1
REGISTRATION RIGHTS AGREEMENT
dated as of February 23, 1998
between
OXFORD HEALTH PLANS, INC.
and
TPG OXFORD LLC
2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT ("Agreement"), dated as
of February 23, 1998, by and between Oxford Health Plans, Inc., a
Delaware corporation (the "Company"), and TPG Oxford LLC, a
Delaware limited liability company (together with its permitted
assigns, "TPG" or the "Investor").
Recitals
A. The Company and the Investor have entered into an
Investment Agreement, dated as of February 23, 1998 (the
"Investment Agreement"), pursuant to which the Investor has
agreed to purchase, in the aggregate, from the Company, and the
Company has agreed to issue and sell to the Investor, (i) 245,000
shares of the Company's Series A Cumulative Preferred Stock, par
value $0.01 per share (the "Series A Preferred Stock"), together
with detachable Series A Warrants (the "Series A Warrants"), to
purchase 15,800,000 shares of common stock, par value $0.01 per
share (the "Common Stock"), of the Company, and (ii) 105,000
shares of the Company's Series B Cumulative Preferred Stock, par
value $0.01 per share (the "Series B Preferred Stock," and
together with the Series A Preferred Stock, the "Senior Preferred
Stock"), together with detachable Series B Warrants (the "Series
B Warrants," and together with the Series A Warrants, the
"Warrants"), to purchase (A) prior to the Shareholder Approval,
6,730 shares of the Company's Series C Junior Participating
Preferred Stock, par value $0.01 per share (the "Junior Preferred
Stock") or (B) following the Shareholder Approval, 6,730,000
shares of Common Stock; and
B. As an inducement to the Investor entering into the
Investment Agreement, the Investor has required that the Company
agree, and the Company has agreed, to provide the registration
rights set forth in this Agreement; and
C. The consummation of the Closing is conditioned
upon, among other things, the execution and delivery of this
Agreement;
Agreement
NOW, THEREFORE, in consideration of the foregoing and
the mutual premises, covenants and agreements of the parties
hereto, and for other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
SECTION 1. DEFINITIONS.
-----------
1.1. Capitalized Terms. Capitalized terms used but not
defined herein shall have the respective meanings given to them
in the Investment Agreement.
1.2. Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
3
"Adverse Disclosure" means public disclosure of
material non-public information, which disclosure in the Board's
good faith judgment after consultation with counsel to the
Company (i) would be required to be made in any registration
statement filed with the Commission by the Company so that such
registration statement would not be materially misleading; (ii)
would not be required to be made at such time but for the filing
of such registration statement; and (iii) the Company has a bona
fide business purpose for not disclosing publicly.
"Agreement" has the meaning set forth in the preamble
hereto.
"Board" means the board of directors of the Company.
"Common Stock" means the Company's common stock, par
value $0.01 per share.
"Company" has the meaning set forth in the preamble
and shall include the Company's successors by merger,
acquisition, reorganization or otherwise.
"Company Public Sale" has the meaning set forth in
Section 2.3(a).
"Demand Notice" has the meaning set forth in Section
2.2(e).
"Demand Period" has the meaning set forth in Section
2.2(d).
"Demand Registration" has the meaning set forth in
Section 2.2(a).
"Demand Registration Statement" has the meaning set
forth in Section 2.2(a).
"Exchange Act" means the Securities Exchange Act of
1934, as amended, and any successor thereto, and any rules and
regulations promulgated thereunder, all as the same shall be in
effect from time to time.
"Filing Date" means the 270th day following the
Closing Date, provided, however, that, in the event the Board
determines in good faith that an extension of the relevant filing
beyond such 270th day is in the best interest of the Company, the
Filing Date may be extended to the earliest date thereafter to
which the Board determines it may be extended consistent with the
best interest of the Company, but no later than the 360th day
following the Closing Date.
A "holder" or "holders" means any holder or holders of
Registrable Securities (whether or not acquired pursuant to the
Investment Agreement) who is a party hereto or who otherwise
agrees in writing to be bound by the provisions of this
Agreement.
"Indemnified Parties" has the meaning set forth in
Section 2.9.
"Investment Agreement" has the meaning set forth in
the recitals hereto.
2
4
"Investor" has the meaning set forth in the preamble
hereto.
"Junior Preferred Stock" has the meaning set forth in
the Investment Agreement.
"Material Adverse Event" means (i) any general
suspension of trading in, or limitation on prices for, securities
on any national securities exchange or in the over-the-counter
market in the United States of America, (ii) the declaration of a
banking moratorium or any suspension of payments in respect of
banks in the United States of America, (iii) the commencement of
a war, armed hostilities or other international or national
calamity involving the United States of America, (iv) any
limitation (whether or not mandatory) by any governmental
authority on, or any other event which materially affects the
extension of credit by banks or other financial institutions, (v)
any material adverse effect on in the Company's business,
condition (financial or otherwise) or prospects or (vi) a 10% or
more decline in the Dow Xxxxx Industrial average or the Standard
and Poor's Index of 400 Industrial Companies, in each case from
the date a Demand Registration is requested.
"NASD" means the National Association of Securities
Dealers, Inc.
"Person" means any individual, firm, limited liability
company or partnership, joint venture, corporation, joint stock
company, trust or unincorporated organization, incorporated or
unincorporated association, government (or any department, agency
or political subdivision thereof) or other entity of any kind,
and shall include any successor (by merger or otherwise) of such
entity.
"Piggyback Registration" has the meaning set forth in
Section 2.3(a).
"Preferred Stock" has the meaning set forth in the
Investment Agreement.
"Prospectus" means the prospectus included in any
Registration Statement as amended or supplemented by any
prospectus supplement with respect to the terms of the offering
of any portion of the Registrable Securities covered by the
Registration Statement and all other amendments and supplements
to the prospectus, including post-effective amendments and all
other material incorporated by reference in such prospectus.
"Registrable Securities" means any Preferred Stock,
Warrant, Warrant Stock or Unit, and any securities that may be
issued or distributed or be issuable in respect of any
Registrable Securities by way of stock dividend, stock split or
other distribution, merger, consolidation, exchange offer,
recapitalization or reclassification or similar transaction;
provided, however, that any such Registrable Securities shall
cease to be Registrable Securities to the extent (i) a
Registration Statement with respect to the sale of such
Registrable Securities has been declared effective under the
Securities Act and such Registrable Securities have been disposed
of in accordance with the plan of distribution set forth in such
Registration Statement, (ii) such Registrable Securities have
been distributed pursuant to Rule 144 (or any similar provision
then in force) under the Securities Act, or (iii) such
Registrable Securities shall have been otherwise
transferred and new certificates for them not bearing a legend
restricting transfer under the Securities Act shall have been
delivered by the Company and they may be publicly resold
3
5
without registration or qualification of them under the
Securities Act or any state securities or "Blue Sky" law then in
force. For purposes of this Agreement, a "class" of Registrable
Securities means either (a) the Preferred Stock, (b) the Warrants
and the Warrant Stock or (c) the Units; and, in the case of the
class consisting of Warrants and Warrant Stock, any reference to
a percentage (or a majority) of such class of Registrable
Securities shall mean that percentage of such class of
Registrable Securities, collectively, computed on the assumption
that all such Warrants were exercised. A percentage (or a
majority) of the Registrable Securities shall be determined based
on the number of securities.
"Registration" means a registration of the Company's
securities for sale to the public under a Registration Statement.
"Registration Expenses" has the meaning set forth in
Section 2.8(a).
"Registration Statement" means any registration
statement of the Company filed with, or to be filed with, the SEC
under the rules and regulations promulgated under the
Securities Act, including the Prospectus, amendments and
supplements to such registration statement, including
post-effective amendments, and all exhibits and all material
incorporated by reference in such registration statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended, and any successor thereto, and any rules and regulations
promulgated thereunder, all as the same shall be in effect from
time to time.
"Shelf Period" has the meaning set forth in Section
2.1(b).
"Shelf Registration" means a Registration effected
pursuant to Section 2.1.
"Shelf Registration Statement" means a Registration
Statement of the Company filed with the SEC on Form S-3 (or any
successor form or other appropriate form under the Securities
Act) for an offering to be made on a continuous basis pursuant to
Rule 415 under the Act (or any similar rule that may be adopted
by the SEC) covering some or all of the Registrable Securities,
as applicable.
"Underwritten Offering" means a Registration in which
securities of the Company are sold to an underwriter on a firm
commitment basis for reoffering to the public.
"Unit" means any combination of Preferred Stock,
Warrants or Warrant Stock proposed to be sold or sold as a unit.
"Warrants" means the Warrants issued or issuable
pursuant to the Investment Agreement or in substitution or in
exchange therefor.
"Warrant Stock" means any Common Stock, Preferred
Stock or other security issued or issuable upon exercise of any
Warrant, including any Common Stock, Preferred Stock
4
6
or other security issued or issuable in respect of outstanding
Warrant Stock upon any stock dividend, stock split or other
distribution, merger, consolidation, exchange offer,
recapitalization or reclassification or similar transaction.
1.3. General Interpretive Principles. Whenever used in
this Agreement, except as otherwise expressly provided or unless
the context otherwise requires, any noun or pronoun shall be
deemed to include the plural as well as the singular and to cover
all genders. The name assigned this Agreement and the section
captions used herein are for convenience of reference only and
shall not be construed to affect the meaning, construction or
effect hereof. Unless otherwise specified, the terms "hereof,"
"herein" and similar terms refer to this Agreement as a whole
(including the exhibits, schedules and disclosure statements
hereto), and references herein to Sections refer to Sections of
this Agreement.
SECTION 2. REGISTRATION RIGHTS.
-------------------
2.1. Shelf Registration.
------------------
(a) Filing. On or before the Filing Date, the Company
shall file with the SEC a Shelf Registration Statement relating
to the offer and sale of the Registrable Securities by the
holders thereof from time to time in accordance with the methods
of distribution elected by such holders and set forth in such
Shelf Registration Statement and, thereafter, shall use its
reasonable best efforts to cause such Shelf Registration
Statement to be declared effective under the Securities Act. If,
on the Filing Date, the Company does not qualify to file a Shelf
Registration Statement, then the provisions of Section 2.2,
below, shall apply, but at any time thereafter that the Company
does so qualify, it shall, as promptly as practicable, file a
Shelf Registration Statement and use its reasonable best efforts
to cause the Shelf Registration Statement to be declared
effective.
(b) Continued Effectiveness. The Company shall use its
reasonable best efforts to keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus forming
a part thereof to be usable by holders until the earlier of (i)
the tenth (10th) anniversary of the effectiveness of such Shelf
Registration Statement or (ii) the date as of which (A) all the
Registrable Securities covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration
Statement (but in no event prior to the applicable period
referred to in Section 4(3) of the Securities Act and Rule 174
thereunder) or (B) the Investor is no longer entitled to Board
representation under the Investment Agreement and is permitted to
sell their Registrable Securities under Rule 144(k) under the
Securities Act (such period of effectiveness being the "Shelf
Period"). Subject to Section 2.1(c), below, the Company shall not
be deemed to have used its reasonable best efforts to keep the
Shelf Registration Statement effective during the Shelf Period if
the Company voluntarily takes any action or omits to take any
action that would result in holders of the Registrable Securities
covered thereby not being able to offer and sell any such
Registrable Securities during the Shelf Period, unless such
action or omission is required by applicable law.
(c) Delay in Filing; Suspension of Registration. If
the continued effectiveness of the Shelf Registration Statement
at any time would require the Company to make an Adverse
5
7
Disclosure, the Company may, upon giving prompt written notice of
such action to the holders, suspend use of the Shelf Registration
Statement (a "Shelf Suspension"); provided, however, that the
Company shall not be permitted to exercise a Shelf Suspension (i)
more than three times during any twenty-four (24) month period,
(ii) for a period exceeding forty (40) days on any one occasion,
or (iii) for an aggregate period exceeding one hundred twenty
(120) days in any twelve (12) month period with respect to more
than one Shelf Suspension. In the case of a Shelf Suspension, the
holders agree to suspend use of the Prospectus related to the
Shelf Registration in connection with any such sale or purchase
of or offer to sell or purchase Registrable Securities upon
receipt of the notice referred to above. The Company shall
immediately notify the holders upon the termination of any Shelf
Suspension, amend or supplement the Prospectus, if necessary, so
it does not contain any untrue statement or omission therein and
furnish to the holders such numbers of copies of the Prospectus
as so amended or supplemented as the holders may reasonably
request. The Company agrees, if necessary, to supplement or make
amendments to the Shelf Registration Statement, if required by
the registration form used by the Company for the Shelf
Registration or by the instructions applicable to such
registration form or by the Securities Act or the rules or
regulations promulgated thereunder or as may reasonably be
requested by the Holders of a majority of the Registrable
Securities then outstanding.
(d) Underwritten Offering. If not less than a majority
of the holders of any class of Registrable Securities included in
any offering pursuant to the Shelf Registration Statement so
elect, such offering of Registrable Securities pursuant to such
Shelf Registration Statement shall be in the form of an
Underwritten Offering and the Company shall amend or supplement
the Shelf Registration Statement, if appropriate. If any offering
pursuant to a Shelf Registration Statement involves an
Underwritten Offering, the holders of a majority of the
Registrable Securities included in such Shelf Registration shall,
after consulting with the Company, have the right to select the
managing underwriter or underwriters to administer the offering
subject to the right of the Company to select one co-managing
underwriter reasonably acceptable to such holders for any such
Underwritten Offering.
2.2. Demand Registrations.
--------------------
(a) Demand by Holders. If, on or at any time after the
Filing Date there is no currently effective Shelf Registration
Statement on file, then at any time thereafter the holders of not
less than 10% of any class of Registrable Securities may make a
written request to the Company for Registration of all of the
Registrable Securities held by such holders, provided that the
estimated market value of the Registrable Securities to be so
Registered is at least $10 million in the aggregate, or any part
of the Registrable Securities held by them, provided that the
estimated market value of the Registrable Securities to be so
Registered is at least $20 million in the aggregate. Any such
requested registration shall hereinafter be referred to as a
"Demand Registration." Each request for a Demand Registration
shall specify the kind and aggregate amount of Registrable
Securities to be registered and the intended methods of
disposition thereof. Upon such request for a Demand Registration,
the Company shall file a Registration Statement relating to such
Demand Registration (the "Demand Registration Statement"), and
shall use its reasonable best efforts promptly to cause to become
effective the Registration of such Registrable Securities (and
all other Registrable Securities which the Company has been
6
8
requested to register by any other holder pursuant to
Section 2.2(e) hereof) under (i) the Securities Act, and (ii) the
"Blue Sky" laws of such jurisdictions as any holder of
Registrable Securities being registered under such Registration
or any underwriter, if any, reasonably requests.
(b) Limitation on Demand Registrations. Subject to
clause (h) below, in no event shall the Company be required to
effect more than five (5) Demand Registrations.
(c) Demand Withdrawal. In the event that a Demand
Registration is requested under this Section and holders of
Registrable Securities later determine not to sell their
Registrable Securities in connection with the registration
requested, then prompt notice shall be given by such holders to
the Company that the registration requested is no longer required
and that the request is thereby withdrawn. Upon receipt of such
notice, the Company shall cease all efforts to secure
registration and shall take all action necessary and reasonably
practicable to prevent the commencement of effectiveness for any
registration statement that it is preparing or has prepared in
connection with the withdrawn request. Such registration shall be
deemed a Demand Registration for purposes of Section 2.2(b),
above, unless the withdrawing holders shall have paid or
reimbursed the Company for all of the reasonable out-of-pocket
fees and expenses incurred by the Company in connection with the
registration of such withdrawn Registrable Securities.
(d) Effective Registration. The Company shall be
deemed to have effected a Demand Registration if the Demand
Registration Statement is declared effective by the SEC and
remains effective for not less than 180 days (or such shorter
period as will terminate when all Registrable Securities covered
by such Demand Registration Statement have been sold or
withdrawn), or, if such Registration Statement relates to an
Underwritten Offering, such longer period as in the opinion of
counsel for the underwriter or underwriters a Prospectus is
required by law to be delivered in connection with sales of
Registrable Securities by an underwriter or dealer (in either
case, such period being the "Demand Period"). No Demand
Registration shall be deemed to have been effected if (i) during
the Demand Period such registration is interfered with by any
stop order, injunction or other order or requirement of the SEC
or other governmental agency or court or (ii) the conditions to
closing specified in the underwriting agreement, if any, entered
into in connection with such Registration are not satisfied by
reason of a wrongful act, misrepresentation or breach of an
applicable underwriting agreement by the Company.
(e) Demand Notice. Promptly upon receipt of any
request for a Demand Registration pursuant to paragraph (a) (but
in no event more than five (5) business days thereafter), the
Company shall serve written notice (a "Demand Notice") of any
such Registration request to all other holders of Registrable
Securities, and the Company shall include in such Registration
all such Registrable Securities of any holder with respect to
which the Company has received written requests for inclusion
therein within 30 days after the Demand Notice has been given to
it. Thereafter, the Company may elect to include in such
registration additional shares of Common Stock to be issued by
the Company. All requests made pursuant to this Section 2.2(e)
shall specify the kind and aggregate amount of Registrable
Securities to be registered and the intended method of
distribution of such securities.
7
9
(f) Delay in Filing; Suspension of Registration. If
the continued effectiveness of the Demand Registration Statement
at any time would require the Company to make an Adverse
Disclosure, the Company may, upon giving prompt written notice of
such action to the holders, suspend use of the Demand
Registration Statement (a "Demand Suspension"); provided,
however, that the Company shall not be permitted to exercise a
Demand Suspension (i) more than three times during any
twenty-four (24) month period, (ii) for a period exceeding forty
(40) days on any one occasion, or (iii) for an aggregate period
exceeding one hundred twenty (120) days in any twelve (12) month
period with respect to more than one Demand Suspension. In the
case of a Demand Suspension, the holders agree to suspend use of
the Prospectus related to the Demand Registration in connection
with any such sale or purchase or offer to sell or purchase of
Registrable Securities upon receipt of the notice referred to
above. The Company shall immediately notify the holders upon the
termination of any Demand Suspension, amend or supplement the
Prospectus, if necessary, so it does not contain any untrue
statement or omission therein and furnish to the holders such
numbers of copies of the Prospectus as so amended or supplemented
as the holders may reasonably request. The Company agrees, if
necessary, to supplement or make amendments to the Demand
Registration Statement, if required by the registration form used
by the Company for the Demand Registration or by the instructions
applicable to such registration form or by the Securities Act or
the rules or regulations promulgated thereunder or as may
reasonably be requested by the Holders of a majority of the
Registrable Securities then outstanding.
(g) Underwritten Offering. If not less than a majority
of the holders of any class of Registrable Securities requesting
a Demand Registration so elect, the offering of Registrable
Securities pursuant to such Demand Registration shall be in the
form of an Underwritten Offering. If any offering pursuant to a
Demand Registration involves an Underwritten Offering, the
holders of a majority of the Registrable Securities included in
such Demand Registration shall, after consulting with the
Company, have the right to select the managing underwriter or
underwriters to administer the offering subject to (i) the right
of the Company to select one co-managing underwriter reasonably
acceptable to such holders for any such Underwritten Offering and
(ii) with respect to any such Underwritten Offering in which the
Company includes securities with an estimated market value of at
least $20 million, any contractual obligation of the Company,
disclosed to the Investor prior to the date hereof, to select a
particular underwriter to manage such Underwritten Offering.
(h) Priority of Securities Registered Pursuant to
Demand Registrations. If the managing underwriter or underwriters
of a Demand Registration (or, in the case of a Demand
Registration not being underwritten, a majority of the holders of
any class of Registrable Securities sought to be registered
therein), advise the Company in writing (with a copy to each
selling holder of Registrable Securities) that, in its or their
opinion, the number of securities requested to be included in
such Demand Registration (including securities of the Company for
its own account or for the account of other Persons which are not
holders of Registrable Securities) exceeds the number which can
be sold in such offering without being likely to have a
significant adverse effect on the price, timing or distribution
of the securities offered or the market for the Company's Common
Stock, the Company will include in such Registration the
Registrable Securities sought to be registered therein and only
such lesser number of other
8
10
securities as shall, in the opinion of the managing underwriter
or underwriters (or, in the case of a Demand Registration not
being underwritten, holders of a majority of the Registrable
Securities sought to be registered therein) not be likely to have
such an effect. In the event that, despite the reduction of the
number of shares of Common Stock to be offered for the account of
the Company in such registration pursuant to the immediately
preceding sentence, the number of Registrable Securities to be
included in such Registration exceeds the number which, in the
opinion of the managing underwriter or underwriters (or, in the
case of a Demand Registration not being underwritten, holders of
a majority of the Registrable Securities sought to be registered
therein) can be sold without having the adverse effect referred
to above, the number of Registrable Securities of each class to
be included in such Demand Registration shall be allocated pro
rata among all requesting holders on the basis of the relative
number of shares of Registrable Securities of such class then
held by each such holder to the extent necessary to reduce the
total number of Registrable Securities to be included in such
offering to the number recommended by the managing underwriter,
underwriters or such holders, provided that any shares thereby
allocated to a holder that exceed such holder's request shall be
reallocated among the remaining requesting holders in like
manner. To the extent that Registrable Securities so requested to
be registered are excluded from the offering, then the holders of
such Registrable Securities shall have the right to one
additional Demand Registration under this Section 2.2.
(i) Registration Statement Form. Registrations under
this Section 2.2 shall be on such appropriate registration form
of the SEC (i) as shall be selected by the Company and as shall
be reasonably acceptable to the holders of a majority of the
Registrable Securities requesting a Demand Registration and (ii)
as shall permit the disposition of such Registrable Securities in
accordance with the intended method or methods of disposition
specified in such holders' requests for such Registration.
2.3. Piggyback Registrations.
-----------------------
(a) Participation. If the Company at any time proposes
to file a Registration Statement under the Securities Act with
respect to any offering of its securities for its own account or
for the account of any holders (other than (i) a Registration
under Section 2.1 or 2.2 hereof, (ii) a Registration on Form S-4
or S-8 or any successor form to such Forms, (iii) a Registration
of securities solely relating to an offering and sale to
employees or directors of the Company pursuant to any employee
stock plan or other employee benefit plan arrangement, or (iv) a
Registration of securities issued solely in an acquisition or
business combination) (a "Company Public Sale"), then, as soon as
practicable (but in no event less than thirty (30) Business Days
prior to the proposed date of filing such Registration
Statement), the Company shall give written notice of such
proposed filing to all holders of Registrable Securities that are
equity securities in the case of a Company Public Sale of equity
securities or Registrable Securities that are debt securities in
the case of a Company Public Sale of debt securities, and (unless
all such Registrable Securities are then registered pursuant to
Section 2.1 or a Shelf Registration Statement under Section 2.1
is in effect) such notice shall offer the holders of such
Registrable Securities the opportunity to register such number of
Registrable Securities as each such holder may request in writing
(a "Piggyback Registration"). Subject to Section 2.3(b), the
Company shall include in such Registration Statement all
Registrable Securities requested within
9
11
fifteen (15) Business Days after the receipt by the holder of any
such notice (which request shall specify the Registrable
Securities intended to be disposed of by such holder) to be
included in the Registration for such offering pursuant to a
Piggyback Registration; provided, however, that if at any time
after giving written notice of its intention to register any
securities and prior to the effective date of the Registration
Statement filed in connection with such Registration, the Company
shall determine for any reason not to register or to delay
registration of such securities, the Company may, at its
election, give written notice of such determination to each
holder of Registrable Securities and, thereupon, (i) in the case
of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection
with such Registration (but not from its obligation to pay the
Registration Expenses in connection therewith), without
prejudice, however, to the rights of any holders of Registrable
Securities entitled to request that such Registration be effected
as a Demand Registration under Section 2.2, and (ii) in the case
of a determination to delay registering and in the absence of a
request for a Demand Registration, shall be permitted to delay
registering any Registrable Securities, for the same period as
the delay in registering such other securities. If the offering
pursuant to such Registration Statement is to be underwritten,
then each holder making a request for a Piggyback Registration
pursuant to this Section 2.3(a) must participate in such
Underwritten Offering. If the offering pursuant to such
Registration Statement is to be on any other basis, then each
holder making a request for a Piggyback Registration pursuant to
this Section 2.3(a) must participate in such offering on such
basis. Each holder of Registrable Securities shall be permitted
to withdraw all or part of such holder's Registrable Securities
from a Piggyback Registration at any time prior to the effective
date thereof; provided, that the Company shall be entitled to
reimbursement from the holder of such withdrawn Registrable
Securities for any registration fees incurred by the Company in
connection with the registration of such Registrable Securities.
(b) Priority of Piggyback Registration. If the
managing underwriter or underwriters of any proposed Underwritten
Offering in a Piggyback Registration informs the Company and the
holders of such Registrable Securities in writing that the total
amount or kind of securities which such holders and any other
persons or entities intend to include in such offering exceeds
the number which can be sold in such offering so as to have a
significant adverse effect on the price, timing or distribution
of the securities offered in such offering or the market for the
Company's Common Stock, then the securities to be included in
such Registration shall be (i) first, 100% of the securities that
the Company or (subject to Section 2.7) any person exercising a
contractual right to demand Registration, as the case may be,
proposes to sell, and (ii) second, and only if all the securities
referenced in clause (i) have been included, the number of
Registrable Securities that, in the opinion of such underwriter
or underwriters, can be sold without having such adverse effect,
allocated pro rata among the holders which have requested
pursuant to Section 2.3(a) to be included in such Registration,
based on the fully diluted ownership of such holders (provided
that any Registrable Securities thereby allocated to any such
holder that exceed such holder's request will be reallocated
among the remaining requesting holders of Registrable Securities
in like manner) and (iii) third, and only if all of the
Registrable Securities referenced in clauses (i) and (ii) have
been included, any other securities eligible for inclusion in
such Registration.
10
12
(c) No Effect on Demand Registrations. No Registration
of Registrable Securities effected pursuant to a request under
this Section 2.3 shall be deemed to have been effected pursuant
to Sections 2.1 or 2.2 hereof or shall relieve the Company of its
obligations under Sections 2.1 or 2.2 hereof.
2.4. Black-out Periods for Holders. In the event of a
Company Public Sale or the offering and sale by the Company of
securities convertible into or exchangeable for any of its equity
securities, the holders of Registrable Securities agree, if
requested by the Company, and, in the case of an Underwritten
Offering, by the managing underwriter or underwriters in such
Underwritten Offering, not to effect any public sale or
distribution of any securities the same as or similar to those
being registered in connection with such Company Public Sale, or
any securities convertible into or exchangeable or exercisable
for such securities, during the period beginning 7 days before,
and ending 90 days (or such lesser period as may be permitted by
the Company or such managing underwriters) after, the effective
date of the Registration Statement filed in connection with such
registration, to the extent timely notified in writing by the
Company or the managing underwriter or underwriters (except, in
each case, as part of such registration, if permitted).
2.4.A Black-out Period for the Company and Others. In
the case of an Underwritten Offering, the Company agrees, if
requested by the holders of a majority of Registrable Securities
or the managing underwriters in such Underwritten Offering, not
to effect any public sale or distribution of any securities the
same as or similar to those being registered, or any securities
convertible into or exchangeable or exercisable for such
securities, during the period beginning 7 days before, and ending
90 days (or such lesser period as may be permitted by such
holders or such underwriter) after, the effective date of the
Registration Statement filed in connection with such registration
(or, in the case of an underwriting under the Shelf Registration,
the date of the closing under the underwriting agreement), to the
extent timely notified in writing by a holder of Registrable
Securities covered by such Registration Statement or the managing
underwriters (except, in each case, as part of such Underwritten
Offering, if permitted, or pursuant to registrations on Forms S-4
or S-8 or any successor form to such Forms or as part of any
registration of securities for offering and sale to management of
the Company pursuant to any employee stock plan or other employee
benefit plan arrangement or Registration of securities issued
solely in an acquisition or business combination). The Company
agrees to use all reasonable efforts to obtain from each holder
of restricted securities of the Company the same as or similar to
those being registered by the Company, or any restricted
securities convertible into or exchangeable or exercisable for
any of its securities, an agreement not to effect any public sale
or distribution of such securities (other than securities
purchased in a public offering) during any such period referred
to in this paragraph, except as part of any such Registration if
permitted. Without limiting the foregoing (but subject to Section
2.7), if after the date hereof the Company grants any Person
(other than a holder of Registrable Securities) any rights to
demand or participate in, a Registration, the Company agrees that
the agreement with respect thereto shall include such Person's
agreement as contemplated by the previous sentence.
11
13
2.5. Registration Procedures.
-----------------------
(a) In connection with the Company's registration
obligations under Sections 2.1, 2.2 and 2.3 hereof, the Company
will use its reasonable best efforts to effect such registration
to permit the sale of such Registrable Securities in accordance
with the intended method or methods of distribution thereof as
expeditiously as reasonably practicable, and pursuant thereto the
Company will as expeditiously as reasonably practicable:
(i) before filing a Registration Statement or
Prospectus, or any amendments or supplements thereto and in
connection therewith, (x) furnish to the underwriters, if any,
and to the holders of the Registrable Securities covered by such
Registration Statement, copies of all documents prepared to be
filed, which documents will be subject to the review of such
underwriters and such holders and their respective counsel and
(y) except in the case of a registration under Section 2.3, not
file any Registration Statement or Prospectus or amendments or
supplements thereto to which the holders of a majority of
Registrable Securities covered by such Registration Statement or
the underwriters, if any, shall reasonably object;
(ii) prepare and, in the case of a Demand
Registration, no later than 60 days after a request for a Demand
Registration, file with the SEC a Registration Statement relating
to the Registrable Securities including all exhibits and
financial statements required by the SEC to be filed therewith,
and use its reasonable best efforts to cause such Registration
Statement to become effective under the Securities Act; provided,
however, that the Company may discontinue any Registration of its
securities that are not Registrable Securities (and, under the
circumstances specified in 2.1(c) may delay or suspend, and,
under the circumstances specified in Section 2.3(a), may delay or
discontinue, Registration of Registrable Securities) at any time
prior to the effective date of the Registration Statement
relating thereto;
(iii) prepare and file with the SEC such amendments
and post-effective amendments to such Registration Statement and
supplements to the Prospectus as may be (x) reasonably requested
by the holders of a majority of the participating Registrable
Securities, (y) reasonably requested by any participating holder
(to the extent such request relates to information relating to
such holder), or (z) necessary to keep such Registration
effective for the Shelf Period (in the case of a Shelf
Registration) or the Demand Period (in the case of a Demand
Registration);
(iv) notify the selling holders of Registrable
Securities and the managing underwriter or underwriters, if any,
and (if requested) confirm such advice in writing, as soon as
reasonably practicable after notice thereof is received by the
Company (i) when the Registration Statement or any amendment
thereto has been filed or becomes effective, when the Prospectus
or any amendment or supplement to the Prospectus has been filed,
and, to furnish such selling holders and managing underwriter or
underwriters, if any, with copies thereof, (ii) of any written
comments by the SEC or any request by the SEC or any other
federal or state governmental authority for amendments or
supplements to the Registration Statement or the Prospectus or
for additional information, (iii) of the issuance by the SEC of
any stop order suspending the effectiveness of the Registration
Statement or any order preventing or suspending the use of any
12
14
preliminary or final Prospectus or the initiation or threatening
of any proceedings for such purposes, (iv) if, at any time, the
representations and warranties of the Company contemplated by
paragraph (xiv) below cease to be true and correct and in all
material respects (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification
of the Registrable Securities for offering or sale in any
jurisdiction or the initiation or threatening of any proceeding
for such purpose;
(v) promptly notify each selling holder of Registrable
Securities and the managing underwriter or underwriters, if any,
when the Company becomes aware of the happening of any event as a
result of which the Registration Statement or the Prospectus
included in such Registration Statement (as then in effect)
contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein
(in the case of the Prospectus and any preliminary Prospectus, in
light of the circumstances under which they were made) not
misleading or, if for any other reason it shall be necessary
during such time period to amend or supplement the Registration
Statement or the Prospectus in order to comply with the
Securities Act and, in either case as promptly as reasonably
practicable thereafter, prepare and file with the SEC, and
furnish without charge to the selling holders and the managing
underwriter or underwriters, if any, an amendment or supplement
to such Registration Statement or Prospectus which will correct
such statement or omission or effect such compliance;
(vi) make every reasonable effort to prevent or obtain
the withdrawal of any stop order or other order suspending the
use of any preliminary or final Prospectus or suspending any
qualification of the Registrable Securities at the earliest
possible moment;
(vii) if reasonably requested by the managing
underwriter or underwriters or a holder of Registrable Securities
being sold in connection with an Underwritten Offering, promptly
incorporate in a Prospectus supplement or post-effective
amendment such information as the managing underwriter or
underwriters and the holders of a majority of the Registrable
Securities being sold agree should be included therein relating
to the plan of distribution with respect to such Registrable
Securities, including, without limitation, information with
respect to the number of Registrable Securities being sold to,
and the purchase price being paid therefor by, such underwriter
or underwriters and with respect to any other terms of the
underwritten (or best efforts underwritten) offering of the
Registrable Securities to be sold in such offering; and make all
required filings of such Prospectus supplement or post-effective
amendment as soon as reasonably practicable after being notified
of the matters to be incorporated in such Prospectus supplement
or post-effective amendment;
(viii) furnish to each selling holder of Registrable
Securities and each managing underwriter, if any, without charge,
as many conformed copies as such holder or managing underwriter
may reasonably request of the Registration Statement and any
amendment or post-effective amendment thereto, including
financial statements and schedules, all documents incorporated
therein by reference and all exhibits (including those
incorporated by reference);
13
15
(ix) deliver to each selling holder of Registrable
Securities and each managing underwriter, if any, without charge,
as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such
holder or managing underwriter may reasonably request (it being
understood that the Company consents to the use of the Prospectus
or any amendment or supplement thereto by each of the selling
holders of Registrable Securities and the underwriters, if any,
in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or any amendment or
supplement thereto) and such other documents as such selling
holder or managing underwriter may reasonably request in order to
facilitate the disposition of the Registrable Securities by such
holder or underwriter;
(x) on or prior to the date on which the Registration
Statement is declared effective, use its reasonable best efforts
to register or qualify, and cooperate with the selling holders of
Registrable Securities, the managing underwriter, underwriters or
agent, if any, and their respective counsel in connection with
the registration or qualification of such Registrable Securities
for offer and sale under the securities or "Blue Sky" laws of
each state and other jurisdiction of the United States as any
such selling holder, underwriter or agent, if any, or their
respective counsel reasonably request in writing and do any and
all other acts or things reasonably necessary or advisable to
keep such registration or qualification in effect for so long as
such Registration Statement remains in effect and so as to permit
the continuance of sales and dealings in such jurisdictions for
as long as may be necessary to complete the distribution of the
Registrable Securities covered by the Registration Statement;
provided that the Company will not be required to qualify
generally to do business in any jurisdiction where it is not then
so qualified or to take any action which would subject it to
taxation or general service of process in any such jurisdiction
where it is not then so subject;
(xi) cooperate with the selling holders of Registrable
Securities and the managing underwriter, underwriters or agent,
if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and
not bearing any restrictive legends; and enable such Registrable
Securities to be in such denominations and registered in such
names as the managing underwriters may request at least two
business days prior to any sale of Registrable Securities to the
underwriters;
(xii) use its reasonable best efforts to cause the
Registrable Securities covered by the applicable 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 or
underwriters, if any, to consummate the disposition of such
Registrable Securities;
(xiii) not later than the effective date of the
applicable Registration Statement, provide a CUSIP number for all
Registrable Securities and provide the applicable transfer agent
with printed certificates for the Registrable Securities which
are in a form eligible for deposit with The Depository Trust
Company;
14
16
(xiv) make such representations and warranties to the
holders of Registrable Securities being registered, and the
underwriters or agents, if any, in form, substance and scope as
are customarily made by issuers in secondary underwritten public
offerings;
(xv) enter into such customary agreements (including
underwriting and indemnification agreements) and take all such
other actions as the holders of at least a majority of any
Registrable Securities being sold or the managing underwriter or
agent, if any, reasonably request in order to expedite or
facilitate the registration and disposition of such Registrable
Securities;
(xvi) obtain for delivery to the holders of
Registrable Securities being registered and to the underwriter,
underwriters or agent, if any, an opinion or opinions from
counsel for the Company dated the effective date of the
Registration Statement and, in the event of an Underwritten
Offering, brought down to the date of execution of the
underwriting agreement (if different from such effective date)
and to the closing under the underwriting agreement, in customary
form, scope and substance, which counsel and opinions shall be
reasonably satisfactory to such holders, underwriters or agents
and their respective counsel;
(xvii) obtain for delivery to the Company and the
underwriter, underwriters or agent, if any, with copies to the
holders of Registrable Securities (unless precluded by applicable
accounting rules), a cold comfort letter from the Company's
independent certified public accountants in customary form and
covering such matters of the type customarily covered by cold
comfort letters as the managing underwriter or underwriters
reasonably request, dated the date of execution of the
underwriting agreement and brought down to the closing under the
underwriting agreement;
(xviii) cooperate with each seller of Registrable
Securities and each underwriter or agent, if any, participating
in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be
made with the NASD;
(xix) use its reasonable best efforts to comply with
all applicable rules and regulations of the SEC and make
generally available to its security holders, as soon as
reasonably practicable (but not more than fifteen months) after
the effective date of the Registration Statement, an earnings
statement satisfying the provisions of Section 11(a) of the
Securities Act and the rules and regulations promulgated
thereunder;
(xx) provide and cause to be maintained a transfer
agent and registrar for all Registrable Securities covered by
such Registration Statement from and after a date not later than
the effective date of such Registration Statement;
(xxi) cause all Registrable Securities covered by the
Registration Statement to be listed on each securities exchange
on which any of the Company's securities are then listed or
quoted and on each inter-dealer quotation system on which any of
the Company's securities are then quoted;
15
17
(xxii) make available upon reasonable notice at
reasonable times and for reasonable periods for inspection by a
representative appointed by a majority of the sellers of such
Registrable Securities covered by such Registration Statement, by
any underwriter participating in any disposition to be effected
pursuant to such Registration Statement and by any attorney,
accountant or other agent retained by such sellers or any such
underwriter, all pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause all
of the Company's officers, directors and employees and the
independent public accountants who have certified its financial
statements to make themselves available to discuss the business
of the Company and to supply all information reasonably requested
by any such seller, underwriter, attorney, accountant or agent in
connection with such Registration Statement as shall be necessary
to enable them to exercise their due diligence responsibility
(subject to each party referred to in this clause (v) entering
into customary confidentiality agreements in a form reasonably
acceptable to the Company);
(xxiii) cause the senior executive officers of the
Company to participate in the customary "road show" presentations
that may be reasonably requested by the holders or the managing
underwriter in any Underwritten Offering and otherwise to
facilitate, cooperate with, and participate in each proposed
offering contemplated herein and customary selling efforts
related thereto; and
(xxiv) promptly, after the issuance of an earnings
release or upon the request of a holder, prepare a current report
on Form 8-K with respect to such earnings release or a matter of
disclosure as requested by such holder and file such Form 8-K
with the SEC.
(b) The Company may require each seller of Registrable
Securities as to which any registration is being effected to
furnish to the Company such information regarding the
distribution of such securities and such other information
relating to such holder and its ownership of Registrable
Securities as the Company may from time to time reasonably
request in writing. Each holder of Registrable Securities agrees
to furnish such information to the Company and to cooperate with
the Company as necessary to enable the Company to comply with the
provisions of this Agreement.
(c) Each holder of Registrable Securities agrees by
acquisition of such Registrable Securities that, upon receipt of
any notice from the Company of the happening of any event of the
kind described in Section 2.5(a)(v) hereof, such holder will
forthwith discontinue disposition of Registrable Securities
pursuant to such Registration Statement until such holder's
receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 2.5(a)(v) hereof, or until it is advised
in writing by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the
Prospectus, and, if so directed by the Company, such 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 Registrable
Securities current at the time of receipt of such notice. In the
event the Company shall give any such notice, the Demand Period
during which such Registration Statement is required to be
maintained effective shall be extended by the number of days
during the period from and including the date of the
16
18
giving of such notice to and including the date when each seller
of Registrable Securities covered by such Registration Statement
either receives the copies of the supplemented or amended
Prospectus contemplated by Section 2.5(a)(v) hereof or is advised
in writing by the Company that the use of the Prospectus may be
resumed.
(d) Holders may seek to register different types of
Registrable Securities and different classes of the same type of
Registrable Securities simultaneously and the Company shall use
its reasonable best efforts, to effect such registration and sale
in accordance with the intended method or methods of disposition
specified by such holders.
2.6. Underwritten Offerings.
----------------------
(a) Shelf and Demand Registrations. If requested by
the underwriters for any Underwritten Offering requested by
holders of Registrable Securities pursuant to a Registration
under Section 2.1 or under Section 2.2, the Company shall enter
into an underwriting agreement with such underwriters for such
offering, such agreement to be reasonably satisfactory in
substance and form to the Company, holders of a majority of the
Registrable Securities to be included in such underwriting, and
the underwriters, and to contain such representations and
warranties by the Company and such other terms as are generally
prevailing in agreements of that type, including, without
limitation, indemnities no less favorable to the recipient
thereof than those provided in Section 2.9. The holders of the
Registrable Securities proposed to be distributed by such
underwriters will cooperate with the Company in the negotiation
of the underwriting agreement and will give consideration to the
reasonable suggestions of the Company regarding the form thereof.
Such holders of Registrable Securities to be distributed by such
underwriters shall be parties to such underwriting agreement and
may, at their option, require that any or all of the
representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such
holders of Registrable Securities and that any or all of the
conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the
obligations of such holders of Registrable Securities. Any such
holder of Registrable Securities shall not be required to make
any representations or warranties to or agreements with the
Company or the underwriters other than representations,
warranties or agreements regarding such holder, such holder's
Registrable Securities, such holder's intended method of
distribution and any other representations required by law.
(b) Piggyback Registrations. If the Company proposes
to register any of its securities under the Securities Act as
contemplated by Section 2.3 and such securities are to be
distributed in an Underwritten Offering through one or more
underwriters, the Company will, if requested by any holder of
Registrable Securities pursuant to Section 2.3 and subject to the
provisions of Section 2.3(b), use its reasonable best efforts to
arrange for such underwriters to include on the same terms and
conditions that apply to the other sellers in such Registration
all the Registrable Securities to be offered and sold by such
holder among the securities of the Company to be distributed by
such underwriters in such Registration. The holders of
Registrable Securities to be distributed by such underwriters
shall be parties to the underwriting agreement between the
Company and such underwriters and any or all of the
representations and warranties
17
19
by, and the other agreements on the part of, the Company to and
for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and any
or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement shall be
conditions precedent to the obligations of such holders of
Registrable Securities. Any such holder of Registrable Securities
shall not be required to make any representations or warranties
to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such holder,
such holder's Registrable Securities and such holder's intended
method of distribution or any other representations required by
law.
(c) Participation in Underwritten Registrations. No
Person may participate in any Underwritten Offering hereunder
unless such Person (i) agrees to sell such Person's securities on
the basis provided in any underwriting arrangements approved by
the Persons entitled to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
2.7. No Inconsistent Agreements; Additional Rights.
The Company will not hereafter enter into, and except as
disclosed on Schedule 3.04(d) to the Investment Agreement, is not
currently a party to, any agreement with respect to its
securities which is inconsistent with the rights granted to the
holders of Registrable Securities by this Agreement or otherwise
conflicts with the provisions hereof.
2.8. Registration Expenses.
---------------------
(a) Expenses Paid by Company. All expenses incident to
the Company's performance of or compliance with this Agreement
will be paid by the Company (and, in the case of the filing of a
Registration Statement, regardless of whether such Registration
Statement becomes effective), including without limitation (i)
all registration and filing fees, and any other fees and expenses
associated with filings required to be made with the SEC or the
NASD (including, if applicable, the fees and expenses of any
"qualified independent underwriter" and its counsel as may be
required by the rules and regulations of the NASD), (ii) all fees
and expenses of compliance with state securities or "Blue Sky"
laws (including fees and disbursements of counsel in connection
with "Blue Sky" qualifications of the Registrable Securities and
determination of their eligibility for investment under the laws
of such jurisdictions as the managing underwriters or holders of
a majority of the Registrable Securities being sold may
designate), (iii) all printing, duplicating, word processing,
messenger, telephone, facsimile and delivery expenses (including
expenses of printing certificates for the Registrable Securities
in a form eligible for deposit with The Depository Trust Company
and of printing prospectuses), (iv) all fees and disbursements of
counsel for the Company and of all independent certified public
accountants of the Company (including the expenses of any special
audit and cold comfort letters required by or incident to such
performance), (v) Securities Act liability insurance or similar
insurance if the Company so desires or the underwriters so
require in accordance with then-customary underwriting practice,
(vi) all fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange
or quotation
18
20
of the Registrable Securities on any inter-dealer quotation
system, (vii) all applicable rating agency fees with respect to
the Preferred Stock, (viii) all reasonable fees and disbursements
of one law firm or other counsel selected by the holders of a
majority of the Registrable Securities being registered, (ix) all
fees and expenses of accountants to the holders of Registrable
Securities being sold, (x) any reasonable fees and disbursements
of underwriters customarily paid by issuers or sellers of
securities (except as set forth in Section 2.8(b) below), (xi)
all fees and expenses of any special experts retained by the
Company in connection with any Demand Registration or Piggyback
Registration and (xii) fees and expenses of other Persons
retained by the Company without limitation (all such expenses
being herein called "Registration Expenses"). The Company will,
in any event, pay its internal expenses (including, without
limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of
any audit and the fees and expenses of any Person, including
special experts, retained by the Company.
(b) Expenses Not Paid by Company. The Company shall
not be required to pay any fees and disbursements of underwriters
not customarily paid by the issuers or sellers of securities,
including underwriting discounts and commissions and transfer
taxes, if any, attributable to the sale of Registrable Securities
and the fees and expenses of counsel to the underwriters other
than as provided in paragraph (a) above.
2.9. Indemnification.
---------------
(a) Indemnification by Company. The Company agrees to
indemnify and hold harmless, to the full extent permitted by law,
each holder of Registrable Securities, its Affiliates and their
respective officers, directors, shareholders, employees,
advisors, and agents and each Person who controls (within the
meaning of the Securities Act or the Exchange Act) such Persons
(collectively, the "Indemnified Parties") from and against any
and all losses, claims, damages, liabilities (or actions or
proceedings in respect thereof, whether or not such Indemnified
Party is a party thereto) and expenses, joint or several
(including reasonable costs of investigation and legal expenses)
(each, a "Loss" and collectively "Losses") arising out of or
based upon (i) any untrue or alleged untrue statement of a
material fact contained in any Registration Statement under which
such Registrable Securities were registered under the Securities
Act (including any final, preliminary or summary Prospectus
contained therein or any amendment thereof or supplement thereto
or any documents incorporated by reference therein), or (ii) any
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein (in the case of a Prospectus or preliminary Prospectus,
in light of the circumstances under which they were made) not
misleading; provided, however, that the Company shall not be
liable to any particular Indemnified Party in any such case to
the extent that any such Loss arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
19
21
omission made in any such Registration Statement in
reliance upon and in conformity with written information
furnished to the Company by any holder of Registrable Securities
or any underwriter (other than any underwriter selected by the
Company) expressly for use in the preparation thereof; and
provided, further, that the Company will not be liable to any
Indemnified Party in any case to the extent that any such Loss
arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in any
final, preliminary or summary Prospectus if such untrue statement
or alleged untrue statement or omission or alleged omission is
completely corrected in an amendment or supplement to such
Prospectus and the relevant holder of Registrable Securities
(having previously been furnished by or on behalf of the Company
with a sufficient number of copies of the same), fails to deliver
such Prospectus as so amended or supplement prior to or
concurrently with the sales of the Registrable Securities to the
Person asserting such loss, claim, damage, liability or expense.
This indemnity shall be in addition to any liability the Company
may otherwise have. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of
such holder or any Indemnified Party and shall survive the
transfer of such securities by such holder. The Company will also
indemnify underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the
distribution, their officers and directors and each Person who
controls such Persons (within the meaning of the Securities Act
and the Exchange Act) to the same extent as provided above with
respect to the indemnification of the Indemnified Persons, if
requested.
(b) Indemnification by the Selling Holder of
Registrable Securities. In the event of Registration of any
securities of the Company under the Securities Act pursuant to
Sections 2.1, 2.2 or 2.3 hereof, each selling holder of
Registrable Securities agrees (severally and not jointly) to
indemnify and hold harmless, to the full extent permitted by law,
the Company, its directors and officers and each Person who
controls the Company (within the meaning of the Securities Act
and the Exchange Act) from and against any Losses resulting from
any untrue statement of a material fact or any omission of a
material fact required to be stated in the Registration Statement
under which such Registrable Securities were registered under the
Securities Act (including any final, preliminary or summary
Prospectus contained therein or any amendment thereof or
supplement thereto or any documents incorporated by reference
therein), or necessary to make the statements therein (in the
case of a Prospectus or preliminary Prospectus, in light of the
circumstances under which they were made) not misleading, to the
extent, but only to the extent, that such untrue statement or
omission is contained in any information furnished in writing by
such selling holder to the Company specifically for inclusion in
such Registration Statement and has not been corrected in a
subsequent writing prior to or concurrently with the sale of the
Registrable Securities to the Person asserting such loss, claim,
damage, liability or expense. In no event shall the liability of
any selling holder of Registrable Securities hereunder be greater
in amount than the dollar amount of the proceeds received by such
holder under the sale of the Registrable Securities giving rise
to such indemnification obligation. The Company shall be entitled
to receive indemnities from underwriters, selling brokers, dealer
managers and similar securities industry professionals
participating in the distribution, to the same extent as provided
above (with appropriate modification) with respect to information
so furnished in writing by such Persons specifically for
inclusion in any Prospectus or Registration Statement. Each
Holder also shall indemnify any underwriters of the Registrable
Securities, their officers and directors and each person who
controls such underwriters (within the meaning of the Securities
Act) to the same extent as provided above with respect to the
indemnification of the Company.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any
20
22
claim with respect to which it seeks indemnification (provided,
that any delay or failure to so notify the indemnifying party
shall relieve the indemnifying party of its obligations hereunder
only to the extent, if at all, that it is actually and materially
prejudiced by reason of such delay or failure) and (ii) permit
such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party;
provided, however, that any Person entitled to indemnification
hereunder shall have the right to select and employ separate
counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of such
Person unless (i) the indemnifying party has agreed in writing to
pay such fees or expenses, (ii) the indemnifying party shall have
failed to assume the defense of such claim within a reasonable
time after receipt of notice of such claim from the Person
entitled to indemnification hereunder and employ counsel
reasonably satisfactory to such Person, (iii) the indemnified
party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified
parties that are different from or in addition to those available
to the indemnifying party, or (iv) in the reasonable judgment of
any such Person, based upon advice of its counsel, a conflict of
interest may exist between such Person and the indemnifying party
with respect to such claims (in which case, if the Person
notifies the indemnifying party in writing that such Person
elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the
right to assume the defense of such claim on behalf of such
Person). If such defense is not assumed by the indemnifying
party, the indemnifying party will not be subject to any
liability for any settlement made without its consent, but such
consent may not be unreasonably withheld; provided, that an
indemnifying party shall not be required to consent to any
settlement involving the imposition of equitable remedies or
involving the imposition of any material obligations on such
indemnifying party other than financial obligations for which
such indemnified party will be indemnified hereunder. If the
indemnifying party assumes the defense, the indemnifying party
shall have the right to settle such action without the consent of
the indemnified party; provided, however, that the indemnifying
party shall be required to obtain such consent (which consent
shall not be unreasonably withheld) if the settlement includes
any admission of wrongdoing on the part of the indemnified party
or any decree or restriction on the indemnified party or its
officers or directors. No indemnifying party shall consent to
entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of an
unconditional release from all liability in respect to such claim
or litigation or which would impose any material obligations on
such indemnified party. It is understood that the indemnifying
party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the
reasonable fees, disbursements and other charges of more than one
separate firm admitted to practice in such jurisdiction at any
one time from all such indemnified party or parties unless (x)
the employment of more than one counsel has been authorized in
writing by the indemnified party or parties, (y) an indemnified
party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it that are different
from or in addition to those available to the other indemnified
parties or (z) a conflict or potential conflict exists or may
exist (based on advice of counsel to an indemnified party)
between such indemnified party and the other indemnified parties,
in each of which cases the indemnifying party shall be obligated
to pay the reasonable fees and expenses of such additional
counsel or counsels.
21
23
(d) Contribution. If for any reason the
indemnification provided for in the paragraphs (a) and (b) of
this Section 2.9 is unavailable to an indemnified party or
insufficient to hold it harmless as contemplated by paragraphs
(a) and (b) of this Section 2.9, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified
party as a result of such Loss in such proportion as is
appropriate to reflect the relative fault of the indemnifying
party on the one hand and the indemnified party on the other. The
relative fault 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 indemnifying
party or the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. Notwithstanding
anything in this Section 2.9(d) to the contrary, no indemnifying
party (other than the Company) shall be required pursuant to this
Section 2.9(d) to contribute any amount in excess of the amount
by which the net proceeds received by such indemnifying party
from the sale of Registrable Securities in the offering to which
the Losses of the indemnified parties relate exceeds the amount
of any damages which such indemnifying party has otherwise been
required to pay by reason of such untrue statement or omission.
The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 2.9(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 the immediately preceding paragraph. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
If indemnification is available under this Section 2.9, the
indemnifying parties shall indemnify each indemnified party to
the full extent provided in Sections 2.9(a) and 2.9(b) hereof
without regard to the relative fault of said indemnifying parties
or indemnified party.
(e) Indemnification Payments. The indemnification
required by this Section 2.9 shall be made by periodic payments
of the amount thereof during the course of the investigation or
defense, promptly as and when bills are received or Losses are
incurred.
2.10. Rules 144 and 144A. The Company covenants that
it will file the reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder (or, if the Company is not required
to file such reports, it will, upon the request of any holder of
Registrable Securities after the Transfer Date, make publicly
available other information so long as necessary to permit sales
pursuant to Rules 144, 144A or Regulation S under the Securities
Act), and it will take such further action as any holder of
Registrable Securities may reasonably request, all to the extent
required from time to time to enable such holder to sell
Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (i) Rules
144, 144A or Regulation S under the Securities Act, as such Rules
may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of any
holder of Registrable Securities, the Company will deliver to
such holder a written statement as to whether it has complied
with such requirements and, if not, the specifics thereof.
22
24
SECTION 3. MISCELLANEOUS.
-------------
3.1. Term. This Agreement shall terminate upon the
expiration of the Shelf Period, except for the provisions of
Section 2.9, which shall survive any such termination.
3.2. Injunctive Relief. It is hereby agreed and
acknowledged that it will be impossible to measure in money the
damages that would be suffered if the parties fail to comply with
any of the obligations herein imposed on them and that in the
event of any such failure, an aggrieved Person will be
irreparably damaged and will not have an adequate remedy at law.
Any such Person shall, therefore, be entitled (in addition to any
other remedy to which it may be entitled in law or in equity) to
injunctive relief, including, without limitation, specific
performance, to enforce such obligations, and if any action
should be brought in equity to enforce any of the provisions of
this Agreement, none of the parties hereto shall raise the
defense that there is an adequate remedy at law.
3.3. Attorneys' Fees. In any action or proceeding
brought to enforce any provision of this Agreement or where any
provision hereof is validly asserted as a defense, the successful
party shall, to the extent permitted by applicable law, be
entitled to recover reasonable attorneys' fees in addition to any
other available remedy.
3.4. Notices. All notices, other communications or
documents provided for or permitted to be given hereunder, shall
be made in writing and shall be given either personally by
hand-delivery, by facsimile transmission, by mailing the same in
a sealed envelope, registered first-class mail, postage prepaid,
return receipt requested, or by air courier guaranteeing
overnight delivery:
(a) if to the Company:
Oxford Health Plans, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention:
with copies to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Esq.
(b) if to the Investor:
TPG Oxford LLC
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx
with copies to:
23
25
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxx, Esq.
Each holder, by written notice given to the Company in
accordance with this Section 3.4 may change the address to which
notices, other communications or documents are to be sent to such
holder. All notices, other communications or documents shall be
deemed to have been duly given: (i) at the time delivered by
hand, if personally delivered; (ii) when receipt is acknowledged
in writing by addressee, if by facsimile transmission; (iii) five
business days after being deposited in the mail, postage prepaid,
if mailed by first class mail; and (iv) on the first business day
with respect to which a reputable air courier guarantees
delivery; provided, however, that notices of a change of address
shall be effective only upon receipt.
3.5. Successors, Assigns and Transferees. (a) The
registration rights of any holder under this Agreement with
respect to any Registrable Securities may be transferred and
assigned, provided that, other than an assignment to the
Investor, an Affiliate of the Investor, a Designated Purchaser or
an Affiliate of a Designated Purchaser, no such assignment shall
be binding upon or obligate the Company to any such assignee
unless and until (i) the Company shall have received notice of
such assignment as herein provided, which notice shall (A)
reference this Agreement and (B) set forth the name and address
of any assignee for the purpose of any notices hereunder or (ii)
such assignee can establish its beneficial or record ownership of
any Registrable Securities and shall have provided the Company
with the information called for by clause (i)(B) of this Section
3.5(a) and (iii) such assignee acquires Registrable Securities
with an estimated market value of $10 million or more. Any
transfer or assignment made other than as provided in the first
sentence of this Section 3.5 shall be null and void.
(b) This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, and their respective
successors and permitted assigns. Whether or not any express
assignment shall have been made, the provisions of this Agreement
which are for the benefit of the parties hereto other than the
Company shall also be for the benefit of and enforceable by any
subsequent holder of Registrable Securities, subject to the
provisions contained herein.
3.6. Governing Law; Service of Process; Consent to
Jurisdiction. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WITHIN THE
STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
(b) To the fullest extent permitted by applicable law,
each party hereto (i) agrees that any claim, action or proceeding
by such party seeking any relief whatsoever arising out of, or in
connection with, this Agreement or the transactions contemplated
hereby shall be brought only in the United States District Court
for the Southern District of New York and in any New York State
court located in the Borough of Manhattan and not in any other
State or Federal
24
26
court in the United States of America or any court in any other
country, (ii) agrees to submit to the exclusive jurisdiction of
such courts located in the State of New York for purposes of all
legal proceedings arising out of, or in connection with, this
Agreement or the transactions contemplated hereby, and (iii)
irrevocably waives any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in
such a court has been brought in an inconvenient forum.
3.7. Headings. The section and paragraph headings
contained in this Agreement are for reference purposes only and
shall not in any way affect the meaning or interpretation of this
Agreement.
3.8. Severability. Whenever possible, each provision
or portion of any provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law
but if any provision or portion of any provision of this
Agreement is held to be invalid, illegal or unenforceable in any
respect under any applicable law in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any
other provision or portion of any provision in such jurisdiction,
and this agreement will be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained
therein.
3.9. Amendment; Waiver.
-----------------
(a) This Agreement may not be amended or modified and
waivers and consents to departures from the provisions hereof may
not be given, except by an instrument or instruments in writing
making specific reference to this Agreement and signed by the
Company, the holders of a majority of Registrable Securities of
each class then outstanding and, so long as it is a holder, the
Investor. Each holder of any Registrable Securities at the time
or thereafter outstanding shall be bound by any amendment,
modification, waiver or consent authorized by this Section
3.9(a), whether or not such Registrable Securities shall have
been marked accordingly.
(b) The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as
a further or continuing waiver of such breach or as a waiver of
any other or subsequent breach. Except as otherwise expressly
provided herein, no failure on the part of any party to exercise,
and no delay in exercising, any right, power or remedy hereunder,
or otherwise available in respect hereof at law or in equity,
shall operate as a waiver thereof, nor shall any single or
partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of
any other right, power or remedy.
3.10. Counterparts. This Agreement may be executed in
any number of separate 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 together shall
constitute one and the same agreement.
25
27
3.11. Effectiveness. The provisions of this Agreement
shall take effect upon the occurrence of the Closing (as such
term is defined in the Investment Agreement) without further
action by or on behalf of any party hereto, and other than this
Section 3.11 shall have no force or effect prior to the Closing.
This Agreement shall terminate and be of no further force and
effect upon the termination of the Investment Agreement.
26
28
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be duly executed as of the date first written
above.
OXFORD HEALTH PLANS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Title: President and Chief
Executive Officer
TPG OXFORD LLC
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------
Title: President
