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Exhibit 4.8
Execution Copy
REGISTRATION RIGHTS AGREEMENT
Dated as of April 27, 1998
relating to
Up to $115,000,000 Aggregate Principal Amount
of 5.25% Convertible Subordinated
Debentures due 2005
by and between
QuadraMed Corporation
and
Xxxxx Xxxxxx Inc.,
Bear, Xxxxxxx & Co. Inc. and
BT Alex. Xxxxx Incorporated
This Registration Rights Agreement (the "Agreement") is made and
entered into as of April 27, 1998, by and between QuadraMed Corporation, a
Delaware corporation (the "Company") and Xxxxx Xxxxxx Inc., Bear, Xxxxxxx & Co.
Inc. and BT Alex. Xxxxx Incorporated (the "Initial Purchasers"), who have
purchased $100,000,000 aggregate principal amount ($115,000,000 aggregate
principal amount if the over-allotment option is exercised in full) of 5.25%
Convertible Subordinated Debentures due 2005 (the "Debentures") of the Company
pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to a Purchase Agreement, dated
April 27, 1998 (the "Purchase Agreement"), between the Company and the Initial
Purchasers. In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement. The execution and delivery of this Agreement is a condition
to closing under the Purchase Agreement. All defined terms used but not defined
herein shall have the meanings ascribed to them in the Indenture (as defined
herein).
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall
have the following meanings:
Act: The Securities Act of 1933, as amended.
Closing Date: The date on which all the Debentures are sold by
the Company to the Initial Purchasers.
Commission: The Securities and Exchange Commission.
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Common Stock: The voting Common Stock, par value $0.01 per share,
of the Company.
Damages Payment Date: With respect to the Debentures or the
Common Stock, as applicable, each Interest Payment Date as defined in the
Indenture.
Effectiveness Target Date: As defined in Section 4.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Debentures inside the United States to (i) certain
"qualified institutional buyers" (as such term is defined in Rule 144A under the
Act) and (ii) certain "accredited investors," as defined in Rule 501 of
Regulation D under the Act, and outside the United States in reliance on
Regulation S under the Act.
Holders: As defined in Section 2(b) hereof.
Indenture: The Indenture, dated as of May 1, 1998, among the
Company and The Bank of New York, as trustee (the "Trustee"), pursuant to which
the Debentures are to be issued, as such Indenture is amended or supplemented
from time to time in accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture.
NASD: National Association of Securities Dealers, Inc.
Offering Memorandum: The Offering Memorandum, dated April 27,
1998, and all amendments and supplements thereto, relating to the Debentures and
prepared by the Company pursuant to the Purchase Agreement.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Preliminary Prospectus: As defined in Section 3(g).
Prospectus: The prospectus included in the Shelf Registration
Statement (as defined herein), as amended or supplemented by any Prospectus
Supplement with respect to the terms of the offering of any portion of the
Transfer Restricted Securities (as defined herein) covered by the Shelf
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments, and all material which may be
incorporated by reference into such prospectus.
Prospectus Supplement: As defined in Section 5(b).
Record Holder: (i) With respect to any Damages Payment Date
relating to the Debentures, each Person who is registered on the books of the
Registrar as the holder of Debentures on the record date with respect to the
Interest Payment Date on which such Damages Payment Date shall occur and (ii)
with respect to any Damages Payment Date relating to the Common Stock, each
Person who is a holder of record of such Common Stock fifteen (15) days prior to
the Damages Payment Date.
Shelf Registration Statement: As defined in Section 3(a) hereof.
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TIA: The Trust Indenture Act of 1939, as amended (15 U.S.C.
Section 77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Debenture and share of
Common Stock of the Company issuable upon conversion of a Debenture, until each
such Debenture or share (i) has been effectively registered under the Act and
disposed of in accordance with the Shelf Registration Statement covering it,
(ii) is distributed to the public pursuant to Rule 144 or (iii) may be sold or
transferred pursuant to Rule 144(k) (or any similar provisions then in force)
under the Act or otherwise.
Underwriter: Any Underwriter, placement agent, selling broker,
dealer manager, qualified independent Underwriter or similar securities industry
professional.
Underwritten Registration or Underwritten Offering: An offering
in which securities of the Company are sold to an Underwriter or with the
assistance of such Underwriter for reoffering to the public on a firm commitment
or best efforts basis.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to
the benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed
to be a holder of Transfer Restricted Securities (each, a "Holder") whenever
such Person owns Transfer Restricted Securities.
SECTION 3. SHELF REGISTRATION
(a) The Company shall cause to be filed with the Commission, on
or prior to 60 days after the Closing Date, a shelf registration statement
pursuant to Rule 415 under the Act (as may then be amended, the "Shelf
Registration Statement") on Form S-1, or Form S-3 if the use of such form is
then available, to cover resales of Transfer Restricted Securities by the
Holders thereof who satisfy certain conditions relating to the provision of
information in connection with the Shelf Registration Statement. The Holders of
such Transfer Restricted Securities shall have provided the representations
required pursuant to Section 3(g) hereof. The Company shall use its reasonable
best efforts to cause such Shelf Registration Statement to be declared effective
by the Commission on or prior to 150 days after the Closing Date. The Company
shall use its reasonable best efforts to keep such Shelf Registration Statement
continuously effective for a period ending two years following the Closing Date
or such shorter period that will terminate when each of the Transfer Restricted
Securities covered by the Shelf Registration Statement shall cease to be a
Transfer Restricted Security. The Company further agrees to use its reasonable
best efforts to prevent the happening of any event that would cause the Shelf
Registration Statement to contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or to be not effective and usable for
resale of the Transfer Restricted Securities during the period that such Shelf
Registration Statement is required to be effective and usable.
Upon the occurrence of any event that would cause the Shelf
Registration Statement (i) to contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or (ii) to be not effective and usable for
resale of Transfer Restricted Securities during the period that such Shelf
Registration Statement is required to be
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effective and usable, the Company shall as promptly as reasonably practicable
file an amendment to the Shelf Registration Statement, in the case of clause
(i), correcting any such misstatement or omission, and in the case of either
clause (i) or (ii), use its reasonable best efforts to cause such amendment to
be declared effective and such Shelf Registration Statement to become usable as
soon as reasonably practicable thereafter.
(b) None of the Company nor any of its security holders (other
than: (1) the Holders of Transfer Restricted Securities in such capacity and (2)
certain holders of the Company's securities as described in the Offering
Memorandum) shall have the right to include any of the Company's securities in
the Shelf Registration Statement.
(c) If (i) only Debentures are to be registered in the Shelf
Registration Statement and the Holders of a majority in aggregate principal
amount of the Debentures to be registered in the Shelf Registration Statement so
elect, or (ii) any shares of Common Stock issued upon conversion of Debentures
are to be included in the Shelf Registration Statement and the Holders of a
majority of the shares of Common Stock to be registered in the Shelf
Registration Statement so elect, an offering of Transfer Restricted Securities
pursuant to the Shelf Registration Statement may by effected in the form of an
Underwritten Offering. In such event, and if the Underwriter advises the Company
and the Holders of such Transfer Restricted Securities in writing that in their
opinion the amount of Transfer Restricted Securities proposed to be sold in such
offering exceeds the amount of Transfer Restricted Securities which can be sold
in such offering, there shall be included in such Underwritten Offering the
amount of such Transfer Restricted Securities which in the opinion of such
Underwriters can be sold, and such amount or number of shares shall be allocated
pro rata among the Holders of such Transfer Restricted Securities on the basis
of the principal amount or number of shares of Transfer Restricted Securities
requested to be included by such Holders. The Holders of the Transfer Restricted
Securities to be registered shall pay all underwriting discounts and commissions
of such Underwriters.
(d) If any of the Transfer Restricted Securities covered by the
Shelf Registration Statement are to be sold in an Underwritten Offering, the
Underwriter(s) that will administer the offering will be selected by the Holders
of a majority of the aggregate principal amount of Debentures included in the
Registration Statement and/or the Holders of a majority of shares of Common
Stock included in the Shelf Registration Statement and issued upon conversion of
the Debentures; provided, however, that such Underwriter(s) shall be reasonably
satisfactory to the Company.
(e) Each Holder whose Transfer Restricted Securities are covered
by a Shelf Registration Statement filed pursuant to this Section 3 agrees, upon
the request of the Underwriter(s) in any Underwritten Offering, not to effect
any public sale or distribution of securities of the Company of the same class
as the securities included in such Shelf Registration Statement, including a
sale pursuant to Rule 144 under the Act (except as part of such registration),
during the 10-day period prior to, and during the 90-day period beginning on,
the closing date of any such Underwritten Offering made pursuant to such Shelf
Registration Statement, to the extent timely notified in writing by such
Underwriter(s).
The foregoing provisions of this Section 3(e) shall not apply to
any Holder of Transfer Restricted Securities if such Holder is prevented by
applicable statute or regulation from entering into any such agreement;
provided, however, that any such Holder shall undertake, in its request to
participate in any such Underwritten Offering, not to effect any public sale or
distribution of any of its Transfer Restricted Securities commencing on the date
of sale of such Transfer Restricted Securities unless it has provided 90 days'
prior written notice of such sale or distribution to the Underwriter(s).
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(f) The Company agrees not to effect any public or private offer,
sale or distribution of Securities of the same quality and nature as the
Transfer Restricted Securities to be registered in an Underwritten Offering,
including a sale pursuant to Regulation D under the Act, during the 10-day
period prior to, and during the 90-day period beginning on, the closing date of
each Underwritten Offering made pursuant to the Shelf Registration Statement, to
the extent timely notified in writing by the Underwriter(s) (except as part of
such registration, if permitted, or pursuant to registrations on Forms S-4 or
S-8 or any successor form to such Forms), unless the Underwriter(s) shall
consent in writing to a shorter period of time; provided, however, that any such
agreement shall permit (A) the issuance by the Company of any shares of Common
Stock issued to employees of the Company or to any other eligible person
pursuant to any employee stock option plan, stock ownership plan, stock bonus
plan or stock compensation plan of the Company in effect on the date of such
Underwritten Offering, (B) the issuance by the Company of Common Stock upon the
conversion of securities, or the exercise of options or warrants, outstanding at
the date of such Underwritten Offering and (C) issuances of Common Stock (or any
securities convertible into or exercisable for Common Stock) in connection with
the acquisition of any related business, product or technology; provided,
however, that in the case of issuances pursuant to paragraph (C) above, any such
shares of Common Stock issued in connection with the Medicus Acquisition (as
defined in the Offering Memorandum) shall be freely tradeable and any such
shares of Common Stock issued in other acquisitions shall be contractually
restricted from resale for at least the duration of the 90-day restricted period
described above.
(g) No Holder of Transfer Restricted Securities may include any
of its Transfer Restricted Securities in any Shelf Registration Statement
pursuant to this Agreement unless such Holder furnishes to the Company in
writing, within 10 business days after receipt of a request therefor, such
information as the Company may reasonably request for use in connection with any
Shelf Registration Statement or Prospectus or preliminary Prospectus (a
"Preliminary Prospectus") included therein.
SECTION 4. LIQUIDATED DAMAGES
(a) If (i) the Shelf Registration Statement is not filed with the
Commission on or prior to 60 days after the Closing Date, (ii) the Shelf
Registration Statement has not been declared effective by the Commissioner
within 150 days after the Closing Date (the "Effectiveness Target Date"), or
(iii) the Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective or useable for resale without being succeeded
immediately by any additional Shelf Registration Statement filed and declared
effective (each such event referred to in clauses (i) through (iii), a
"Registration Default"), the Company will pay liquidated damages to each Holder
of Transfer Restricted Securities who has complied with such Holder's
obligations under this Agreement, during the first 90-day period immediately
following the occurrence of such Registration Default in an amount equal to
one-quarter of one percent (25 basis points) per annum per $1,000 principal
amount of Debentures or $2.50 per annum per 30.075 shares of Common Stock
(subject to adjustment in the event of stock splits, stock recombinations, stock
dividends and the like) constituting Transfer Restricted Securities held by such
Holder and 50 basis points per annum per $1,000 principal amount of Debentures
or $5.00 per annum per 30.075 shares of Common Stock (subject to adjustment as
set forth above) constituting Transfer Restricted Securities for any additional
days during which a Registration Default has occurred and is continuing. All
accrued liquidated damages shall be paid to Record Holders by wire transfer of
immediately available funds or by federal funds check by the Company on each
Damages Payment Date. Following the cure of all Registration Defaults,
liquidated damages will cease to accrue with respect to such Registration
Default. No Liquidated Damages shall be payable with respect to any week
commencing three years or more after the Closing Date.
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All of the Company's obligations set forth in the preceding
paragraph which are outstanding with respect to any Transfer Restricted Security
at the time such security ceases to be a Transfer Restricted Security shall
survive until such time as all such obligations with respect to such security
shall have been satisfied in full.
SECTION 5. REGISTRATION PROCEDURES
In connection with the Shelf Registration Statement, the Company
will use its reasonable best efforts to effect such registration to permit the
sale of the Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution or disposition thereof, and pursuant
thereto the Company will as expeditiously as possible after the Closing Date:
(a) prepare and file with the Commission a Shelf Registration
Statement relating to the registration on Form S-1, or Form S-3 if the use of
such form is then available, for the sale of the Transfer Restricted Securities
in accordance with the intended method or methods of distribution thereof and
shall include all financial statements required to be included or incorporated
by reference therein; cooperate and assist in any filings required to be made
with the NASD and use its reasonable best efforts to cause such Shelf
Registration Statement to become effective and approved by such governmental
agencies or authorities as may be necessary to enable the selling Holders to
consummate the disposition of such Transfer Restricted Securities; provided,
however, that before filing a Shelf Registration Statement or any Prospectus, or
any amendments or supplements thereto, the Company will furnish to the Holders
and the Underwriter(s), if any, copies of all such documents proposed to be
filed (except that the Company shall not be required to furnish any exhibits to
such documents, including those incorporated by reference, unless so requested
by a Holder in writing), and the Company will not file any Shelf Registration
Statement or amendment thereto or any Prospectus or any supplement thereto to
which (i) the Underwriter(s), if any, shall reasonably object or (ii) if there
are no Underwriters and if (A) only Debentures are to be registered in the Shelf
Registration Statement and the Holders of a majority in aggregate principal
amount of the Debentures registered in the Shelf Registration Statement shall
reasonably object, or (B) any shares of Common Stock issued upon conversion of
the Debentures are included in the Shelf Registration Statement and the Holders
of a majority of the shares of Common Stock so registered in the Shelf
Registration Statement shall reasonably object, in each such case within five
business days after the receipt thereof. A Holder or Underwriter, if any, shall
be deemed to have reasonably objected to such filing if the Shelf Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed to be
filed contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading which misstatement or omission is specifically identified
to the Company in writing within such five business days;
(b) prepare and file with the Commission such amendments and
post-effective amendments to the Shelf Registration Statement as may be
necessary to keep the Shelf Registration Statement effective for the applicable
period set forth in Section 3(a) hereof, or such shorter period as will
terminate when all Transfer Restricted Securities covered by such Shelf
Registration Statement have been sold; cause the Prospectus to be supplemented
by any required supplement thereto (a "Prospectus Supplement"), and as so
supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully
with the applicable provisions of Rules 424 and 430A under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Shelf Registration Statement
during the applicable period in accordance with the intended method or methods
of distribution by the sellers thereof set forth in such Shelf Registration
Statement, Prospectus or Prospectus Supplement;
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(c) if requested by the Holders of Transfer Restricted
Securities, or if the Transfer Restricted Securities are being sold in an
Underwritten Offering, the Underwriter(s) of such Underwritten Offering,
promptly incorporate in the Prospectus, any Prospectus Supplement or
post-effective amendment to the Shelf Registration Statement such information as
the Underwriters and/or the Holders of Transfer Restricted Securities being sold
agree should be included therein relating to the plan of distribution of the
Transfer Restricted Securities, including, without limitation, information with
respect to the principal amount of Transfer Restricted Securities being sold to
such Underwriter(s), the purchase price being paid therefor and any other terms
with respect to the offering of the Transfer Restricted Securities to be sold in
such offering; and make all required filings of such Prospectus, Prospectus
Supplement or post-effective amendment as soon as practicable after the Company
is notified of the matters to be incorporated in such Prospectus, Prospectus
Supplement or post-effective amendment;
(d) advise the Underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, to confirm such advice in writing,
(i) when the Prospectus or any Prospectus Supplement or post-effective amendment
to the Shelf Registration Statement has been filed, and, with respect to the
Shelf Registration Statement or any post-effective amendment thereto, when the
same has become effective, (ii) of any request by the Commission for amendments
to the Shelf Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto, (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of the Shelf
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted Securities
for offering or sale in any jurisdiction, or the initiation of any proceeding
for any of the preceding purposes, (iv) if at any time the representations and
warranties of the Company contemplated by paragraph (m)(i) below cease to be
true and correct, and (v) of the existence of any fact and the happening of any
event that makes any statement of a material fact made in the Shelf Registration
Statement, the Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of any
additions to or changes in the Shelf Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the Shelf
Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities or
Blue Sky laws, the Company shall use their reasonable best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(e) promptly following the filing of any document that is to be
incorporated by reference into the Shelf Registration Statement or the
Prospectus subsequent to the initial filing of the Shelf Registration Statement,
provide copies of such document (excluding exhibits, unless requested by a
Holder in writing) to the Holders;
(f) furnish, upon request, to each Holder and each of the
Underwriter(s), if any, without charge, at least one copy of the Shelf
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference therein and
all exhibits (excluding exhibits to documents incorporated by reference therein
unless requested by such Holder);
(g) deliver to each selling Holder and each of the
Underwriter(s), if any, without charge, as many copies of any Preliminary
Prospectus and the Prospectus and any amendments or supplements thereto as such
Persons may reasonably request; the Company consents to the use of any
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Preliminary Prospectus and the Prospectus and any amendments or supplements
thereto by each of the selling Holders and each of the Underwriter(s), if any,
in connection with the public offering and the sale of the Transfer Restricted
Securities covered by any Preliminary Prospectus and the Prospectus or any
amendments or supplements thereto;
(h) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the Underwriter(s), if any, and
their respective counsel in connection with the registration and qualification
of the Transfer Restricted Securities under the securities or Blue Sky laws of
such jurisdictions as the selling Holders or Underwriter(s) may request and do
any and all other acts or things necessary or advisable to enable the
disposition in such jurisdiction of the Transfer Restricted Securities covered
by the Shelf Registration Statement; provided, however, that the Company shall
not be required (i) to register or qualify as a foreign corporation where it is
not now so qualified, (ii) to take any action that would subject it to the
service of process in suits, other than as to matters and transactions relating
to the Shelf Registration Statement, in any jurisdiction where it is not now so
subject, or (iii) to take any action that would subject it to taxation in any
jurisdiction in an amount greater than it would be so subject without having
taken such action;
(i) cooperate with the selling Holders and the Underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be in
such denominations and registered in such names as the Holders or the
Underwriter(s), if any, may request at least two business days prior to any sale
of Transfer Restricted Securities;
(j) use its reasonable best efforts to cause the Transfer
Restricted Securities covered by the Shelf Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to enable the seller or sellers thereof or the
Underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause (h) above;
(k) if any fact or event contemplated by clause (d)(v) above
shall exist or have occurred, prepare a post-effective amendment or supplement
to the Shelf Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading;
(l) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of the Shelf Registration Statement and
provide the Trustee under the Indenture and/or the transfer agent for the Common
Stock with printed certificates for the Transfer Restricted Securities which are
in a form eligible for deposit with the Depository Trust Company;
(m) enter into such agreements (including an underwriting
agreement) and take all such other actions in connection therewith as may
reasonably be required in order to expedite or facilitate the disposition of the
Transfer Restricted Securities pursuant to the Shelf Registration Agreement, in
connection with an Underwritten Registration, and (i) make such representations
and warranties to the Holders and the Underwriter(s), in form, substance and
scope as they may reasonably request and as are customarily made by issuers to
Underwriters in primary Underwritten Offerings and covering matters including,
but not limited to, those set forth in the Purchase Agreement; (ii) obtain
opinions of counsel to the Company and updates thereof in customary form and
covering matters
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reasonably requested by the Underwriter(s) of the type customarily covered in
legal opinions to Underwriters in connection with primary Underwritten Offerings
addressed to each selling Holder and the Underwriter requesting the same and
covering the matters as may be reasonably requested by such Holders and
Underwriters; (iii) obtain, to the extent permitted by Statement on Auditing
Standards No. 72 or any successor Statement thereto, "cold comfort" letters and
updates thereof from the Company's independent certified public accountants
addressed to the selling Holders of Transfer Restricted Securities and the
Underwriters requesting the same, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters to
Underwriters in connection with primary Underwritten Offerings; (iv) set forth
in full or incorporate by reference in the underwriting agreement the
indemnification provisions and procedures of Section 7 hereof with respect to
all parties to be indemnified pursuant to said Section; and (v) deliver such
documents and certificates as may be reasonably requested by the Holders of the
Transfer Restricted Securities being sold or the Underwriter(s) of such
Underwritten Offering to evidence compliance with clause (i) above and with any
customary conditions contained in the underwriting agreement entered into by the
Company pursuant to this clause (m). The above shall be done at or prior to each
closing under such underwriting agreement, as and to the extent required
thereunder;
(n) make available at reasonable times and in a reasonable manner
for inspection by a representative of the Holders of the Transfer Restricted
Securities, any Underwriter participating in any disposition pursuant to such
Shelf Registration Statement, and any attorney or accountant retained by such
selling Holders or any of the Underwriters, all financial and other records,
pertinent corporate documents and properties of the Company and cause the
Company's officers, directors and employees to supply all information reasonably
requested by any such Holder, Underwriter, attorney or accountant in connection
with such Shelf Registration Statement prior to its effectiveness, provided,
however, that such representatives, attorneys or accountants shall agree to keep
confidential (which agreement shall be confirmed in writing in advance to the
Company if the Company shall so request) all information, records or documents
made available to such persons which are not otherwise available to the general
public unless disclosure of such records, information or documents is required
by court or administrative order (of which the Company shall have been given
prior notice and an opportunity to defend) after the exhaustion of all appeals
therefrom, and to use such information obtained pursuant to this provision only
in connection with the transaction for which such information was obtained, and
not for any other purpose;
(o) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally available
to its security holders, as soon as practicable, a consolidated earnings
statement, which consolidated earnings statement shall satisfy the provisions of
Section 11(a) of the Act, for the twelve-month period (i) commencing at the end
of any fiscal quarter in which Transfer Restricted Securities are sold to
Underwriters in a firm commitment or best efforts Underwritten Offering or (ii)
if not sold to Underwriters in such an offering, beginning with the first month
of the Company's first fiscal quarter commencing after the effective date of the
Shelf Registration Statement;
(p) cause the Indenture to be qualified under the TIA, and, in
connection therewith, cooperate with the Trustee and the Holders to effect such
changes to the Indenture as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute and use its best
efforts to cause the Trustee to execute, all documents as may be required to
effect such changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a timely manner;
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(q) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the Shelf Registration Statement at the
earliest possible moment;
(r) cause all Transfer Restricted Securities covered by the Shelf
Registration Statement to be listed on each securities exchange or quotation
system on which similar securities issued by the Company are then listed if
requested by the Holders of a majority in aggregate principal amount and/or
number of shares of such Transfer Restricted Securities or the Underwriters, if
any; cause the Debentures covered by the Shelf Registration Statement to be
rated with the appropriate rating agencies, if so requested by the Holders of a
majority in aggregate principal amount of such Debentures or the Underwriters;
and
(s) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
Underwriter (including any "qualified independent Underwriter" that is required
to be retained in accordance with the rules and regulations of the NASD).
Each Holder as to which any Shelf Registration Statement is being
effected agrees to furnish promptly to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading or necessary to cause such
Shelf Registration Statement not to omit a material fact with respect to such
Holder necessary in order to make the statements therein not misleading.
Each Holder agrees by acquisition of such Transfer Restricted
Securities that, upon receipt of any notice from the Company of the existence of
any fact of the kind described in Section 5(d)(v) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(k) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings with respect to the
Prospectus. If so directed by the Company, each Holder will 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 Transfer
Restricted Securities current at the time of receipt of such notice. In the
event Company shall give any such notice, the time period regarding the
effectiveness of Shelf Registration Statement set forth in Section 3(a) hereof
shall be extended by the number of days during the period from and including the
date of the giving of such notice pursuant to Section 5(d)(v) hereof to and
including the date when each selling Holder covered by such Shelf Registration
Statement shall have received the copies of the supplemented or amended
Prospectus contemplated by Section 5(k) hereof or shall have received the
Advice.
SECTION 6. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or
compliance with this Agreement (the "Registration Expenses") will be borne by
the Company, regardless whether a Shelf Registration Statement becomes
effective, including without limitation:
(i) all registration and filing fees and expenses (including
filings made with the NASD);
(ii) and expenses of compliance with federal securities or
state blue sky laws;
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(iii) expenses of printing (including, without limitation,
expenses of printing or engraving certificates for the Transfer
Restricted Securities in a form eligible for deposit with
Depository Trust Company and of printing the Prospectus and any
Preliminary Prospectus), messenger and delivery services and
telephone;
(iv) reasonable fees and disbursements of counsel for the
Company and for the Holders of the Transfer Restricted
Securities (subject to the provisions of Section 6(b) hereof);
(v) fees and disbursements of all independent certified
public accountants of the Company (including the expenses of any
special audit and "cold comfort" letters required by or
incidental to the preparation and filing of a Shelf Registration
Statement and Prospectus and the disposition of Transfer
Restricted Securities);
(vi) fees and expenses associated with any NASD filing
required to be made in connection with the Shelf Registration
Statement, including, if applicable, the fees and expenses of
any "qualified independent Underwriter" (and its counsel) that
is required to be retained in accordance with the rules and
regulations of the NASD; and
(vii) fees and expenses of listing the Transfer Restricted
Securities on any securities exchange or quotation system in
accordance with Section 5(q) hereof.
The Company will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, rating agency fees and the fees and expenses of any Person, including
special experts, retained by the Company. The Holders of Transfer Restricted
Securities shall bear the expense of any broker's commission or Underwriters'
discount or commission.
(b) In connection with the Shelf Registration Statement, the
Company will reimburse the Holders of Transfer Restricted Securities being
registered pursuant to such Shelf Registration Statement for the fees and
disbursements of not more than one counsel chosen by the Holders of a majority
of the principal amount of the Debentures to be included in the Shelf
Registration Statement, provided, however, that in the case of an Underwritten
Offering which includes shares of Common Stock, such counsel shall be chosen by
the Holders of a majority of the shares of Common Stock to be included in such
Underwritten Offering.
Notwithstanding the provisions of this Section 6(b), each Holder
of Transfer Restricted Securities shall pay all Registration Expenses to the
extent required by applicable law.
SECTION 7. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each Holder
(each such Holder an "Indemnified Holder"), each agent, employee, officer and
director of any Indemnified Holder and each person that controls each
Indemnified Holder within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, and agents, employees, officers and directors or any such
controlling person of any Indemnified Holder from and against any and all
losses, claims, damages, judgments, liabilities and expenses (including the
reasonable fees and expenses of counsel and other expenses in connection with
investigating, defending or settling any such action or claim) as they are
incurred which arise out of or based upon any untrue statement or alleged untrue
statement of a
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material fact contained in the Shelf Registration Statement or the Prospectus or
any amendment or supplement thereto or any Preliminary Prospectus 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
not misleading, except (i) the Company shall not be liable to any Indemnified
Holder in any such case insofar as such losses, claims, damages, judgments,
liabilities or expenses arise out of, or are based upon, any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to such Indemnified Holder or Indemnified Underwriter
furnished in writing by such Indemnified Holder to the Company expressly for use
therein and (ii) the Company shall not be liable to any Indemnified Holder under
the indemnity agreement in this Section 7(a) with respect to any Preliminary
Prospectus to the extent that any such loss, claim, damage, judgment, liability
or expense results solely from the fact that any Indemnified Holder sold
Transfer Restricted Securities to a person to whom there was not sent or given,
at or prior to the written confirmation of such sale, a copy of the Prospectus
as then amended or supplemented, if the Company has previously furnished
sufficient copies thereof to the Indemnified Holder.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against any
Indemnified Holder with respect to which indemnity may be sought against the
Company pursuant to this Section 7, such Indemnified Holder shall promptly
notify the Company in writing, and the Company shall have the right to assume
the defense thereof, including the employment of counsel reasonably satisfactory
to such Indemnified Holder and payment of all fees and expenses; provided,
however, that the omission so to notify the Company shall not relieve the
Company from any liability that they may have to any Indemnified Holder (except
to the extent that the Company is materially prejudiced or otherwise forfeits
substantive rights or defenses by reason of such failure). An Indemnified Holder
shall have the right to employ separate counsel in any such action or proceeding
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Holder unless (i) the
Company agrees in writing to pay such fees and expenses, (ii) the Company has
failed promptly to assume the defense and employ counsel satisfactory to the
Indemnified Holder or (iii) the named parties to any such action or proceeding
(including any unpleaded parties) include both the Indemnified Holder and the
Company and such Indemnified Holder shall have been advised in writing by its
counsel that representation of them and the Company by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or not
such representation has been proposed) due to actual or potential differing
interests between them (in which case the Company shall not have the right to
assume the defense of such action on behalf of such Indemnified Holder). It is
understood that the Company shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for such Indemnified Holders, which firm shall be
designated in writing by the Holders of the majority of the aggregate principal
amount of Debentures and/or the number of shares of Common Stock on behalf of
such Indemnified Holders, and that all such fees and expenses shall be
reimbursed as they are incurred. The Company shall not be liable for any
settlement of any such action effected without the written consent of the
Company, but if settled with the written consent of the Company, or if there is
a final judgment with respect thereto, the Company agrees to indemnify and hold
harmless each Indemnified Holder from and against any loss or liability by
reason of such settlement or judgment. The Company shall not, without the prior
written consent of each Indemnified Holder affected thereby, effect any
settlement of any pending or threatened proceeding in which such Indemnified
Holder has sought indemnity hereunder, unless such settlement includes an
unconditional release of such Indemnified Holder from all liability arising out
of such action, claim, litigation or proceeding.
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(c) Each Indemnified Holder agrees to indemnify and hold harmless
the Company, its directors, its officers who sign the Registration Statement and
any person controlling the Company within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act (collectively, the "Company Indemnified
Parties") to the same extent as the foregoing indemnity from the Company to any
Indemnified Holder, but only with respect to information relating to each
Indemnified Holder furnished to the Company in writing by each Indemnified
Holder, expressly for use in the Registration Statement, Prospectus (or any
amendment or supplement thereto), or any Preliminary Prospectus. In case any
action shall be brought against any Company Indemnified Party based on the
Registration Statement, Prospectus (or any amendment or supplement thereto), or
any Preliminary Prospectus and in respect of which indemnification may be sought
against each Indemnified Holder pursuant to this Section 7(c), each Indemnified
Holder shall have the rights and duties given to the Company by Section 7(a)
(except that if the Company shall have assumed the defense thereof, each
Indemnified Holder may, but shall not be required to, employ separate counsel
therein and participate in the defense thereof and the fees and expenses of such
counsel shall be at the expense of the Indemnified Holder) and the Company
Indemnified Parties shall have the rights and duties given to the Indemnified
Holders by Section 7(b).
(d) If the indemnification provided for in this Section 7 is
unavailable to any party entitled to indemnification pursuant to Section 7(a) or
7(c), 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, claims, damages, judgments, liabilities and expenses
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and each Indemnified Holder on the other
from the offering of the Transfer Restricted Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and each Indemnified Holder on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
judgments, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and each Indemnified Holder on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total net proceeds from the
offering (before deducting expenses) received by each Indemnified Holder, as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Company on the one hand and each Indemnified Holder on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or by the Indemnified Holder on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company and each Indemnified Holder agree that it would
not be just and equitable if contribution pursuant to Section 7(d) were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in Section 7(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. No
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not found guilty of such fraudulent misrepresentation.
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(f) The Company shall also indemnify each Underwriter
participating in the distribution (as described in such registration statement),
their officers and directors and each person who controls such persons (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) to the same extent as provided above with respect to the indemnification of
the Holders.
(g) The indemnity and contribution agreements contained in this
Section 7 are in addition to any liability that any indemnifying party may
otherwise have to any indemnified party.
SECTION 8. RULE 144A
The Company hereby agrees with each Holder, for so long as any of
the Debentures or shares of Common Stock that are Transfer Restricted Securities
remain outstanding or, if earlier, two years from the Closing Date, and during
any such period in which the Company is not subject to Section 13 or 15(d) of
the Exchange Act, to make available to the Initial Purchasers or any beneficial
owner of the Debentures or shares of such Common Stock in connection with any
sale thereof and any prospective purchaser of such Debentures or Common Stock
from such Initial Purchaser or beneficial owner, the information required by
Rule 144A(d)(4) under the Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A.
SECTION 9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Offering hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements, (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements and (c) furnishes the Company in writing information in accordance
with Section 3(g) and agrees to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and any person
controlling the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act to the extent contemplated by Section 7(c).
SECTION 10. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the
Shelf Registration Statement who desire to do so may sell such Transfer
Restricted Securities in an Underwritten Offering. In any such Underwritten
Offering, the Underwriter(s) that will administer the offering will be selected
by the Holders of the Transfer Restricted Securities included in such offering
in the manner specified in Section 3(c); provided, however, that such
Underwriters must be reasonably satisfactory to the Company.
SECTION 11. MISCELLANEOUS
(a) Remedies. Each Holder of Transfer Restricted Securities, in
addition to being entitled to exercise all rights provided herein, and as
provided in the Purchase Agreement and granted by law, including recovery of
damages, will be entitled to specific performance of such Holder's 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 the defense in any action for
specific performance that a remedy at law would be adequate.
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(b) No Inconsistent Agreements. The Company will not on or after
the date of this Agreement enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders of
Transfer Restricted Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders of Transfer Restricted
Securities hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company's securities under any
other agreements.
(c) 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 Company has obtained the written consent of Holders
of a majority in aggregate principal amount of the Debentures constituting
Transfer Restricted Securities affected by such amendment, modification,
supplement, waiver or departure (provided that, if any such Transfer Restricted
Securities are shares of Common Stock issued upon conversion of Debentures,
consents by Holders of such shares shall be calculated as if such conversions
had not taken place). Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof that relates exclusively to the rights of
Holders of Transfer Restricted Securities whose securities are being sold
pursuant to such Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders of Transfer Restricted Securities
shall be valid only with the written consent of Holders of at least 66-2/3% of
the Transfer Restricted Securities being sold, in each case calculated in
accordance with the provisions of Section 3(c).
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder of Transfer Restricted Securities, at the
address set forth on the records of the Registrar under the
Indenture, with a copy to the Registrar; and
(ii) if to the Company or an Initial Purchaser, initially at
its address set forth in the Purchase Agreement and thereafter
at such other address, notice of which is given in accordance
with the provisions of this Section.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and on
the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder of Transfer Restricted Securities unless
and to the extent such successor or assign acquired Transfer Restricted
Securities from such Holder; and provided further that nothing herein shall be
deemed to permit any assignment, transfer or any disposition of Transfer
Restricted Securities in violation of the terms of the Purchase Agreement. If
any transferee of any Holder shall acquire
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Transfer Restricted Securities, in any manner, whether by operation of law or
otherwise, such Transfer Restricted Securities shall be held subject to all of
the terms of this Agreement and by taking and holding such Transfer Restricted
Securities such person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement and such
Person shall be entitled to receive the benefits hereof.
(f) 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.
(g) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. This agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contacts made and to be performed within the State of New York.
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(j) Entire Agreement. This Agreement together with the other
Operative Documents (as defined in the Purchase 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, other than those set forth or referred to
herein with respect to the registration rights granted by the Company with
respect to the securities sold pursuant to the Purchase Agreement. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
QUADRAMED CORPORATION
By: /s/ Xxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Executive Vice President
and Chief Financial Officer
XXXXX XXXXXX INC.
BEAR, XXXXXXX & CO. INC.
BT ALEX. XXXXX INCORPORATED
By: Xxxxx Xxxxxx Inc.
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Managing Director
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