form
S-3, in which
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case the Registration shall be on another appropriate form in
accordance herewith). The Registration Statement required hereunder
shall contain (except if otherwise directed in writing by the Holders
or if otherwise required by applicable law or by the Commission) the
"PLAN OF DISTRIBUTION" attached hereto as ANNEX A. The Company shall
use commercially reasonable efforts to cause the Registration Statement
to become effective and remain effective as provided herein. The
Company shall use its commercially reasonable efforts to cause the
Registration Statement to be declared effective under the Securities
Act as promptly as possible after the filing thereof, but in any event
not later than the Effectiveness Date, and shall use its commercially
reasonable efforts to keep the Registration Statement continuously
effective under the Securities Act until the date when all Registrable
Securities covered by the Registration Statement have been sold or may
be sold without volume restrictions pursuant to Rule 144(k) as
determined by the counsel to the Company pursuant to a written opinion
letter to such effect, addressed and reasonably acceptable to the
affected Holders (the "EFFECTIVENESS PERIOD").
(b) If during the Effectiveness Period: (i) a Registration
Statement is not filed on or prior to the Filing Date (if the Company
files a Registration Statement without affording the Holder the
reasonable opportunity to review and comment on the same as required by
Section 3(a), the Company shall not be deemed to have satisfied this
clause (i)), or (ii) the Company fails to file with the Commission a
request for acceleration in accordance with Rule 461 promulgated under
the Securities Act, within five Trading Days of the date that the
Company is notified (orally or in writing, whichever is earlier) by the
Commission that a Registration Statement will not be "reviewed," or not
subject to further review, or (iii) prior to the date when such
Registration Statement is first declared effective by the Commission,
the Company fails to file a pre-effective amendment and otherwise
respond in writing to comments made by the Commission in respect of
such Registration Statement within thirty Trading Days after the
receipt of comments by or notice from the Commission that such
amendment is required in order for a Registration Statement to be
declared effective, or (iv) a Registration Statement filed or required
to be filed hereunder is not declared effective by the Commission on or
before the Effectiveness Date, or (v) after a Registration Statement is
first declared effective by the Commission, it ceases for any reason to
remain continuously effective as to all Registrable Securities for
which it is required to be effective, or the Holders are not permitted
to utilize the Prospectus therein to resell such Registrable
Securities, including during the pendency of a Blackout Period, for in
any such cases twenty-five Trading Days (which need not be consecutive
days) in the aggregate during any 12-month period (any such failure or
breach being referred to as an "EVENT," and for purposes of clause (i)
or (iv) the date on which such Event occurs, or for purposes of clause
(ii) the date on which such five Trading Day period is exceeded, or for
purposes of clauses (iii) the date which such thirty Trading Day period
is exceeded, or for purposes of clause (v) the date on which such
twenty-five Trading Day period is exceeded being referred to as "EVENT
DATE"), then in addition to any other rights the Holders may have
hereunder or under applicable law: (x) on each such Event Date the
Company shall pay to each Holder an amount in cash, as liquidated
damages and not as a penalty, equal to 1% of the aggregate purchase
price paid by such Holder pursuant to the Purchase Agreement for any
Registrable Securities then held by such Holder; and (y) on each
monthly anniversary of each such Event Date (if the applicable Event
shall not have been cured by such date)
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until the applicable Event is cured, the Company shall pay to each
Holder an amount in cash, as liquidated damages and not as a penalty,
equal to 1% of the aggregate purchase price paid by such Holder
pursuant to the Purchase Agreement for any Registrable Securities then
held by such Holder (pro-rated for partial periods on a PER DIEM
basis). If the Company fails to pay any liquidated damages pursuant to
this Section in full within seven days after the date payable, the
Company will pay interest thereon at a rate of 10% per annum (or such
lesser maximum amount that is permitted to be paid by applicable law)
to the Holder, accruing daily from the date such liquidated damages are
payable until such amounts, plus all such interest thereon, are paid in
full.
(c) The Company shall have the right to suspend the
effectiveness of any Registration Statement during the pendency of any
"Blackout Period," as defined below. The Company shall notify the
Holders of the commencement of any Blackout Period, and during the
pendency of such Blackout Period no Holder shall sell, convey, dispose
of or otherwise transfer in any manner any Registrable Securities
pursuant to the Registration Statement. The Company acknowledges and
agrees that, following the end of the twenty-five day grace period set
forth in Section 2(b)(v), liquidated damages will accrue and be payable
to the Holders pursuant to Section 2(b) notwithstanding the pendency of
a Blackout Period until the Company notifies the Holders that the
Blackout Period has terminated. For purposes of this Agreement,
"BLACKOUT PERIOD" means any of the following:
(i) any period of time (not to exceed 120 days during
any twelve (12) consecutive months) after the Company has
determined to proceed with a Securities Act registration of
any of its securities and is diligently proceeding to complete
such registration, until 90 days following the consummation of
any offering contemplated by such registration;
(ii) any period of time (not to exceed 90 days during
any period of twelve (12) consecutive months) when the Company
is in possession of material, non-public information that the
Company would not be required to disclose publicly in the
absence of any Securities Act registration of its securities,
and the disclosure of which would be materially injurious to
the Company, or
(iii) any period of time (not to exceed 120 days
during any period of twelve (12) consecutive months) when the
Company is engaged in, or has determined to engage in and is
proceeding diligently with, any program for the purchase of,
or any tender offer or exchange offer for, any of its
securities, and determines, on advice of nationally recognized
independent U.S. counsel knowledgeable in such matters, that
such program or offer and the requested registration may not
proceed concurrently without violating Regulation M under the
Exchange Act.
3. REGISTRATION PROCEDURES
In connection with the Company's registration obligations
hereunder, the Company shall:
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(a) Not less than three Trading Days prior to the filing of
the Registration Statement or any related Prospectus or any amendment
or supplement thereto, the Company shall, (i) furnish to the Holders
copies of all such documents proposed to be filed (including documents
incorporated or deemed incorporated by reference to the extent
requested by such Person) which documents will be subject to the
reasonable review of such Holders, and (ii) cause its officers and
directors, counsel and independent certified public accountants to
respond to such inquiries as shall be necessary, in the reasonable
opinion of respective counsel to conduct a reasonable investigation
within the meaning of the Securities Act. The Company shall not file
the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the
Registrable Securities shall reasonably object in good faith.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement and
the Prospectus used in connection therewith as may be necessary to keep
the Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period; (ii) cause the
related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed
pursuant to Rule 424; (iii) respond as promptly as reasonably possible
to any comments received from the Commission with respect to the
Registration Statement or any amendment thereto and, as promptly as
reasonably possible, upon request, provide the Holders true and
complete copies of all correspondence from and to the Commission
relating to the Registration Statement; and (iv) comply in all material
respects with the provisions of the Securities Act and the Exchange Act
with respect to the disposition of all Registrable Securities covered
by the Registration Statement during the applicable period in
accordance with the intended methods of disposition by the Holders
thereof set forth in the Registration Statement as so amended or in
such Prospectus as so supplemented.
(c) Notify the Holders of Registrable Securities to be sold as
promptly as reasonably possible (and, in the case of (i)(A) below, not
less than two Trading Days prior to such filing) and (if requested by
any such Person) confirm such notice in writing promptly following the
day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to
be filed; (B) when the Commission notifies the Company whether there
will be a "review" of the Registration Statement and whenever the
Commission comments in writing on the Registration Statement (the
Company shall upon request provide true and complete copies thereof and
all written responses thereto to each of the Holders); and (C) with
respect to the Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the
Commission or any other Federal or state governmental authority during
the Effectiveness Period of the Registration Statement for amendments
or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission or any
other federal or state governmental authority of any stop order
suspending the effectiveness of the Registration Statement covering any
or all of the Registrable Securities or the initiation of any
Proceedings for that purpose known to the Company; (iv) of the receipt
by the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the
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initiation or threatening of any Proceeding for such purpose; and (v)
of the occurrence of any event or passage of time that makes the
financial statements included in the Registration Statement ineligible
for inclusion therein or any statement made in the Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or
that requires any revisions to the Registration Statement, Prospectus
or other documents so that, in the case of the Registration Statement
or the Prospectus, as the case may be, it will not contain any 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, in light of the circumstances under which they were made, not
misleading.
(d) Use its commercially reasonable efforts to avoid the
issuance of, or, if issued, obtain the withdrawal of (i) any order
suspending the effectiveness of the Registration Statement, or (ii) any
suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction, at the
earliest practicable moment.
(e) Furnish to each Holder, without charge, at least one
conformed copy of the Registration Statement and each amendment
thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference to the
extent requested by such Person, and all exhibits to the extent
requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents
with the Commission.
(f) Promptly deliver to each Holder, without charge, as many
copies of the Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons
may reasonably request in connection with resales by the Holder of
Registrable Securities. The Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto, except after the giving on any notice pursuant to
Section 3(c).
(g) Prior to any resale of Registrable Securities by a Holder,
use its commercially reasonable efforts to register or qualify or
cooperate with the selling Holders in connection with the registration
or qualification (or exemption from the Registration or qualification)
of such Registrable Securities for the resale by the Holder under the
securities or Blue Sky laws of such jurisdictions within the United
States as any Holder reasonably requests in writing, to keep each
registration or qualification (or exemption therefrom) effective during
the Effectiveness Period and to do any and all other acts or things
reasonably necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by the Registration Statement;
PROVIDED, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified,
subject the Company to any material tax in any such jurisdiction where
it is not then so subject or file a general consent to service of
process in any such jurisdiction.
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(h) If requested by the Holders, reasonably cooperate with the
Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a
transferee pursuant to the Registration Statement, which certificates
shall be free, but only to the extent permitted by the Purchase
Agreement, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as
any such Holders may request.
(i) Upon the occurrence of any event contemplated by Section
3(c)(v), as promptly as reasonably possible, prepare a supplement or
amendment, including a post-effective amendment, to the Registration
Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered,
neither the Registration Statement nor such Prospectus will contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(j) Comply in all material respects with all applicable rules
and regulations of the Commission.
(k) The Company may require each selling Holder, as a
condition to the inclusion of such Holder's Registrable Securities in
the Registration Statement, to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned
by such Holder and, if required by the Commission, the person thereof
that has voting and dispositive control over the Shares and such other
information as the Company reasonably requests in connection with the
preparation of the Registration Statement.
4. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Trading Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities), (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company,
(v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. Other than as set forth in Section
5(c) hereof, the Holders shall be solely responsible for all fees and
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expenses of any counsel retained by any of them, and will bear all underwriting
discounts and commissions and agents' commissions, if any.
5. INDEMNIFICATION
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder, the officers, directors, trustees, agents and
employees of each of them, each Person who controls any such Holder
(within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) and the officers, directors, trustees, agents and
employees of each such controlling Person, to the fullest extent
permitted by applicable law, from and against any and all losses,
claims, damages, liabilities, costs (including, without limitation,
reasonable attorneys' fees) and expenses (collectively, "Losses"), as
incurred, to the extent arising out of or relating to any untrue or
alleged untrue statement of a material fact contained in the
Registration Statement, any Prospectus or any form of prospectus or in
any amendment or supplement thereto or in any preliminary prospectus,
or arising out of or relating to any omission or alleged omission of a
material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus
or supplement thereto, in light of the circumstances under which they
were made) not misleading, except to the extent, but only to the
extent, that (1) such untrue statements or omissions are based solely
upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that
such information relates to such Holder or such Holder's proposed
method of distribution of Registrable Securities and was reviewed and
expressly approved by such Holder expressly for use in the Registration
Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto (it being understood that each Holder
has approved Annex A hereto for this purpose) or (2) in the case of an
occurrence of an event of the type specified in Section 3(c)(ii)-(v),
the use by such Holder of an outdated or defective Prospectus after the
Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the
Advice or (3) any use of the Registration Statement during any Blackout
Period. The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding of which the Company
is aware in connection with the transactions contemplated by this
Agreement.
(b) Indemnification by Holders. Each Holder shall, severally
and not jointly, indemnify and hold harmless the Company, its
directors, officers, agents and employees, each Person who controls the
Company (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted
by applicable law, from and against all Losses, as incurred, to the
extent arising out of or based upon: (x) such Holder's failure to
comply with the prospectus delivery requirements of the Securities Act
or (y) any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, any Prospectus, or any form of
prospectus, or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated
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therein or necessary to make the statements therein not misleading (i)
to the extent, but only to the extent, that such untrue statement or
omission is contained in any information so furnished in writing by
such Holder to the Company specifically for inclusion in the
Registration Statement or such Prospectus or (ii) to the extent that
(1) such untrue statements or omissions are based solely upon
information regarding such Holder furnished in writing to the Company
by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly
approved by such Holder expressly for use in the Registration Statement
(it being understood that the Holder has approved Annex A hereto for
this purpose), such Prospectus or such form of Prospectus or in any
amendment or supplement thereto or (2) in the case of an occurrence of
an event of the type specified in Section 3(c)(ii)-(v), the use by such
Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated or
defective and prior to the receipt by such Holder of the Advice or (3)
any use of the Registration Statement during any Blackout Period. In no
event shall the liability of any selling Holder hereunder be greater in
amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity
hereunder (an "INDEMNIFIED PARTY"), such Indemnified Party shall
promptly notify the Person from whom indemnity is sought (the
"INDEMNIFYING PARTY") in writing, and the Indemnifying Party shall have
the right to assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations
or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further
review) that such failure shall have prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party or Parties unless: (1) the
Indemnifying Party has agreed in writing to pay such fees and expenses;
(2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named parties to any such Proceeding (including any impleaded
parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel
that a conflict of interest is likely to exist if the same counsel were
to represent such Indemnified Party and the Indemnifying Party (in
which case, if such Indemnified Party notifies the Indemnifying Party
in writing that it elects to employ separate counsel at the expense of
the Indemnifying Party, the Indemnifying Party shall not have the right
to assume the defense thereof and the reasonable fees and expenses of
one separate counsel shall be at the expense of the Indemnifying
Party). In no event shall any Indemnifying Party be liable or
responsible for the fees or expenses of more than one law firm for all
the Indemnified
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Parties. The Indemnifying Party shall not be liable for any settlement
of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party,
effect any settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on
claims that are the subject matter of such Proceeding.
All reasonable fees and expenses of the Indemnified Party
(including reasonable fees and expenses to the extent incurred in
connection with investigating or preparing to defend such Proceeding in
a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten Trading Days of written
notice thereof and presentation of reasonable evidence thereof to the
Indemnifying Party; PROVIDED, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and
expenses applicable to such actions for which such Indemnified Party is
not entitled to indemnification hereunder, determined based upon the
relative faults of the parties.
(d) Contribution. If a claim for indemnification under Section
5(a) or 5(b) is unavailable to an Indemnified Party (by reason of
public policy or otherwise), then each 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,
in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well
as any other relevant equitable considerations. The relative fault 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 of a material fact, has been taken or made
by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such action,
statement or omission. The amount paid or payable by a party as a
result of any Losses shall be deemed to include, subject to the
limitations set forth in Section 5(c), any reasonable attorneys' or
other reasonable fees or expenses incurred by such party in connection
with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided
for in this Section was available to such party in accordance with its
terms.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined
by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section 5(d), no Holder shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the proceeds
actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages
that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission,
except in the case of fraud by such Holder.
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The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties
may have to the Indemnified Parties.
6. MISCELLANEOUS
(a) Remedies. In the event of a breach by the Company or by a
Holder of any of their obligations under this Agreement, each Holder or
the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law and under this Agreement, including
recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company and each Holder agree that
monetary damages would not provide adequate compensation for any losses
incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action
for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
(b) No Piggyback on Registrations. Except as set forth on
Schedule 6(b), neither the Company nor any of its security holders
(other than the Holders in such capacity pursuant hereto) may include
securities of the Company in the Registration Statement other than the
Registrable Securities, and the Company shall not after the date hereof
enter into any agreement providing any right to any of its security
holders to include securities of the Company in the Registration
Statement. Except as set forth in the SEC Reports or on Schedule 6(b),
no Person has any right to cause the Company to effect the registration
under the Securities Act of any securities of the Company. The Company
shall not file any other registration statement until after the
Effective Date.
(c) Compliance. Each Holder covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act
as applicable to it in connection with sales of Registrable Securities
pursuant to the Registration Statement.
(d) Discontinued Disposition. Each Holder agrees by its
acquisition of such Registrable Securities that, upon receipt of a
notice from the Company of the occurrence of any event of the kind
described in Section 3(c) or the pendency of any Blackout Period, such
Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt
of the copies of the supplemented Prospectus and/or amended
Registration Statement or until it is advised in writing (the "ADVICE")
by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated
by reference in such Prospectus or Registration Statement. The Company
may provide appropriate stop orders to enforce the provisions of this
paragraph.
(e) Piggy-Back Registrations. If at any time during the
Effectiveness Period there is not an effective Registration Statement
covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of
others under the Securities Act of any of its equity securities, other
than on Form S-4 or Form S-8 (each as
11
promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with
any acquisition of any entity or business or equity securities issuable
in connection with the stock option or other employee benefit plans,
then the Company shall send to each Holder a written notice of such
determination and, if within fifteen days after the date of such
notice, any such Holder shall so request in writing, the Company shall
include in such registration statement all or any part of such
Registrable Securities such Holder requests to be registered, subject
to customary underwriter cutbacks (without regard to whether any other
shareholder or the Company is cut back) and subject to any other
registration rights granted to third parties by the Company prior to
the date hereof.
(f) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified
or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the same shall be in writing
and signed by the Company and each Holder of the then outstanding
Registrable Securities.
(g) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of (i)
the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number provided for below prior to 6:30
p.m. (New York City time) on a Trading Day, (ii) the Trading Day after
the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number provided for below later than
6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m.
(New York City time) on such date, (iii) the Trading Day following the
date of mailing, if sent by nationally recognized overnight courier
service, or (iv) upon actual receipt by the party to whom such notice
is required to be given. The address for such notices and
communications shall be delivered and addressed as set forth in the
Purchase Agreement
(h) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of
each of the parties and shall inure to the benefit of each Holder. Each
Holder may assign their respective rights hereunder in the manner and
to the Persons as permitted under the Purchase Agreement.
(i) Execution and Counterparts. This Agreement may be executed
in any number of 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. In the event that any signature
is delivered by facsimile transmission, such signature shall create a
valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as
if such facsimile signature were the original thereof.
(j) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be
governed by and construed and enforced in accordance with the internal
laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal proceedings
12
concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a
party hereto or its respective affiliates, directors, officers,
shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York, New York.
Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New
York, New York for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of the any
of this Agreement), and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court or that such
suit, action or proceeding is improper. Each party hereto hereby
irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by delivering a
copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence an
action or proceeding to enforce any provisions of this Agreement, then
the prevailing party in such action or proceeding shall be reimbursed
by the other party for its attorneys fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such
action or proceeding.
(k) Cumulative Remedies. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way
be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(n) Independent Nature of Purchasers' Obligations and Rights.
The obligations of each Purchaser hereunder is several and not joint
with the obligations of any other Purchaser hereunder, and no Purchaser
shall be responsible in any way for the performance of the obligations
of any other Purchaser hereunder. Nothing contained herein or in any
other agreement or document delivered at any closing, and no action
13
taken by any Purchaser pursuant hereto or thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert with respect to such
obligations or the transactions contemplated by this Agreement. Each
Purchaser shall be entitled to protect and enforce its rights,
including without limitation the rights arising out of this Agreement,
and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.
(o) Limitation of Liability. Notwithstanding anything herein
to the contrary, the Company acknowledges and agrees that all
liabilities of Janus Investment Fund ("Janus"), a registered investment
company, arising directly or indirectly, under this Agreement, of any
and every nature whatsoever, shall be satisfied solely out of the
assets of Janus, and that no trustee, officer or holder of shares of
beneficial interest of Janus shall be personally liable for any
liabilities of Janus. The Declaration of Trust of Janus, which is on
file with the Commonwealth of Massachusetts, describes the
responsibilities and liabilities of such parties.
*************************
14
IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.
THE ULTIMATE SOFTWARE GROUP, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: EVP, Chief Financial
Officer & Investor
Relations
[PURCHASERS' SIGNATURE PAGES TO FOLLOW]
15
[PURCHASER SIGNATURE PAGES TO RRA]
JANUS INVESTMENT FUND,
on behalf of its Series Janus Venture Fund
By: /s/ Xxxxx Xxxxxx
---------------------------------------------
Name: Xxxxx Xxxxxx
Title: V.P. and Assistant General Counsel
[PURCHASER SIGNATURE PAGES FOLLOW]
16
[PURCHASER SIGNATURE PAGES TO RRA]
TRUSCO CAPITAL MANAGEMENT, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Managing Director
17
ANNEX A
PLAN OF DISTRIBUTION
The Common Stock is being registered to permit the resale of such
securities by the holders of such securities from time to time after the date of
this prospectus. We will not receive any of the proceeds from the sale by the
Selling Stockholders of the Common Stock. We will bear the fees and expenses
incurred in connection with our obligation to register the Common Stock. These
fees and expenses include registration and filing fees, printing expenses and
fees and disbursements of our counsel. However, the Selling Stockholders will be
solely responsible for all fees and expenses of any counsel retained by any of
them and all underwriting discounts and commissions and agent's commissions, if
any. The Selling Stockholders may offer and sell Common Stock from time to time
in one or more transactions at fixed prices, at prevailing market prices at the
time of sale, at varying prices determined at the time of sale or at negotiated
prices.
Such sales may be effected by a variety of methods, including
the following:
o In market transactions;
o In privately negotiated transactions;
o Through the writing of options;
o In a block trade in which a broker-dealer will
attempt to sell a block of securities as agent but
may position and resell a portion of the block as
principal to facilitate the transaction;
o Through broker-dealers, which may act as agents or
principals.
o Directly to one or more purchasers;
o Through agents; or
o In any combination of the above or by any other
legally available means.
In connection with the sales of Common Stock, the Selling Stockholders
may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the offered securities, short and deliver the Common
Stock to close out such short positions, or loan or pledge the Common Stock to
broker-dealers that in turn may sell such securities.
If a material arrangement with any underwriter, broker, dealer or other
agent is entered into for the sale of any Common Stock through a secondary
distribution or a purchase by a broker or dealer, or if other material changes
are made in the plan of distribution of the Common Stock, a prospectus
supplement will be filed, if necessary, under the Securities Act disclosing the
material terms and conditions of such arrangement.
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To our knowledge, there are currently no plans, arrangements or
understandings between any Selling Stockholders and any underwriter,
broker-dealer or agent regarding the sale of the Common Stock by the Selling
Stockholders. Selling Stockholders may decide to sell only a portion of the
Common Stock offered by them pursuant to this prospectus or may decide not to
sell any Common Stock offered by them pursuant to this prospectus. In addition,
any Selling Stockholders may transfer, devise or give the Common Stock by other
means not described in this prospectus. Any Common Stock covered by this
prospectus that qualifies for sale pursuant to Rule 144 or Rule 144A of the
Securities Act may be sold under Rule 144 or Rule 144A rather than pursuant to
this prospectus.
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 of 1933
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 and any underwriters, broker-dealers or agents
participating in the distribution of the Common Stock may be deemed to be
"underwriters" within the meaning of the Securities Act, and any profit on the
sale of Common Stock by the Selling Stockholders and any commissions received by
any such underwriters, broker-dealers or agents may be deemed to be underwriting
commissions under the Securities Act. If the Selling Stockholders were deemed to
be underwriters, the Selling Stockholders may be subject to statutory
liabilities including, but not limited to, those under Sections 11, 12 and 17 of
the Securities Act and Rule 10b-5 under the Exchange Act.
The Selling Stockholders and any other person participating in the
distribution will be subject to the applicable provisions of the Exchange Act
and the rules and regulations under the Exchange Act, including, without
limitation, Regulation M, which may limit the timing of purchases and sales of
any of the Common Stock by the Selling Stockholders and any other relevant
person. Furthermore, Regulation M may restrict the ability of any person engaged
in the distribution of the Common Stock to engage in market-making activities
with respect to the Common Stock. All of the above may affect the marketability
of the Common Stock and the ability of any person or entity to engage in
market-making activities with respect to the Common Stock.
Under the securities laws of certain states, the Common Stock may be
sold in those states only through registered or licensed brokers or dealers. In
addition, in certain states the Common Stock may not be sold unless the Common
Stock has been registered or qualified for sale in the state or an exemption
from registration or qualification is available and complied with. Each Selling
Stockholder should consult its counsel regarding the application of the states'
Blue Sky or securities law in connection with sales of the Common Stock.
We have agreed to indemnify the Selling Stockholders against certain
civil liabilities, including certain liabilities arising under the Securities
Act, and the Selling Stockholders will be entitled to contribution from us in
connection with those liabilities. The Selling Stockholders
19
will indemnify us against certain civil liabilities, including liabilities
arising under the Securities Act, and we will be entitled to contribution from
the Selling Stockholders in connection with those liabilities.
20
