Exhibit 4.10
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
by and among
INTEK INFORMATION, INC.
THE BEACON GROUP III - FOCUS VALUE FUND, L.P.
SQUAM LAKE INVESTORS II, X.X.
XXXX & COMPANY, INC.
CONNING INSURANCE CAPITAL LIMITED PARTNERSHIP V
U.S. INFORMATION TECHNOLOGY FINANCING, L.P.
ENCOMPASS GROUP, INC.
TRANS COSMOS USA, INC.
BVCF IV, L.P.
XXXXXXX X'XXXXXXX
XXXX XXXXXX
XXXXX XXXXXXXX
and
THE OTHER PARTIES HERETO
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (the "Agreement")
dated as of January 14, 2000 by and among INTEK INFORMATION, INC., a Delaware
corporation (the "Company"), THE BEACON GROUP III- FOCUS VALUE FUND, L.P., a
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Delaware limited partnership ("Beacon"), SQUAM LAKE INVESTORS II, L.P., a
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Delaware limited partnership ("SLI"), BAIN& COMPANY, INC., a Massachusetts
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corporation ("Bain"), CONNING INSURANCE CAPITAL LIMITED PARTNERSHIP V, a
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Delaware limited partnership ("Conning"), U.S. INFORMATION TECHNOLOGY FINANCING,
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L.P., a Washington corporation ("USITF"), ENCOMPASS GROUP, INC., a Washington
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corporation ("Encompass"), TRANS COSMOS USA, INC., a Washington corporation
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("TCI"), BVCF IV, L.P., a Delaware limited partnership ("Xxxxxxx), XXXXXXX X.
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X'XXXXXXX ("X'Xxxxxxx"), XXXX XXXXXX ("Fields"), XXXXX XXXXXXXX ("Xxxxxxxx") and
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the stockholders of the Company listed on the Schedule of Investors hereto, each
of whom was a party to one of the Original Registration Rights Agreements (as
defined below), (collectively, the "Investors").
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W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company, Resource, Beacon, SLI, Bain, Conning, USITF,
Encompass, TCI, Xxxxxxx, X'Xxxxxxx, Fields and Xxxxxxxx (collectively, the
"Amending Stockholders") are each parties to one of Original Registration Rights
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Agreements; and
WHEREAS, the Amending Shareholders, who hold the requisite percentages of
Registrable Securities (as defined below) necessary to amend the respective
Original Registration Rights Agreement to which each of them was a party, and
the Company desire to amend and restate the Original Registration Rights
Agreements in their entireties into a single agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations hereinafter set forth, the parties hereto hereby agree
as follows:
1. Certain Definitions.
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As used in this Agreement, the following terms shall have the meanings
ascribed to them below:
"Acorn Registration Rights Agreement" means that certain Registration
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Rights Agreement made as of October 30, 1999 by and among the Company, the
former shareholders of Acorn Information Systems, Inc. ("Acorn Holders") and
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Prospero LLC, a Connecticut limited liability company ("Prospero"), as amended
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by that certain Amendment No. 1 to Registration Rights Agreement made as of
November 19, 1999.
"Affiliate" means (i) with respect to any Person, any other Person directly
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or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person, (ii) with respect to any natural Person,
shall also mean the spouse, sibling, child, step-child, grandchild, niece,
nephew or parent of such Person, or the spouse thereof; (iii) the estate of
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a Shareholder or Affiliate, (iv) any trust created for the benefit of a
Shareholder or by a Shareholder for an Affiliate of such Shareholder specified
in clause (ii), and (v) with respect to any Person, any general partner or
limited partner of such Person.
"Common Stock" means the common stock, $.0001 par value per share, of the
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Company and any equity securities of the Company issued or issuable with respect
to the Common Stock in connection with a reclassification, recapitalization,
stock combination, stock dividend, merger, consolidation or other
reorganization.
"Common Stock Equivalents" means securities convertible into, exchangeable
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or exercisable for, shares of Common Stock.
"Conversion Shares" means the shares of Common Stock or other equity
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securities issued or issuable upon conversion of Preferred Stock.
"Holder" or "Holders" means any Investor who holds Registrable Securities
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and any holder of Registrable Securities to whom the registration rights
conferred by this Agreement have been transferred in compliance with Section
4.1.
"IPO" means the initial underwritten offering pursuant to which the Common
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Stock becomes registered under Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
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"Major Holder" means with respect to any registration the Holder that,
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together with its Affiliates, includes the largest number of Registrable
Securities in such registration.
"Original Registration Rights Agreement(s)" mean (i) that certain
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Registration Rights Agreement made as of February 3, 1999, by and between the
Company and Beacon, as amended by (a) that certain Amendment No. 1 to
Registration Rights Agreement made as of December 22, 1997, (b) that certain
Amendment No. 2 to Registration Rights Agreement made as of May 7, 1998, (c)
that certain Amendment No. 3 to Registration Rights Agreement made as of Xxxxx
00, 0000, (x) that certain Amendment No. 4 to Registration Rights Agreement made
as of October 30, 1999, and (e) that certain Amendment No. 5 to Registration
Rights Agreement made as of November 19, 1999; (ii) that certain Amended and
Restated Registration Rights Agreement made as of February 3, 1997, by and among
the Company, Resource and X'Xxxxxxx, as amended by (a) that certain Amendment
No. 1 to Amended and Restated Registration Rights Agreement made as of May 7,
1998, (b) that certain Amendment No. 2 to Amended and Restated Registration
Rights Agreement made as of April 16, 1999, (c) that certain Amendment No. 3 to
Amended and Restated Registration Rights Agreement made as of October 1, 1996,
(d) that certain Amendment No. 4 to Amended and Restated Registration Rights
Agreement made as of October 30, 1999, and (e) that certain Amendment No. 5 to
Amended and Restated Registration Rights Agreement made as of November 19, 1999;
(iii) that certain Registration Rights Agreement made as of February 3, 1997, by
and among the Company, Richards, Fields, Bain, SLI and certain other persons
named therein, as amended by (a) that certain Amendment No. 1 to Registration
Rights Agreement made as of May 7, 1998, (b) that certain Amendment No. 2 to
Registration Rights Agreement made as of April 16, 1999, (c) that certain
Amendment No. 3 to
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Registration Rights Agreement as of October 30, 1999, and (d) that certain
Amendment No. 4 to Registration Rights Agreement made as of November 19, 1999;
(iv) that certain Registration Rights Agreement made as of May 7, 1998, by and
between the Company and Conning, as amended by (a) that certain Amendment No. 1
to Registration Rights Agreement made as of Xxxxx 00, 0000, (x) that certain
Amendment No. 2 to Registration Rights Agreement made as of October 30, 1999,
and (c) that certain Amendment No. 3 to Registration Rights Agreement made as of
November 19, 1999; (v) that certain Registration Rights Agreement by and among
the Company, USITF, Encompass, TCI and certain other parties thereto, as amended
by (a) that certain Amendment No. 1 to Registration Rights Agreement made as of
October 30, 1999, and (b) that certain Amendment No. 2 to Registration Rights
Agreement made as of November 19, 1999; and (vi) that certain Registration
Rights Agreement made as of November 19, 1999 by and among the Company, Xxxxxxx
and certain other parties thereto.
"Person" means any individual, corporation, limited liability company,
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limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivisions thereof.
"Preferred Stock" means the Preferred Stock, $.001 par value per share, of
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the Company.
"Protocall Shareholder(s)" means Xxxx Steurt, Xxxx X. Xxxxxx, Xxxxx X.
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Fields, Xxxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxx, Xxxxxx X. Xxxxx and Xxxxx Xxxxxx.
"Purchase Agreement(s)" mean (i) that certain Securities Purchase Agreement
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made as of August 2, 1996, by and between the Company and Resource; (ii) that
certain Preferred Stock Purchase Agreement made as of February 3, 1997, by and
among the Company, Beacon, SLI and Bain; (iii) that certain Purchase Agreement
made as of December 22, 1997 by and between the Company and Beacon; (iv) that
certain Series D Preferred Stock Purchase Agreement made as of May 7, 1998 by
and among the Company, Beacon, Conning and certain other signatories thereto, as
amended by (a) that certain Amendment No. 1 to Series D Preferred Stock Purchase
Agreement made as of May 7, 1998, and (b) that certain Amendment No. 2 to Series
D Preferred Stock Purchase Agreement made as of September 1, 1998; (v) that
certain Exchange Agreement made as of May 7, 19998 by and between the Company
and Beacon; (vi) that certain Series E Preferred Stock Purchase Agreement made
as of April 16, 1999, by and among the Company, USTIF, Encompass, TCI and
certain other signatories thereto; and (vii) that certain Series F Preferred
Stock Purchase Agreement made as of November 19, 1999 by and among the Company,
Xxxxxxx and certain other signatories thereto.
"Registrable Securities" means any (i) Conversion Shares owned by the
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Investors, (ii) shares of Common Stock acquired by any Person after the date
hereof pursuant to rights granted to the Investors under the Purchase Agreements
or the Shareholders' Agreement, (iii) Conversion Shares acquired by any Person
after the date hereof pursuant to rights granted to the Investors under the
Purchase Agreements or the Shareholders' Agreement and (iv) shares of Common
Stock issued or issuable, directly or indirectly, with respect to the Common
Stock referenced in clauses (ii) and (iii) above or any Preferred Stock or
Conversion Shares owned by the Investors, whether acquired on the date hereof or
hereafter acquired by way of stock dividend, stock split or combination of
shares; provided, however, that with respect to
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X'Xxxxxxx, Registrable Securities means (i) 764,416 shares of Common Stock or
(ii), starting one year after X'Xxxxxxx is not substantially a full-time
employee of the Company and is also not a director of the Company, 1,528,832
shares of Common Stock. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when (i) a registration
statement with respect to the sale of such securities shall have been declared
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (ii) such securities shall
have been sold (other than in a privately negotiated sale) pursuant to Rule 144
(or any successor provision) under the Securities Act, or (iii) such securities
shall have been sold in a private transaction in which the transferor's rights
under this Agreement are not assigned.
"Requisite Amount of Outstanding Holders" means the Holders of Registrable
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Securities holding an aggregate of at least 92,500 Conversion Shares (as
adjusted for any reclassification, recapitalization, stock combination, stock
dividend, merger, consolidation or other reorganization).
"Requisite Percentage of Participating Holders" means Holders of
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Registrable Securities participating in the registration who, assuming
conversion of all then outstanding Preferred Stock into Conversion Shares, would
hold a majority of the total Conversion Shares that would then be held by all
Holders participating in the registration.
"SEC" means the Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended.
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"Shareholders' Agreement" means that certain Amended and Restated
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Shareholders' and Voting Agreement made as of November 19, 1999, by and among
the Company, Resource, Beacon, SLI, Bain, Conning, USITF, Encompass, TCI,
O'Crowley, Fields, Xxxxxxxx and certain other equity holders of the Company.
2. Registration Rights.
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2.1. Demand Registrations.
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(a) Request for Registration. Subject to Section 2.1(d), at any time and
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from time to time after twelve months after an IPO, one or more Holders of
Registrable Securities (other than X'Xxxxxxx, SLI, Bain, Fields and the
Protocall Shareholders) representing the Requisite Amount of Outstanding Holders
shall have the right to require the Company to file a registration statement
under the Securities Act covering all or any part of their respective
Registrable Securities, by delivering a written request therefor to the Company
specifying the number of Registrable Securities to be included in such
registration by such Holder(s) and the intended method of distribution thereof.
All such requests pursuant to this Section 2.1(a) are referred to herein as
"Demand Registration Requests," and the registrations so requested are referred
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to herein as "Demand Registrations" (with respect to any Demand Registration,
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the Holder(s) making such demand for registration being referred to as the
"Initiating Holder(s)"). As promptly as practicable, but no later than 15 days
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after receipt of a Demand Registration
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Request, the Company shall give written notice (the "Demand Exercise Notice")
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of such Demand Registration Request to all Holders of record of Registrable
Securities.
(b) Registration of Other Securities. Subject to Section 2.1(e), the
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Company shall include in a Demand Registration (i) the Registrable Securities of
the Initiating Holder and (ii) the Registrable Securities of any other Holder
that shall have made a written request to the Company for inclusion thereof in
such registration (which request shall specify the maximum number of Registrable
Securities intended to be disposed of by such Holder(s)) within 30 days after
the receipt of the Demand Exercise Notice and may include securities of the
Company to be sold for its own account; provided, however, that, if the Company
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includes any shares to be sold for its own account in such registration, such
registration shall not count as a Demand Registration.
(c) Registration. The Company shall, as expeditiously as possible
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following a Demand Registration Request, use its best efforts to (i) effect such
registration under the Securities Act of the Registrable Securities that the
Company has been so requested to register, for distribution in accordance with
such intended method of distribution, and (ii) if requested by the Initiating
Holder or Major Holder, obtain acceleration of the effective date of the
registration statement relating to such registration.
(d) Limitations on Requested Registrations. The rights of Holders of
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Registrable Securities to request Demand Registrations pursuant to Section
2.1(a) are subject to the following limitations: (i) the Company shall not be
obligated to cause a Demand Registration to become effective within six months
after the effective date of any other registration of securities (other than
pursuant to a registration on Form S-8 or any successor or similar form that is
then in effect), (ii) (except as set forth below) in no event shall the Company
be required to effect, in the aggregate, without regard to the Holder of
Registrable Securities making such request, more than three Demand Registrations
(it being agreed that any Demand Registration that does not become effective
shall not count toward the foregoing limitation unless at the request of the
Requisite Percentage of Participating Holders such Demand Registration has been
withdrawn after the relevant registration statement has been filed but prior to
it becoming effective); provided however, that if Xxxxxxx has not been among the
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Initiating Holders requesting any of the three Demand Registrations; the Company
shall be required to effect one additional Demand Registration at the request of
Xxxxxxx, and (iii) the Company shall not be obligated to effect a Demand
Registration having an aggregate anticipated offering price of less than
$5,000,000 unless such offering shall cover all remaining Registrable
Securities. Notwithstanding any other provision of this Section 2.1(d), any
Holder participating in a Demand Registration who is unable to register all of
the Registrable Securities that such Holder sought to register because of the
"cutback" provision set forth in the proviso in Section 2.1(e) shall be entitled
to an additional Demand Registration solely with respect to such Holder's shares
of Registrable Securities not registered because of the proviso in Section
2.1(e), and such additional Demand Registration shall not count toward the three
Demand Registrations contemplated in clause (ii) of the foregoing sentence.
(e) Cutbacks. If the managing underwriter of any underwritten offering
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shall advise the Holders participating in a Demand Registration that the
Registrable Securities covered
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by the registration statement cannot be sold in such offering within a price
range acceptable to the Requisite Percentage of Participating Holders, then the
Holders representing the Requisite Percentage of Participating Holders shall
have the right to notify the Company in writing that they have determined that
the registration statement be abandoned or withdrawn, in which event the Company
shall abandon or withdraw such registration statement. If the managing
underwriter of any underwritten offering shall advise the Company in writing
that, in its opinion, the number of securities requested to be included in a
Demand Registration exceeds the number that can be sold in such offering within
a price range acceptable to the Requisite Percentage of Participating Holders,
the Company will include in such registration, to the extent of the number that
the Company is so advised can be sold in such offering, Registrable Securities
requested to be included in such registration, first, pro rata among the Holders
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requesting such registration in accordance with the number of Registrable
Securities held by and issuable upon conversion of Common Stock Equivalents to
each such Holder, and, second, securities to be sold for the account of the
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Company; provided, however, that if, pursuant to Section 2.2, any of X'Xxxxxxx,
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SLI, Bain, Fields and the Protocall Shareholders exercise "piggy-back" rights in
connection with a Demand Registration that is governed by the general provisions
of this sentence, then the Company will include in such registration, to the
extent of the number that the Company is so advised can be sold in such
offering, Registrable Securities requested to be included in such registration,
pro rata among the Holders participating in such offering in accordance with the
number of Registrable Securities held by and issuable upon conversion of such
Common Stock Equivalents to each such Holder.
(f) Selection of Underwriters. The managing underwriter or underwriters of
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each underwritten offering of the Registrable Securities so to be registered
shall be selected by the Requisite Percentage of Participating Holders (and
shall be reasonably acceptable to the Company).
(g) Postponement; Suspension. The Company shall be entitled to postpone or
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suspend for a reasonable period of time (but not to exceed, in the aggregate, 90
days in any 365 day period) the filing or effectiveness of any registration
statement required to be prepared and filed by it pursuant to this Section 2.1
if, (i) the postponement or suspension is necessary due to circumstances that
would require disclosure that would materially and adversely affect a material
acquisition, divestiture or financial transaction of the Company, (ii) such
postponement or suspension is necessary to prepare financial statements of an
acquired company required to be included in such registration statement pursuant
to the requirements of Regulation S-X of the SEC or (iii) in the good faith
judgment of the Board of Directors of the Company, such registration would be
seriously detrimental to the Company and the Company furnishes to the
participating Holders a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors of the Company
it would be seriously detrimental to the Company for such registration statement
to be filed in the near future and that it is, therefore, essential to defer the
filing of such registration statement. The Company shall give the participating
Holders prompt written notice of its determination to postpone or suspend the
filing of any registration statement, and an approximation of the anticipated
delay. If the Company shall so postpone or suspend the filing of a registration
statement, the participating Holders representing the Requisite Percentage of
Participating Holders shall have the right to withdraw the request for
registration by giving written notice to the Company within 20 days after
receipt
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of the notice of postponement or suspension (as the case may be) and, in the
event of such withdrawal, such request shall not be counted toward the number of
Requested Registrations (including for purposes of paragraph (d) of this Section
2.1).
2.2. Piggyback Registrations.
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(a) Piggyback Registrations. If, at any time, the Company proposes or
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is required to register any of its equity securities under the Securities Act
(other than pursuant to registrations on such form or similar form(s) solely for
registration of securities in connection with an employee benefit plan or
dividend reinvestment plan or a merger, consolidation or acquisition) on a
registration statement on Form S-1, Form S-2 or Form S-3 (or an equivalent
general registration form then in effect), whether or not for its own account,
the Company shall give prompt written notice of its intention to do so to each
of the Holders of record of Registrable Securities. Upon the written request of
any Holder, made within 15 days following the receipt of any such written notice
(which request shall specify the maximum number of Registrable Securities
intended to be disposed of by such Holder and the intended method of
distribution thereof), the Company shall use its best efforts to cause all such
Registrable Securities, the Holders of which have so requested the registration
thereof, to be registered under the Securities Act (with the securities that the
Company at the time proposes to register) to permit the sale or other
disposition by the Holders (in accordance with the intended method of
distribution thereof) of the Registrable Securities to be so registered. There
is no limitation on the number of such piggyback registrations pursuant to the
preceding sentence that the Company is obligated to effect. No registration
effected under this Section 2.2(a) shall relieve the Company of its obligations
to effect Demand Registrations.
(b) Abandonment or Delay. If, at any time after giving written
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notice of its intention to register any equity 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 equity securities, the Company may, at its election,
give written notice of such determination to all Holders of record of
Registrable Securities and (i) in the case of a determination not to register,
shall be relieved of its obligation to register any Registrable Securities in
connection with such abandoned registration, without prejudice, however, to the
rights of Holders under Section 2.1, and (ii) in the case of a determination to
delay such registration of its equity securities, shall be permitted to delay
the registration of such Registrable Securities for the same period as the delay
in registering such other equity securities.
(c) Holder's Right to Withdraw. Any Holder shall have the right to
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withdraw its request for inclusion of its Registrable Securities in any
registration statement pursuant to this Section 2.2 by giving written notice to
the Company of its request to withdraw; provided, however, that (i) such request
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must be made in writing prior to the earlier of the execution of the
underwriting agreement or the execution of the custody agreement with respect
to such registration and (ii) such withdrawal shall be irrevocable and, after
making such withdrawal, a Holder shall no longer have any right to include
Registrable Securities in the registration as to which such withdrawal was made.
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(d) Cutbacks. If the managing underwriter of any underwritten
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offering shall inform the Company by letter of its belief that the number of
Registrable Securities requested to be included in a registration under this
Section 2.2 would materially adversely affect such offering, then the Company
will include in such registration, first, the securities proposed by the Company
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to be sold for its own account and, second, the Registrable Securities and all
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other securities of the Company to be included in such registration to the
extent of the number and type, if any, that the Company is so advised can be
sold in (or during the time of) such offering, first, pro rata among the Holders
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of Registrable Securities in accordance with the number of shares of Registrable
Securities held by and issuable upon conversion of Common Stock Equivalents to
each such Holder, and second, pro rata among the holders of any other securities
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of the Company with respect to which the holders thereof are entitled to and
desire "piggy-back" or similar registration rights.
Notwithstanding anything to the contrary herein, pursuant to Section 2.1.5
of the Acorn Registration Rights Agreement, if the managing underwriter of any
underwritten demand offering under the Acorn Registration Rights Agreement
limits the number of Registrable Securities to be sold under such registration,
the Registrable Securities held by the Acorn Holders shall be included first,
and after all such Registrable Securities of the Acorn Holders are included, the
Other Registrable Securities (as defined in the Acorn Registration Rights
Agreement) shall be included on a pro rata basis among such holders
participating in such offering.
2.3. S-3 Registrations. If at any time (i) one or more Holders of
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Registrable Securities representing the Requisite Amount of Outstanding Holders
request that the Company file a registration statement on Form S-3 or any
successor thereto for a public offering of all or any portion of the shares of
Registrable Securities held by such Holder or Holders, the reasonably
anticipated aggregate price to the public of which would exceed $2,500,000, and
(ii) the Company is a registrant entitled to use Form S-3 or any successor
thereto to register such shares, then the Company shall use its best efforts to
register under the Securities Act on Form S-3 or any successor thereto, for
public sale in accordance with the method of disposition specified in such
notice, the number of shares of Registrable Securities specified in such notice.
Whenever the Company is required by this Section 2.3 to use its best efforts to
effect the registration of Registrable Securities, each of the procedures and
requirements of Section 2.1 (including but not limited to the requirement that
the Company notify all Holders of Registrable Securities from whom notice has
not been received and provide them with the opportunity to participate in the
offering) shall apply to such registration. Notwithstanding anything to the
contrary contained herein, no request may be made under this Section 2.3 within
six months (or three months for purposes of clause (ii) below for all periods
through December 31, 2001) after the effective date of a registration statement
filed by the Company (i) covering a firm commitment underwritten public offering
in which the holders of Registrable Securities shall have been entitled to join
pursuant to Sections 2.1 and 2.2 or (ii) pursuant to this Section 2.3, in each
case in which there shall have been effectively registered all shares of
Registrable Securities as to which registration shall have been requested.
There is no limitation on the number of registrations pursuant to this Section
2.3 that the Company is obligated to effect.
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2.4. Registration Procedures. If and whenever the Company is required by
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the provisions of this Agreement to use its best efforts to effect or cause the
registration of any Registrable Securities under the Securities Act as provided
in this Agreement, the Company shall, as expeditiously as possible:
(a) prepare and file with the SEC a registration statement on an
appropriate registration form of the SEC for the disposition of such Registrable
Securities in accordance with the intended method of disposition thereof, which
form (i) shall be selected by the Company and (ii) shall, in the case of a shelf
registration, be available for the sale of the Registrable Securities by the
selling Holders thereof and such registration statement shall comply as to form
in all material respects with the requirements of the applicable form and
include all financial statements required by the SEC to be filed therewith, and
the Company shall use its best efforts to cause such registration statement to
become effective (provided, however, that before filing a registration statement
or prospectus or any amendments or supplements thereto, or comparable statements
under securities or blue sky laws of any jurisdiction, the Company will furnish
to one counsel for the Holders participating in the planned offering (selected
by the Major Holder) and the underwriters, if any, copies of all such documents
proposed to be filed (including all exhibits thereto), which documents will be
subject to the reasonable review and, in the case of a registration pursuant to
Section 2.1 or Section 2.3, reasonable comment of such counsel, and the Company
shall not file any registration statement or amendment thereto or any prospectus
or supplement thereto pursuant to Sections 2.1 or 2.3 to which the holders of a
majority of the Registrable Securities covered by such registration statement or
the underwriters, if any, shall reasonably object in writing);
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective for such period
(which shall not be required to exceed 90 days in the case of a registration
pursuant to Section 2.1, 2.2 or 2.3) as any seller of Registrable Securities
pursuant to such registration statement shall request and to comply with the
provisions of the Securities Act with respect to the sale or other disposition
of all Registrable Securities covered by such registration statement in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement;
(c) furnish, without charge, to each seller of such Registrable
Securities and each underwriter, if any, of the securities covered by such
registration statement such number of copies of such registration statement,
each amendment and supplement thereto (in each case including all exhibits), and
the prospectus included in such registration statement (including each
preliminary prospectus) in conformity with the requirements of the Securities
Act, and other documents, as such seller and underwriter may reasonably request
in order to facilitate the public sale or other disposition of the Registrable
Securities owned by such seller (the Company hereby consenting to the use in
accordance with applicable law of each such registration statement (or amendment
or post-effective amendment thereto) and each such prospectus (or preliminary
prospectus or supplement thereto) by each such seller of Registrable Securities
and the underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such registration statement or prospectus);
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(d) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under such other securities or
"blue sky" laws of such jurisdictions as any sellers of Registrable Securities
or any managing underwriter, if any, shall reasonably request in writing, and do
any and all other acts and things that may be reasonably necessary or advisable
to enable such sellers or underwriter, if any, to consummate the disposition of
the Registrable Securities in such jurisdictions, except that in no event shall
the Company be required to qualify to do business as a foreign corporation in
any jurisdiction where it would not, but for the requirements of this paragraph
(d), be required to be so qualified, to subject itself to taxation in any such
jurisdiction or to consent to general service of process in any such
jurisdiction;
(e) promptly notify each Holder selling Registrable Securities covered by
such registration statement and each managing underwriter, if any: (i) when the
registration statement, any pre-effective amendment, the prospectus or any
prospectus supplement related thereto or post-effective amendment to the
registration statement has been filed and, with respect to the registration
statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the SEC or state securities authority for amendments or
supplements to the registration statement or the prospectus related thereto or
for additional information; (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement or the initiation of
any proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose; (v) of the
existence of any fact of which the Company becomes aware that results in the
registration statement, the prospectus related thereto or any document
incorporated therein by reference containing an untrue statement of a material
fact or omitting to state a material fact required to be stated therein or
necessary to make any statement therein not misleading; and (vi) if at any time
the representations and warranties contemplated by Section 3 below cease to be
true and correct in all material respects; and, if the notification relates to
an event described in clause (v), the Company shall promptly prepare and furnish
to each such seller and each underwriter, if any, a reasonable number of copies
of a prospectus supplemented or amended so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein in the light of
the circumstances under which they were made not misleading;
(f) comply with all applicable rules and regulations of the SEC, and make
generally available to its security holders, as soon as reasonably practicable
after the effective date of the registration statement (and in any event within
16 months thereafter), an earnings statement (which need not be audited)
covering the period of at least twelve consecutive months beginning with the
first day of the Company's first calendar quarter after the effective date of
the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(g) (i) use its best efforts to cause all such Registrable Securities
covered by such registration statement to be listed on the principal securities
exchange on which similar securities issued by the Company are then listed (if
any), if the listing of such Registrable
10
Securities is then permitted under the rules of such exchange, or (ii) if no
similar securities are then so listed, use its best efforts to either cause all
such Registrable Securities to be listed on a national securities exchange or to
secure designation of all such Registrable Securities as a National Association
of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") "national
--------
market system security" within the meaning of Rule 11Aa2-1 of the SEC or,
failing that, secure NASDAQ authorization for such shares and, without limiting
the generality of the foregoing, take all actions that may be required by the
Company as the issuer of such Registrable Securities in order to facilitate the
managing underwriter's arranging for the registration of at least two market
makers as such with respect to such shares with the National Association of
Securities Dealers, Inc. (the "NASD");
----
(h) provide and cause to be maintained a transfer agent and registrar for
all such Registrable Securities covered by such registration statement not later
than the effective date of such registration statement;
(i) enter into such customary agreements (including, if applicable, an
underwriting agreement) and take such other actions as the Holders of a majority
of the Registrable Securities or the Major Holder participating in such offering
shall reasonably request in order to expedite or facilitate the disposition of
such Registrable Securities;
(j) obtain an opinion from the Company's counsel and a "cold comfort"
letter from the Company's independent public accountants in customary form and
covering such matters as are customarily covered by such opinions and "cold
comfort" letters delivered to underwriters in underwritten public offerings,
which opinion and letter shall be reasonably satisfactory to the underwriters,
if any, and to the Major Holder participating in such offering, and furnish to
each Holder participating in the offering and to each underwriter, if any, a
copy of such opinion and letter addressed to such Holder (in the case of the
opinion) and underwriter (in the case of the opinion and the "cold comfort"
letter);
(k) deliver promptly to the Major Holder and counsel for the selling
Holders participating in the offering and each underwriter, if any, copies of
all correspondence between the Commission and the Company, its counsel or
auditors and any memoranda relating to discussions with the Commission or its
staff with respect to the registration statement, other than those portions of
any such memoranda that contain information subject to attorney-client privilege
with respect to the Company, and, upon receipt of such confidentiality
agreements as the Company may reasonably request, make reasonably available for
inspection by any seller of such Registrable Securities covered by such
registration statement, by any underwriter, if any, participating in any
disposition to be effected pursuant to such registration statement and by any
attorney, accountant or other agent retained by any such seller 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 to supply all information reasonably requested
by any such seller, underwriter, attorney, accountant or agent in connection
with such registration statement;
(l) use its best efforts to promptly obtain the withdrawal of any order
suspending the effectiveness of the registration statement;
11
(m) provide a CUSIP number for all Registrable Securities, not later than
the effective date of the registration statement;
(n) make reasonably available its employees and personnel and otherwise
provide reasonable assistance to the underwriters (taking into account the needs
of the Company's businesses and the requirements of the marketing process) in
the marketing of Registrable Securities in any underwritten offering;
(o) promptly prior to the filing of any document that is to be
incorporated by reference into the registration statement or the prospectus
(after the initial filing of such registration statement) provide copies of such
document to counsel for the selling holders of Registrable Securities and to
each managing underwriter, if any, and make the Company's representatives
reasonably available for discussion of such document and make such changes in
such document concerning the selling holders prior to the filing thereof as
counsel for such selling holders or underwriters may reasonably request;
(p) furnish to each Holder participating in the offering, upon such
Holder's written request, and the managing underwriter, without charge, at least
one signed copy of the registration statement and any post-effective amendments
thereto (which may be facsimiles thereof in the case of the Holders), including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(q) cooperate with the selling Holders of Registrable Securities and the
managing underwriter, if any, to facilitate the timely preparation and delivery
of certificates not bearing any restrictive legends representing the Registrable
Securities to be sold, and cause such Registrable Securities to be issued in
such denominations and registered in such names in accordance with the
underwriting agreement prior to any sale of Registrable Securities to the
underwriters or, if not an underwritten offering, in accordance with the
instructions of the selling holders of Registrable Securities at least three
business days prior to any sale of Registrable Securities; and
(r) take all such other commercially reasonable actions as are necessary
or advisable in order to expedite or facilitate the disposition of such
Registrable Securities.
The Company may require as a condition precedent to the Company's
obligations under this Section 2.4 that each seller of Registrable Securities as
to which any registration is being effected furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request provided that such information shall be
used only in connection with such registration.
Each Holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described in
clause (v) of paragraph (e) of this Section 2.4, such Holder will discontinue
such Holder's disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by paragraph
(e) of this Section 2.4 and, if so directed by the Company, will deliver to the
Company
12
(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 that was in effect at the time of receipt of such notice. In the
event the Company shall give any such notice, the applicable period mentioned in
paragraph (b) of this Section 2.4 shall be extended by the number of days during
such period from and including the date of the giving of such notice to and
including the date when each seller of any Registrable Securities covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by paragraph (e) of this Section 2.4.
If any such registration statement or comparable statement under
"blue sky" laws refers to any Holder by name or otherwise as the Holder of any
securities of the Company, then such Holder shall have the right to require (i)
the insertion therein of language, in form and substance satisfactory to such
Holder and the Company, to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event that such reference
to such Holder by name or otherwise is not in the judgment of the Company, as
advised by counsel, required by the Securities Act or any similar federal
statute or any state "blue sky" or securities law then in force, the deletion of
the reference to such Holder.
2.5. Registration Expenses.
---------------------
(a) "Expenses" shall mean any and all fees and expenses incident to
the Company's performance of or compliance with this Article 2, including,
without limitation: (i) SEC, stock exchange or NASD registration, listing and
filing fees and all listing fees and fees with respect to the inclusion of
securities in NASDAQ, (ii) fees and expenses of compliance with state securities
or "blue sky" laws and in connection with the preparation of a "blue sky"
survey, including without limitation, reasonable fees and expenses of blue sky
counsel, (iii) printing and copying expenses, (iv) messenger and delivery
expenses, (v) expenses incurred in connection with any road show, (vi) fees and
disbursements of counsel for the Company, (vii) with respect to each
registration, the reasonable fees and disbursements of one counsel for the
selling Holder(s) (selected by the Major Holder), (viii) fees and disbursements
of all independent public accountants (including the expenses of any audit
and/or "cold comfort" letter) and fees and expenses of other persons, including
special experts, retained by the Company, (ix) fees and expenses payable to a
Qualified Independent Underwriter (as defined in NASD Conduct Rule 2720(b)(15)),
(x) fee s and expenses payable to the underwriters referred to in Section 2.1(f)
and (xi) any other fees and disbursements of underwriters, if any, customarily
paid by issuers or sellers of securities (collectively, "Expenses").
--------
(b) The Company shall pay all Expenses with respect to any Demand
Registration whether or not it becomes effective or remains effective for the
period contemplated by Section 2.4(b) and with respect to up to two
registrations effected under Sections 2.2 or 2.3. Notwithstanding the
foregoing, if, with respect to a Demand Registration or a registration under
Section 2.3, at the request of the Requisite Percentage of Participating Holders
such registration has been withdrawn after the relevant registration statement
has been filed but prior to its
13
becoming effective, then the Company, on the one hand, and the Holders
participating in such registration, on the other hand, shall each bear one-half
of the Expenses incurred by the Company in connection with such registration,
and any Expenses to be borne hereunder by such Holders shall be borne by them
pro rata in accordance with the number of shares of Registrable Securities that,
with respect to each such Holder, were included in such registration.
(c) Notwithstanding the foregoing, (x) the provisions of this Section
2.5 shall be deemed amended to the extent necessary to cause these expense
provisions to comply with "blue sky" laws of each state in which the offering is
made and (y) in connection with any registration hereunder, each Holder of
Registrable Securities being registered shall pay all underwriting discounts and
commissions and any transfer taxes, if any, attributable to the sale of such
Registrable Securities, pro rata with respect to payments of discounts and
--------
commissions in accordance with the number of shares sold in the offering by such
Holder, and (z) the Company shall, in the case of all registrations under this
Article 2, be responsible for all its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties).
2.6. Certain Limitations on Registration Rights.
------------------------------------------
(a) In the case of any registration under Section 2.1 pursuant to an
underwritten offering, or in the case of a registration under Sections 2.2 or
2.3 if the Company has determined to enter into an underwriting agreement in
connection therewith, all securities to be included in such registration shall
be subject to an underwriting agreement and no Person may participate in such
registration unless such Person agrees to sell such Person's securities on the
basis provided therein and completes and executes all reasonable questionnaires
and other documents (including custody agreements and powers of attorney) that
must be executed in connection therewith, and provides such other information to
the Company or the underwriter as may be necessary to register such Person's
securities.
(b) No Holder shall have any right to demand or participate in a
registration under this Section 2 if such Holder (i) may sell all its
Registrable Securities under Rule 144(k) or successor provision under the
Securities Act, or (ii) may sell all its Registrable Securities in a five (5)
month period (such period commencing on the date of the notice under Section
2.1(a), 2.2(a) or 2.3 as the case may be) under Rule 144 under the Securities
Act.
2.7 Limitations on Sale or Distribution of Other Securities.
-------------------------------------------------------
(a) To the extent requested in writing by a managing underwriter, if
any, of any registration effected pursuant to Section 2.1, each Holder of
Registrable Securities agrees not to sell, transfer or otherwise dispose of,
including any sale pursuant to Rule 144 under the Securities Act, any Common
Stock, or any other equity security of the Company or any security convertible
into or exchangeable or exercisable for any equity security of the Company
(other than as part of such underwritten public offering) during the time period
reasonably requested by the managing underwriter, not to exceed 180 days (and
the Company hereby also so agrees (except that the Company may effect any sale
or distribution of any such securities pursuant to a registration on Form S-4
(if reasonably acceptable to such managing underwriter) or Form S-8,
14
or any successor or similar form that is then in effect or upon the conversion,
exchange or exercise of any then outstanding Common Stock Equivalent) to use its
reasonable best efforts to cause each holder of any equity security or any
security convertible into or exchangeable or exercisable for any equity security
of the Company purchased from the Company at any time other than in a public
offering so to agree). Each managing underwriter shall be entitled to rely on
the agreements of each Holder of Registrable Securities set forth in this
Section 2.7(a) and shall be a third party beneficiary of the provisions of this
Section 2.7(a).
(b) The Company hereby agrees that, if it shall previously have
received a request for registration pursuant to Section 2.1, and if such
previous registration shall not have been withdrawn or abandoned, the Company
shall not sell, transfer, or otherwise dispose of, any Common Stock, or any
other equity security of the Company or any security convertible into or
exchangeable or exercisable for any equity security of the Company (other than
as part of a private sale pursuant to a transaction for which Form S-4 would be
used if such sale were registered, an underwritten public offering pursuant to
such request for registration pursuant to Section 2.2 or 2.3, a registration on
Form S-4 or Form S-8 or any successor or similar form that is then in effect,
upon the conversion, exchange or exercise of any then outstanding Common Stock
Equivalent or in connection with the issuance or exercise of options pursuant to
a stock option plan or pursuant to an employee stock purchase plan), for a
period of 100 days commencing on the date 10 days prior to the effective date of
such previous registration, and the Company shall so provide in any registration
rights agreements hereafter entered into with respect to any of its securities.
2.8. No Required Sale. Nothing in this Agreement shall be deemed to
----------------
create an independent obligation on the part of any Holder to sell any
Registrable Securities pursuant to any effective registration statement.
2.9. Indemnification.
---------------
(a) In the event of any registration of any securities of the
Company under the Securities Act pursuant to this Article 2, the Company will,
and hereby does, indemnify and hold harmless, to the fullest extent permitted by
law, each Holder of Registrable Securities, its directors, officers, Affiliates,
employees, stockholders, members and partners (and the directors, officers,
Affiliates, employees, stockholders, members and partners thereof), each other
Person who participates as an underwriter or a Qualified Independent
Underwriter, if any, in the offering or sale of such securities, each officer,
director, employee, stockholder, member or partner of such underwriter or
Qualified Independent Underwriter, and each other Person, if any, who controls
such seller or any such underwriter within the meaning of the Securities Act,
against any and all losses, claims, damages or liabilities, joint or several,
actions or proceedings (whether commenced or threatened) in respect thereof
("Claims") and expenses (including reasonable fees of counsel and any amounts
--------
paid in any settlement effected with the Company's consent, which consent shall
not be unreasonably withheld or delayed) to which each such indemnified party
may become subject under the Securities Act or otherwise, insofar as such Claims
or expenses arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any registration statement
under which such securities were registered under the Securities Act, together
with the documents incorporated by therein or the omission or alleged
15
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus or any amendment or supplement thereto,
together with the documents incorporated by reference therein, or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading or (iii) any
violation or alleged violation by the Company of any federal, state or common
law, rule or regulation applicable to the Company and relating to action
required of or inaction by the Company in connection with any such registration;
provided, however, that the Company shall not be liable to any such indemnified
-------- -------
party in any such case to the extent such Claim or expense arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact
or omission or alleged omission of a material fact made in such registration
statement or amendment thereof or supplement thereto or in any such prospectus
or any preliminary, final or summary prospectus in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such indemnified party specifically for use therein. Such indemnity and
reimbursement of expenses shall remain in full force and effect regardless of
any investigation made by or on behalf of such indemnified party and shall
survive the transfer of such securities by such seller.
(b) Each Holder of Registrable Securities that are included in the
securities as to which any registration under Section 2.1, 2.2 or 2.3 is being
effected (and, if the Company requires as a condition to including any
Registrable Securities in any registration statement filed in accordance with
Section 2.1, 2.2 or 2.3, any underwriter and Qualified Independent Underwriter,
if any) shall, severally and not jointly, indemnify and hold harmless (in the
same manner and to the same extent as set forth in paragraph (a) of this Section
2.9) to the fullest extent permitted by law, on an after-tax basis, the Company,
its officers, directors, Affiliates, employees and stockholders, members and
partners (and the directors, officers, Affiliates, employees, stockholders,
members and partners thereof), each Person controlling the Company within the
meaning of the Securities Act and all other prospective sellers and their
directors, officers, general and limited partners and respective controlling
Persons with respect to any untrue statement or alleged untrue statement of any
material fact in, or omission or alleged omission of any material fact from,
such registration statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company or its
representatives by or on behalf of such Holder or underwriter or Qualified
Independent Underwriter, if any, specifically for use therein and reimburse such
indemnified party for any legal or other expenses reasonably incurred in
connection with investigating or defending any such Claim as such expenses are
incurred; provided, however, that the aggregate amount that any such Holder
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shall be required to pay pursuant to this Section 2.9(b) and Sections 2.9(c) and
(e) shall in no case be greater than the amount of the net proceeds received by
such person upon the sale of the Registrable Securities pursuant to the
registration statement giving rise to such claim. Such indemnity and
reimbursement of expenses shall remain in full force and effect regardless of
any investigation made by or on behalf of such indemnified party and shall
survive the transfer of such securities by such Holder.
16
(c) Indemnification similar to that specified in the preceding
paragraphs (a) and (b) of this Section 2.9 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of securities under
any state securities and "blue sky" laws.
(d) Any person entitled to indemnification under this Agreement
shall notify promptly the indemnifying party in writing of the commencement of
any action or proceeding with respect to which a claim for indemnification may
be made pursuant to this Section 2.9, but the failure of any indemnified party
to provide such notice shall not relieve the indemnifying party of its
obligations under the preceding paragraphs of this Section 2.9, except to the
extent the indemnifying party is materially prejudiced thereby and shall not
relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Article 2. In case any action or
proceeding is brought against an indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, unless in the reasonable opinion of outside
counsel to the indemnified party a conflict of interest between such indemnified
and indemnifying parties may exist in respect of such claim, to assume the
defense thereof jointly with any other indemnifying party similarly notified, to
the extent that it chooses, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party that it so chooses, the indemnifying party shall not be liable
to such indemnified party for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that (i) if the
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indemnifying party fails to take reasonable steps necessary to defend diligently
the action or proceeding within 20 days after receiving notice from such
indemnified party that the indemnified party believes it has failed to do so; or
(ii) if such indemnified party who is a defendant in any action or proceeding
that is also brought against the indemnifying party reasonably shall have
concluded that there may be one or more legal defenses available to such
indemnified party that are not available to the indemnifying party; or (iii) if
representation of both parties by the same counsel is otherwise inappropriate
under applicable standards of professional conduct, then, in any such case, the
indemnified party shall have the right to assume or continue its own defense as
set forth above (but with no more than one firm of counsel for all indemnified
parties in each jurisdiction who shall be reasonably approved by the Major
Holder of the registration in respect of which such indemnification is sought),
and the indemnifying party shall be liable for any expenses therefor. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(e) If for any reason the foregoing indemnity is unavailable or is
insufficient to hold harmless an indemnified party under Sections 2.9(a), (b) or
(c), then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of any Claim in such proportion as is
appropriate to reflect the relative fault of the indemnifying party,
17
on the one hand, and the indemnified party, on the other hand, with respect to
such offering of securities. 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. If,
however, the allocation provided in the second preceding sentence is not
permitted by applicable law, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative faults but also the relative
benefits of the indemnifying party and the indemnified party as well as any
other relevant equitable considerations. The parties hereto agree that it would
not be just and equitable if contributions pursuant to this Section 2.9(e) were
to be determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in the
preceding sentences of this Section 2.9(e). The amount paid or payable in
respect of any Claim shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such Claim. 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. Notwithstanding anything in this Section 2.9(e) to the
contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 2.9(e) to contribute any amount in excess of the net
proceeds received by such indemnifying party from the sale of Registrable
Securities in the offering to which the losses, claims, damages or liabilities
of the indemnified parties relate, less the amount of any indemnification
payment made by such indemnifying party pursuant to Sections 2.9(b) and (c).
(f) The indemnity agreements contained herein shall be in addition
to any other rights to indemnification or contribution that any indemnified
party may have pursuant to law or contract and shall remain operative and in
full force and effect regardless of any investigation made or omitted by or on
behalf of any indemnified party and shall survive the transfer of the
Registrable Securities by any such party.
(g) The indemnification and contribution required by this Section
2.9 shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, as and when bills are received or expense,
loss, damage or liability is incurred.
3. Underwritten Offerings.
----------------------
3.1. Requested Underwritten Offerings. If requested by the underwriters
--------------------------------
for any underwritten offering by the Holders pursuant to a registration
requested under Section 2.1 or 2.3, the Company shall enter into a customary
underwriting agreement with the underwriters. Such underwriting agreement shall
be satisfactory in form and substance to the Major Holder and shall contain such
representations and warranties by, and such other agreements on the part of, the
Company and such other terms as are generally included in the standard
underwriting agreement of such underwriters, including, without limitation,
indemnities and contribution agreements. Any Holder participating in the
offering shall be a party to such underwriting agreement and may, at its option,
require that any or all of the representations and warranties by,
18
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 Holder 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 Holder. Such underwriting agreement shall also contain such
representations and warranties by the participating Holders as are customary in
agreements of that type.
3.2. Piggyback Underwritten Offerings. In the case of a registration
--------------------------------
pursuant to Section 2.2 hereof, if the Company shall have determined to enter
into an underwriting agreement in connection therewith, all of the Holders'
Registrable Securities to be included in such registration shall be subject to
such underwriting agreement. Any Holder participating in such registration may,
at its 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 Holder 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 Holder. Such underwriting agreement shall also contain such
representations and warranties by the participating Holders as are customary in
agreements of that type.
4. General.
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4.1 Limitations on Transfer.
--- -----------------------
(a) Restrictions on Transfer. Each Investor agrees not to make any
------------------------
disposition of all or any portion of the Registrable Securities unless (i) there
is then in effect a registration statement under the Securities Act covering
such proposed disposition and such disposition is made in accordance with such
registration statement or (ii) such Registrable Securities may be disposed of
without registration under the Securities Act and, if reasonably requested by
the Company, such Investor shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company, that such disposition will not
require registration of such shares under the Securities Act. It is agreed that
the Company will not require opinions of counsel for transactions made pursuant
to Rule 144 except in unusual circumstances. Notwithstanding the provisions of
paragraphs (i) and (ii) above, no such registration statement or opinion of
counsel shall be necessary for a transfer by an Investor which is (A) a
partnership to its partners or retired partners in accordance with partnership
interests, (B) a corporation to its shareholders in accordance with their
interest in the corporation, (C) a limited liability company to its members or
former members in accordance with their interest in the limited liability
company, or (D) to the Investor's family member or trust for the benefit of an
individual Investor, provided the transferee will be subject to the terms of
this Section 4.1 to the same extent as if such transferee were an original
Investor hereunder.
(b) Transfer or Assignment of Registration Rights. The rights to
---------------------------------------------
cause the Company to register securities granted to an Investor by the Company
under this Agreement may be transferred or assigned by an Investor or its
permitted assigns (i) which is a partnership to its partners or retired partners
in accordance with their partnership interests (ii) a corporation to its
shareholders in accordance with their interest in the corporation, (iii) a
limited liability company
19
to its members or former members in accordance with their interest in the
limited liability company or (iv) only to a transferee or assignee of not less
than 75,000 shares of Registrable Securities (adjusted for any reclassification,
recapitalization, stock combination, stock dividend, merger, consolidation or
other reorganization), provided that the Company is given written notice at the
time of or within a reasonable time after said transfer or assignment, stating
the name and address of the transferee or assignee and identifying the
securities with respect to which such registration rights are being transferred
or assigned, and, provided further, that, except in the case of transfers by a
partnership, corporation or limited liability company as provided in this
section 4.1(b), the transferee or assignee of such rights assumes in writing the
obligations of such Investor under this Section 4.1.
4.2. Rule 144. If the Company shall have filed a registration statement
--------
pursuant to the requirements of Section 12 of the Exchange Act or a registration
statement pursuant to the requirements of the Securities Act in respect of the
Common Stock or securities of the Company convertible into or exchangeable or
exercisable for Common Stock, the Company covenants that (i) so long as it
remains subject to the reporting provisions of the Exchange Act, it will timely
file the reports required to be filed by it under the Securities Act or the
Exchange Act (including, but not limited to, the reports under Sections 13 and
15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 under
the Securities Act), and (ii) 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 (A) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (B) any similar rule or regulation hereafter adopted by
the Commission. 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.
4.3. Amendments and Waivers. This Agreement may be amended,
----------------------
modified, supplemented or waived only upon the written agreement of the Company
and the holders of not less than seventy-five percent (75%) of the shares of
Registrable Securities (excluding for such purposes, Holders of Registrable
Securities representing less than two percent (2%) of the Company's issued and
outstanding Common Stock on an as-converted basis and, for purposes of
calculating the 75%, the Registrable Securities held by such Holders), except
that no provision of this Agreement shall be amended, modified, supplemented or
waived if such amendment, modification, supplement or waiver would adversely
affect any Holder and would not have the same effect on all Holders without the
prior written consent of each Holder that would be so adversely affected.
4.4. Notices. Except as otherwise provided in this Agreement, all
-------
notices, requests, consents and other communications hereunder to any party
shall be deemed to be sufficient if contained in a written instrument delivered
in person or by telecopy, nationally recognized overnight courier or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at the address set forth below or in a counterpart
hereto (as the case may be ) or such other address as may hereafter be
designated in writing by such party to the other parties:
20
(i) if to the Company, to:
Intek Information Inc.
0000 XXX Xxxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
Xxxxxxxx, Xxxxx & Xxxxxxx, P.C.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: G. Xxxxx Xxxxxxxx, Jr.
(ii) if to Beacon, to:
The Beacon Group III - Focus Value Fund, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx
With a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Shine, Esq.
(iii) if to Bain or SLI, to:
Xxxx & Company, Inc.
0 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Treasurer
(iv) if to Conning, to:
Conning & Company
City Place II, 9th Floor
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
21
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
With a copy to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx, LLP
Xxxxxxx Xxxxxx, 00xx Xxxxx
00 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxxxx
(v) if to USITF, Encompass or TCI, to:
Trans Cosmos USA
Trans Cosmos
000 000xx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
With a copy to:
Xxxxxx, Pepper & Shefelman
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
(vi) if to BVCF IV, L.P., to:
Xxxxxxx Partners, Inc.
000 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 6069
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
With a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
22
(vii) if to X'Xxxxxxx, to:
Xxxxxxx X. X'Xxxxxxx
c/o Intek Information, Inc.
0000 XXX Xxxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
(viii) if to Xxxxxxxx, Fields or any Protocall Shareholder, to:
c/o Xxxxx Xxxxxxxx
c/o Intek Information, Inc.
0000 XXX Xxxxxxx, 00xx xxxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
(ix) if to any other Investor, to the individual at the address
set forth in the Schedule of Investors attached hereto.
All such notices, requests, consents and other communications shall be deemed to
have been given when received.
4.5. No Inconsistent Agreements. Without the prior written consent of
--------------------------
holders of not less than seventy-five percent (75%) of the shares of Registrable
Securities (excluding for such purposes, Holders of Registrable Securities
representing less than two percent (2%) of the Company's issued and outstanding
Common Stock on an as-converted basis and, for purposes of calculating the 75%,
the Registrable Securities held by such Holders), 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 in this Agreement or
otherwise conflicts with the provisions hereof, other than any lock-up agreement
with the underwriters in connection with any registered offering effected
hereunder, pursuant to which the Company shall agree not to register for sale,
and the Company shall agree not to sell or otherwise dispose of, Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
for a specified period following the registered offering.
4.6. Miscellaneous.
-------------
(a) Except as otherwise expressly provided herein, this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto and the respective successors, personal representatives and
assigns of the parties hereto. If any Holder shall acquire additional
Registrable Securities, such Registrable Securities shall be subject to all of
the terms, and entitled to all the benefits, of this Agreement. No Person other
than a Holder shall be entitled to any benefits under this Agreement, except as
otherwise expressly provided herein.
23
(b) Except as set forth in Section 4.8, this Agreement (with the
documents referred to herein or delivered pursuant hereto) embodies the entire
agreement and understanding between the parties hereto and supersedes all prior
agreements and understandings relating to the subject matter hereof.
(c) This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of New York without giving effect to
the conflicts of law principles thereof.
(d) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof. All section
references are to this Agreement unless otherwise expressly provided.
(e) This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
(f) Any term or provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
(g) The parties hereto acknowledge that there would be no adequate
remedy at law if any party fails to perform any of its obligations hereunder,
and accordingly agree that each party, in addition to any other remedy to which
it may be entitled at law or in equity, shall be entitled to injunctive relief,
including specific performance, to enforce such obligations without the posting
of any bond, 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.
(h) Each party hereto shall take all such action necessary to cause
each certificate of the Company's securities to bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
REGISTRATION RIGHTS AGREEMENT, BY AND AMONG INTEK INFORMATION, INC. AND
CERTAIN OTHER PARTIES, A COPY OF WHICH IS AVAILABLE AT THE OFFICES OF THE
ISSUER.
(i) Each party hereto shall do and perform or cause to be done and
performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments, and documents as any other
party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
24
4.7. Termination. This Agreement shall terminate and be of no further
---- -----------
force and effect seven years from the date it shall be come effective, provided,
however, that Sections 2.9, 4.6(c) and 4.6(g) shall survive termination of this
Agreement.
4.8 Effectiveness of the Agreement. Notwithstanding anything to the
------------------------------
contrary set forth in this Agreement, until the Company's IPO shall have been
completed in a manner that causes all of the then outstanding Preferred Stock to
be converted automatically into shares of Common Stock in accordance with the
Company's Certificate of Incorporation, (i) this Agreement shall not be
effective and (ii) the Original Registration Rights Agreements shall remain in
full force and effect. When the Company's IPO shall have been completed in a
manner that causes all of the then outstanding Preferred Stock to be converted
automatically into shares of Common Stock in accordance with the Company's
Certificate of Incorporation, this Agreement shall become effective and shall
supersede the Original Registration Rights Agreements.
25
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement to become effective as set forth above
INTEK INFORMATION, INC.
By: /s/ Xxxxxxx X. X'Xxxxxxx
---------------------------
Xxxxxxx X. X'Xxxxxxx
Chief Executive Officer and President
THE BEACON GROUP III - FOCUS VALUE FUND, L.P.
By: Focus Value Investors, L.L.C.,
Its general partner
By: Focus Value GP, Inc.,
Its managing partner
By: /s/ Xxxx Xxxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxxx
-------------------------
Title: Managing Director
------------------------
SQUAM LAKE INVESTORS II, L.P.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Xxxxx X. Xxxxxxxx
President of GPI, Inc., its
Managing General Partner
XXXX & COMPANY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------
Xxxxx X. Xxxxxxxx
Finance Director
CONNING INSURANCE CAPITAL LIMITED PARTNERSHIP V
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------
Title: Vice President
-------------------------
26
U.S. INFORMATION TECHNOLOGY FINANCING, L.P.
By: /s/ Xxxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
--------------------------
Title: Managing Director
-------------------------
ENCOMPASS GROUP, INC.
By: /s/ Xxxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
--------------------------
Title: Managing Director
------------------------
TRANS COSMOS USA, INC.
By: /s/ Xxxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
--------------------------
Title: Managing Director
------------------------
BVCF IV, L.P.
By: X.X. Path Associates, LLC,
its General Partner
By: Xxxxxxx Venture Management, LLC,
its Attorney-in-fact
By: Xxxxxxx Partners, Inc.,
its Managing Member
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Xxxxxx X. Xxxxxx
Executive Director
X'XXXXXXX
By: /s/ Xxxxxxx X. X'Xxxxxxx
------------------------------
Xxxxxxx X. X'Xxxxxxx
FIELDS
By: /s/ Xxxx Xxxxxx
-----------------------------
Xxxx Xxxxxx
XXXXXXXX
By: /s/ Xxxxx Xxxxxxxx
-----------------------------
Xxxxx Xxxxxxxx
27
