REGISTRATION RIGHTS AGREEMENT
Exhibit 6
This
Registration Rights Agreement (this “Agreement”) is
made and entered into as of May 13, 2005, among Healthaxis Inc., a Pennsylvania
corporation (the “Company”), and Tak Investments, Inc.
a Delaware corporation (the “Holder”).
This
Agreement is made pursuant to the Stock and Warrant Purchase Agreement, dated
as of February 23, 2005 among the Company and the Holder (the “Purchase
Agreement”).
The
Company and the Holder hereby agree as follows:
1.
Definitions
Capitalized
terms used and not otherwise defined herein shall have the meanings given to
such terms in the Purchase Agreement. As used in this Agreement, the following
terms shall have the following meanings:
“Affiliate”
means, with respect to any Person, any other Person that directly or indirectly
controls or is controlled by or under common control with such Person. For the
purposes of this definition, “control,”
when used with respect to any Person, means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies
of such Person, whether through the ownership of voting securities, by contract
or otherwise; and the terms “affiliated,”
controlling” and “controlled”
have meanings correlative to the foregoing.
“Business
Day” means any day except Saturday, Sunday
and any day which shall be a legal holiday or a day on which banking institutions
in the State of Texas generally are authorized or required by law or other government
actions to close.
“Closing
Date” means the Closing Date, as defined
in the Purchase Agreement.
“Commission”
means the Securities and Exchange Commission.
“Common
Stock” means the Company’s Common Stock,
par value $.10 per share.
“Effectiveness
Date” means the earlier of: (i) ten days
after the Company has received notice (written or oral) from the Commission
that the Commission’s staff will not be reviewing the Registration Statement
or has no further comments on the Registration Statement or (ii) 120 days following
the Filing Date.
“Effectiveness
Period” has the meaning set forth in Section
2(a) hereof.
“Exchange
Act” means the Securities Exchange Act of
1934, as amended.
“Filing
Date” means the date on which the Initial
Registration Statement is filed with the Commission, which shall be as soon
as practicable after the Closing Date, but in no event later than the 30th Business
Day following the Closing Date.
“Holder”
or “Holders” means the holder
or holders, as the case may be, from time to time of Registrable Securities.
“Indemnified
Party” has the meaning set forth in Section
5(c) hereof.
“Indemnifying
Party” has the meaning set forth in Section
5(c) hereof.
“Initial
Registration Statement” has the meaning set
forth in Section 2(a) hereof.
“Losses”
has the meaning set forth in Section 5(a) hereof.
“Majority
Holders” means the Holders of at least sixty
(60%) percent of the then outstanding Registrable Securities (as calculated
on an as-converted or as-exercised basis).
“Nasdaq”
means The Nasdaq Stock Market.
“Person”
means an individual or a corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or political subdivision thereof) or other entity of
any kind.
“Proceeding”
means any action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition), whether
commenced or threatened.
“Prospectus”
means the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated under the Securities Act), as amended or supplemented
by any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement,
and all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference in such Prospectus.
“Registrable
Securities” means: (i) the Purchased Shares
and the Warrant Shares and (ii) any shares of the Company’s capital stock
issued with respect to the Securities as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise; provided,
that, a security shall cease to be a Registrable Security upon (A) such security
becoming eligible for sale by the Holders pursuant to Rule 144(k) and (B) the
Holder of such security is not deemed to be an Affiliate under Rule 144(k) as
determined by the mutual written Agreement of the Company and such Holder, as
set forth in Section 2(a).
“Registration
Statement” means the Initial Registration
Statement and any additional registration statements contemplated by Sections
2(a) or 2(b), including (in each case) the Prospectus, amendments and supplements
to such Registration Statement or Prospectus, including pre-effective and post-effective
amendments, all exhibits thereto, and all material incorporated by reference
in such Registration Statement.
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“Rule
144” means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such rule.
“Rule
158” means Rule 158 promulgated by the Commission
pursuant to the Securities Act, as such rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such rule.
“Rule
415” means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such rule.
“Securities”
means the Purchased Shares and the Purchased Warrants granted to the Holders
under the Purchase Agreement.
“Securities
Act” means the Securities Act of 1933, as
amended.
“Special
Counsel” means one special counsel to the
Holders, as identified by the Majority Holders.
2.
Registration Requirements
(a)
Filing and Effectiveness Obligations. On or prior to the Filing Date,
the Company shall prepare and file with the Commission a Registration Statement
(the “Initial Registration Statement”)
which shall cover all Registrable Securities for an offering to be made on a
continuous basis pursuant to a “shelf” registration statement under
Rule 415. The Initial Registration Statement shall be on Form S-3 or any successor
form (except if the Company is not then eligible to register the Registrable
Securities for resale on Form S-3, in which case such registration shall be
on another appropriate form reasonably acceptable to the Majority Holders).
The Company shall: (i) not permit any securities other than the Registrable
Securities to be included in the Initial Registration Statement (except pursuant
to the exercise of other registration rights outstanding on the date of this
Agreement), (ii) use its best efforts to cause the Initial Registration Statement
to be declared effective under the Securities Act as promptly as possible after
the Filing Date, but in any event on or prior to the Effectiveness Date, and
(iii) keep such Initial Registration Statement continuously effective under
the Securities Act (subject to Section 3(r)) for a period that will terminate
upon the date on which all Registrable Securities covered by such Registration
Statement that are held by a Holder may be sold pursuant to Rule 144(k)
and such Holder is not deemed to be an Affiliate under Rule 144(k), as
determined by the mutual written agreement of the Company and such Holder (it
being understood that the Company and a Holder may reach such a mutual agreement
with respect to less than all of the Registrable Securities held by such Holder,
and in such event the Company’s registration obligations with respect thereto
shall cease) (the “Effectiveness Period”).
Once the Company is no longer required to keep the Initial Registration Statement
effective with respect to all or a portion of the Registrable Securities of
a given Holder, the Company shall have no further obligations hereunder with
respect to the registration for resale of such shares of Registrable Securities
and such shares shall no longer be deemed “Registrable Securities”
hereunder.
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(b)
Piggyback Registrations. Except as otherwise provided in this Section 2(b),
if at any time the Company decides to prepare and file with the Commission a
Registration Statement relating to an underwritten public offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then-equivalent forms relating to equity securities
to be issued in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, the Company shall send to each Holder of Registrable Securities
written notice of such decision and, if within ten (10) days after receipt of
such notice, any such Holder shall so request in writing (which request shall
specify the Registrable Securities intended to be disposed of by the Holders),
the Company will use reasonable best efforts to effect the registration under
the Securities Act of all Registrable Securities which the Company has been
so requested to register by such Holder in connection with such underwritten
public offering; 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 decide for any reason not to register or
to delay registration of such securities, the Company may, at its election,
give written notice of such decision to such Holder 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 expenses in accordance with Section 4 hereof)
and (ii) in the case of a determination to delay registering, shall be permitted
to delay registering any Registrable Securities being registered pursuant to
this Section 2(b) for the same period as the delay in registering such other
securities. The Company shall include in such registration statement all or
any part of such Registrable Securities that such Holder requests to be registered;
provided, however, that the Company shall not be required to register
any Registrable Securities pursuant to this Section 2(b) that are eligible for
sale pursuant to Rule 144(k) of the Securities Act, as determined by the mutual
written agreement of the Company and such Holder (it being understood that the
Company and a Holder may reach such a mutual agreement with respect to less
than all of the Registrable Securities held by such Holder, and in such event
the Company’s registration obligations with respect thereto shall cease).
Notwithstanding any other provision of this Section 2(b), in the case of an
underwritten public offering, if the managing underwriter reasonably determines
that marketing factors require a limitation on the number of shares to be offered,
the underwriter may (subject to the allocation priority set forth below) exclude
from such Registration Statement up to all of the securities which would otherwise
be offered by persons other than the Company for the Company’s own account.
The Company shall so advise all holders of securities requesting registration
of any limitations on the number of shares to be offered and the number of shares
of securities that are to be excluded from registration. Securities to be excluded
from registration shall be determined in the following order of priority: first
to be excluded, the securities held by any person not having contractual piggyback
registration rights; second to be excluded, securities held by any person having
contractual piggyback registration rights pursuant to an agreement other than
either the Rights Agreement dated as of November 13, 1998 by and between the
Company and America Online, Inc. or this Agreement; third to be excluded, Registrable
Securities of the Holders, reduced pro rata among such Holders (based upon the
number of Registrable Securities requested to be included in the registration);
and last to be excluded, securities held by any person having contractual piggyback
registration rights pursuant to the Rights Agreement dated as of Novermber 13,
1998 by and between the Company and America Online, Inc.
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(c)
Form S-3 Eligibility. The Company represents and warrants that, as of
the date hereof, it meets the registrant eligibility and transaction requirements
for the use of Form S-3 (for secondary offerings) for the registration of the
sale of Registrable Securities by the Holders and the Company shall file all
reports required to be filed by the Company with the Commission in a timely
manner so as to maintain such eligibility for the use of Form S-3.
3.
Registration Procedures. In connection with the Company’s registration
obligations hereunder, the Company shall:
(a)
Preparation of Registration Statement. Prepare and file with the Commission
on or prior to the Filing Date a Registration Statement on Form S-3 or its successor
form (or if the Company is not then eligible to register for resale the Registrable
Securities on Form S-3, such registration shall be on another appropriate form
in accordance herewith, which shall include a Plan of Distribution substantially
in the form of Exhibit A annexed hereto, unless in connection with a
Piggyback Registration), or such other form agreed to by the Company and by
the Majority Holders, and cause the Registration Statement to become effective
and remain effective as provided herein; provided, however, that
not less than five (5) Business Days prior to the filing of the Registration
Statement or any related Prospectus or any amendment or supplement thereto,
the Company shall, if reasonably practicable: (i) furnish to the Holders, their
Special Counsel and any managing underwriters, copies of all such documents
proposed to be filed, which documents will be subject to the review of such
Holders, their Special Counsel and such managing underwriters and (ii) cause
its officers and directors, counsel and independent certified public accountants
to respond to such inquiries as shall be necessary, in the reasonable opinion
of respective counsel to such Holders and such underwriters, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Majority Holders, their Special Counsel or
any managing underwriters shall reasonably object, and will not request acceleration
of such Registration Statement without prior notice to such counsel. The sections
of such Registration Statement covering information with respect to the Holders,
the Holder’s beneficial ownership of securities of the Company or the Holders
intended method of disposition of Registrable Securities shall conform to the
information provided to the Company by each of the Holders.
(b)
Amendments. (i) Prepare and file with the Commission any amendments,
including post-effective amendments, to the Registration Statement as may be
necessary to keep the Registration Statement continuously effective for the
Effectiveness Period and prepare and file with the Commission such additional
Registration Statements as are required to be filed hereunder in order to register
all of the Registrable Securities for resale under the Securities Act, (ii)
cause the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so amended or supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) promulgated under the Securities Act,
(iii) respond as promptly as possible to any comments received from the Commission
with respect to the Registration Statement or any amendment thereto and as promptly
as practicable, but in no event later than ten (10) Business Days, (iv) provide
the Holders true and complete copies of all correspondence to and from the Commission
relating to the Registration Statement and (v) comply in all material respects
with the provisions of the Securities Act and the Exchange Act with
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respect to
the disposition of all of the Registrable Securities covered by the Registration
Statement during the applicable period in accordance with the intended methods
of disposition by the Holders thereof set forth in the Registration Statement
as so amended or in such Prospectus as so supplemented.
(c)
Notifications. Notify the Holders of Registrable Securities to be sold,
their Special Counsel and any managing underwriters as promptly as possible
(and, in the case of (i)(A) below, not less than two (2) days prior to such
filing and, in the case of (i)(C) below, not later than the second Business
Day after effectiveness) and, if requested by any such Person, confirm such
notice in writing no later than two (2) Business Days following the day: (i)
(A) when a Prospectus or any Prospectus supplement or post-effective amendment
to the Registration Statement is proposed to be filed, (B) when the Commission
notifies the Company whether there will be a “review” of such Registration
Statement and whenever the Commission comments in writing on such Registration
Statement and (C) with respect to the Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the Commission
or any other Federal or state governmental authority for amendments or supplements
to the Registration Statement or Prospectus or for additional information, (iii)
of the Commission’s issuance of any stop order suspending the effectiveness
of the Registration Statement covering any or all of the Registrable Securities
or the initiation of any Proceeding for that purpose, (iv) that any of the representations
and warranties of the Company contained in this Agreement ceases to be true
and correct in all material respects, (v) of the Company’s receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any jurisdiction,
or the initiation or threatening of any Proceeding for such purpose, (vi) of
the occurrence of any event that makes any statement made in the Registration
Statement or Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires any revisions
to the Registration Statement, Prospectus or other documents so that, in the
case of the Registration Statement or the Prospectus, as the case may be, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading
and (vii) the beginning and end of a black-out period pursuant to Section 3(r).
(d)
Suspensions. Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of: (i) any order suspending the effectiveness of the
Registration Statement or (ii) any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any jurisdiction,
at the earliest practicable moment.
(e)
Supplements and Post-Effective Amendments. If requested by any managing
underwriter or the Holders of a majority in interest of the Registrable Securities
to be offered under a Registration Statement: (i) promptly incorporate in a
Prospectus supplement or post-effective amendment to the Registration Statement,
such information as the Company reasonably agrees should be included therein
and (ii) make all required filings of such Prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received notification
of the matters to be incorporated in such Prospectus supplement or post-effective
amendment; provided, however, that the Company shall not be required
to take any action pursuant to this Section 3(e) that would, in the written
opinion of counsel for the Company (addressed to counsel to the Holders), violate
applicable law.
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(f)
Copies of Registration Statement. Furnish to each Holder, their Special
Counsel and any managing underwriters, without charge, at least one conformed
copy of each Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits to the extent requested by such Person
(including those previously furnished or incorporated by reference) promptly
after the filing of such documents with the Commission.
(g)
Copies of Prospectus. Promptly deliver to each Holder, their Special
Counsel and any managing underwriters, without charge, as many copies of the
Prospectus or Prospectuses (including each form of prospectus) and each amendment
or supplement thereto as such Persons may reasonably request; and the Company
hereby consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders and any underwriters in connection with
the offering and sale of the Registrable Securities covered by such Prospectus
and any amendment or supplement thereto.
(h)
Blue Sky. Prior to any public offering of Registrable Securities, use
its best efforts to register or qualify or cooperate with the selling Holders,
any underwriters and their Special Counsel in connection with the registration
or qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Holder or underwriter
requests in writing, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other
acts or things necessary or advisable to enable the disposition in such jurisdictions
of the Registrable Securities covered by a Registration Statement; provided,
however, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action that would subject it to general service of process in any such jurisdiction
where it is not then so subject or subject the Company to any material tax in
any such jurisdiction where it is not then so subject.
(i)
Certificates. Cooperate with the Holders and any managing underwriters
to (A) facilitate the timely preparation and delivery of certificates representing
Registrable Securities sold pursuant to a Registration Statement, and such certificates
shall be free, to the extent permitted by applicable law and the Investor Rights
Agreement, of all restrictive legends, and (B) enable such Registrable Securities
to be in such denominations and registered in such names as any such managing
underwriters or Holders may request.
(j)
Supplements and Amendments. Upon the occurrence of any event contemplated
by Section 3(c)(vi), as promptly as possible, prepare a supplement or amendment,
including a post-effective amendment, to the Registration Statement or a supplement
to the related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as thereafter
delivered, neither the Registration Statement nor such Prospectus will contain
any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
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(k)
Listing. Cause all Registrable Securities relating to such Registration
Statement to be listed on Nasdaq or any other securities exchange, quotation
system, market or over-the-counter bulletin board, if any, on which similar
securities issued by the Company are then listed as and when required pursuant
to the Purchase Agreement.
(l)
Underwriting Agreement and Related Documents. Enter into such agreements
(including an underwriting agreement in form, scope and substance as is customary)
and take all such other actions in connection therewith (including those reasonably
requested by any managing underwriters and the Holders of a majority of the
Registrable Securities being sold) in order to expedite or facilitate the disposition
of such Registrable Securities, and whether or not an underwriting agreement
is entered into: (i) make such representations and warranties to such Holders
and such underwriters as are customarily made by issuers to underwriters in
underwritten public offerings, and confirm the same if and when requested, (ii)
in the case of an underwritten offering obtain and deliver copies thereof to
the managing underwriters, if any, or in the case of non-underwritten offerings,
if reasonably requested by the selling Holders, obtain and deliver copies thereof
to such selling Holders, of opinions of counsel to the Company and updates thereof
addressed to each such underwriter, in form, scope and substance reasonably
satisfactory to any such managing underwriters and Special Counsel to the selling
Holders covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such Special
Counsel and underwriters, (iii) immediately prior to the effectiveness of a
Registration Statement, and, in the case of an underwritten offering, at the
time of delivery of any Registrable Securities sold pursuant thereto, and, in
the case of non-underwritten offerings, at such time as the selling Holders
may reasonably request (and at the expense of the selling Holders), obtain and
deliver copies to the Holders and the managing underwriters, if any, of “cold
comfort” letters and updates thereof from the Company’s independent
certified public accountants (and, if required, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data is, or is required
to be, included in the Registration Statement), addressed to each of the underwriters,
if any, in form and substance as are customary in connection with underwritten
offerings, (iv) if an underwriting agreement is entered into, the same shall
contain indemnification provisions and procedures no less favorable to the selling
Holders and the underwriters, if any, than those set forth in Section 5 hereof
(or such other provisions and procedures acceptable to the managing underwriters,
if any, and the Holders of a majority of Registrable Securities participating
in such offering) and (v) deliver such documents and certificates as may be
reasonably requested by the Holders of a majority of the Registrable Securities
being sold, their Special Counsel and any managing underwriters to evidence
the continued validity of the representations and warranties made pursuant to
clause (i) above and to evidence compliance with any customary conditions contained
in the underwriting agreement or any other agreement entered into by the Company.
(m)
Due Diligence. Make available for inspection by the selling Holders,
any representative of such Holders, any underwriter participating in any disposition
of Registrable Securities and any attorney or accountant retained by such selling
Holders or underwriters, at the offices where normally kept and during reasonable
business hours, all financial and other records, pertinent corporate documents
and properties of the Company and its subsidiaries, and cause the officers,
directors, agents and employees of the Company and its subsidiaries to supply
all information in
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each case
reasonably requested by any such Holder, representative, underwriter, attorney
or accountant in connection with the Registration Statement; provided,
however, that if any information is determined in good faith by the Company
(in writing) to be of a confidential nature at the time of delivery of such
information, then prior to delivery of such information, the Company and the
Holders shall enter into a confidentiality agreement reasonably acceptable to
the Company and the Holders providing that such information shall be kept confidential,
unless: (i) disclosure of such information is required by a court or administrative
order or is necessary to respond to inquiries of regulatory authorities (provided,
however, that the Company shall be given notice of any such pending disclosure
so that the Company may seek a protective order), (ii) disclosure of such information,
in the opinion of counsel to such Person, is required by law, (iii) such information
becomes generally available to the public other than as a result of a disclosure
or failure to safeguard by such Person or (iv) such information becomes available
to such Person from a source other than the Company and such source is not known
by such Person to be bound by a confidentiality agreement with the Company.
(n)
Earnings Statement. Comply in all material respects with all applicable
rules and regulations of the Commission and make generally available to its
security holders earning statements satisfying the provisions of Section 11(a)
of the Securities Act and Rule 158 not later than 45 days after the end of any
3-month period (or 90 days after the end of any 12-month period if such period
is a fiscal year): (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm commitment or best
efforts underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the Company
after the effective date of the Registration Statement, which statements shall
conform to the requirements of Rule 158.
(o)
Information. The Company may require each selling Holder to furnish to
the Company information regarding such Holder and the distribution of such Registrable
Securities as is required by law to be disclosed in the Registration Statement
and the Company may exclude from such registration the Registrable Securities
of any such Holder who unreasonably fails to furnish such information within
a reasonable time after receiving such request.
The
Company shall hold in confidence and not make any disclosure of information
concerning a Holder provided to the Company in connection with the preparation
of the Registration Statement unless: (i) disclosure of such information is
necessary to comply with federal or state securities laws, as determined in
the opinion of legal counsel to the Company, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any Registration
Statement, (iii) the release of such information is ordered pursuant to a subpoena
or other order from a court or governmental body of competent jurisdiction or
(iv) such information has been made generally available to the public other
than by disclosure in violation of this or any other agreement. The Company
agrees that it shall, upon learning that disclosure of such information concerning
a Holder is sought in or by a court or governmental body of competent jurisdiction
or through other means, give prompt notice to such Holder prior to making such
disclosure, and allow the Holder, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, such information.
Registration
Rights Agreement
9
If
the Registration Statement 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 (if such reference to such Holder by name or otherwise is not required
by the Securities Act or any similar Federal statute then in force) the deletion
of the reference to such Holder in any amendment or supplement to the Registration
Statement filed or prepared subsequent to the time that such reference ceases
to be required.
Each
Holder covenants and agrees that: (i) it will not sell any Registrable Securities
under the Registration Statement until it has received copies of the Prospectus
as then amended or supplemented as contemplated in Section 3(g) and notice from
the Company or otherwise that such Registration Statement and any post-effective
amendments thereto have become effective as contemplated by Section 3(c) and
(ii) it and its officers, directors or Affiliates, if any, will comply with
the prospectus delivery requirements of the Securities Act as applicable to
them in connection with sales of Registrable Securities pursuant to the Registration
Statement.
Each
Holder agrees by its acquisition of such Registrable Securities that, upon receipt
of a notice from the Company of the occurrence of any event of the kind described
in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi) such Holder will
forthwith discontinue disposition of such Registrable Securities under the Registration
Statement until such Holder’s receipt of the copies of the supplemented
Prospectus and/or amended Registration Statement contemplated by Section 3(j),
or until it is advised in writing by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any additional
or supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement.
(p)
Responses to the Commission. The Company agrees to respond fully and
completely to any and all comments on a Registration Statement received from
the Commission staff as promptly as possible but, for non-underwritten offerings,
in no event later than ten (10) Business Days of the receipt of such comments,
regardless of whether such comments are in oral or written form.
(q)
Confirmation of Effectiveness. Within two (2) Business Days after a Registration
Statement which covers applicable Registrable Securities is ordered effective
by the Commission, the Company shall deliver, and shall cause legal counsel
for the Company to deliver, to the transfer agent for such Registrable Securities
(with copies to the Holders whose Registrable Securities are included in such
Registration Statement) confirmation that such Registration Statement has been
declared effective by the Commission.
(r)
Black-out Periods. The Company may by written notice require that the
Holders immediately cease sales of Registrable Securities pursuant to a Registration
Statement at any time that: (i) the Company becomes engaged in a business
activity or negotiation which is not disclosed in a Registration Statement (or
the prospectus included therein) which the Company reasonably believes must
be disclosed therein under applicable law and which the Company desires to keep
confidential for business purposes, (ii) the Company determines that a
particular disclosure so determined to be required to be disclosed therein would
be premature or would adversely affect the Company or its business or prospects
or (iii) the Registration Statement can no longer be used under
Registration
Rights Agreement
10
the
existing rules and regulations promulgated under the Securities Act (each of
(i), (ii) or (iii), a “Material Condition”).
The Company shall not be required to disclose to the Holders which of the reasons
specified in (i), (ii) or (iii) above is the basis for requiring a suspension
of sales due to the occurrence of a Material Condition. The Company shall use
its commercially reasonable best efforts to ensure that the use of the Registration
Statement (and the prospectus included therein) may be resumed as soon as it
is practicable.
4.
Registration Expenses
All
fees and expenses incident to the performance of or compliance with this Agreement
by the Company shall be borne by the Company, whether or not pursuant to a Registration
Statement and whether or not any Registration Statement is filed or becomes
effective and whether or not any Registrable Securities are sold pursuant to
such Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation (a) all registration and filing fees
(including, without limitation, reasonable fees and expenses (i) incurred with
respect to filings required to be made with Nasdaq and each other securities
exchange or market on which Registrable Securities are required hereunder to
be listed and (ii) incurred in connection with compliance with state securities
or Blue Sky laws (including, without limitation, reasonable fees and disbursements
of counsel for the Holders in connection with Blue Sky qualifications of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as the managing
underwriters, if any, or the Holders of a majority of Registrable Securities
may designate)), (b) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the printing of prospectuses is requested by the managing underwriters, if
any, or by the Holders of a majority of the Registrable Securities included
in the Registration Statement), (c) messenger, telephone and delivery expenses,
(d) fees and disbursements of counsel for the Company, (e) Securities Act liability
insurance, if the Company so desires such insurance, and (f) fees and expenses
of all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement (other than underwriting
fees, discounts or commissions applicable to the sale of Registrable Securities).
In addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated
by this Agreement (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the expense
of any annual audit, and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder.
5.
Indemnification
(a)
Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder and their
respective Affiliates, and the officers, directors, agents (including any underwriters
retained by such Holder in connection with the offer and sale of Registrable
Securities), brokers (including brokers who offer and sell Registrable Securities
as principal as a result of a pledge or any failure to perform under a margin
call of Common Stock), investment advisors, employees, successors and assigns
of each of them, to the fullest extent permitted by applicable law, from and
against any and all joint or several losses, claims,
Registration
Rights Agreement
11
damages,
liabilities, costs (including, without limitation, costs of preparation and
attorneys’ fees) and expenses (collectively, together with actions, proceedings
or inquiries by any regulatory or self-regulatory organization, whether commenced
or threatened, “Losses”), as incurred,
arising out of or relating to: (i) any untrue or allegedly untrue statement
of a material fact contained in the Registration Statement, any Prospectus,
any form of prospectus or in any amendment or supplement thereto or in any preliminary
Prospectus, or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or form of prospectus or supplement thereto,
in light of the circumstances under which they were made) not misleading, except
to the extent that any untrue statements or omissions are based solely upon
and in conformity with information regarding such Holder furnished in writing
to the Company by such Holder expressly for use therein, which information was
reasonably relied upon by the Company for use therein or to the extent that
such information relates to such Holder or such Holder’s proposed method
of distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of prospectus or in any amendment or supplement thereto
(provided that the Company amended any disclosure with respect to the method
of distribution upon written notice from the Holders that such section of the
Prospectus should be revised in any way), (ii) any violation or alleged violation
by the Company or any of its Affiliates or agents of the Securities Act, the
Exchange Act, any other law, including, without limitation, any state securities
law or any rule or regulation thereunder relating to the offer or sale of Registrable
Securities and (iii) any costs of enforcing the Company’s indemnification
obligations under this Section 5(a). The Company shall not, however, be liable
for any Losses to any Holder (a) with respect to any untrue or allegedly untrue
statement of material fact or omission or alleged omission of material fact
if such statement or omission was made in a preliminary Prospectus and such
Holder did not provide the final Prospectus (or any amendment or supplement
thereto) to the purchaser of the relevant securities at or prior to the confirmation
of the sale of the Registrable Securities in any case where such delivery is
required by the Securities Act, and the untrue or allegedly untrue statement
of material fact or omission or alleged omission of material fact contained
in such preliminary Prospectus was corrected in such final Prospectus (or any
amendment or supplement thereto), unless the failure to deliver such final Prospectus
(as amended or supplemented) was a result of noncompliance by the Company with
Section 3(g) of this Agreement, or (b) in the event that notwithstanding the
fact that the Company advised the Holder in writing pursuant to Section 3(r)
hereof that sales of Registrable Securities cannot be made under a Registration
Statement because of non-public Company developments that the Company reasonably
believes must be disclosed in the Registration Statement under applicable law
and which disclosure was not made (a “Non-Public Development”),
the Holder nonetheless sells Registrable Securities and a judgment is entered
by a court or administrative tribunal of competent jurisdiction against the
Holder on the basis that the Registration Statement or Prospectus did not contain
disclosure of the Non-Public Development or that the Holder sold such Registrable
Securities while in the possession of the Non-Public Development, but only to
the extent of such judgment.
The
Company shall promptly notify the Holders of the institution, threat or assertion
of any Proceeding of which the Company is aware in connection with the transactions
contemplated by this Agreement or the other Transaction Documents.
Registration
Rights Agreement
12
(b)
Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, and the directors, officers, agents
and employees of the Company, to the fullest extent permitted by applicable
law, from and against all Losses, as incurred, arising solely out of or based
solely upon any untrue statement of a material fact contained in the Registration
Statement, any Prospectus, or any form of prospectus or arising solely out of
or based solely upon any omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading to the extent, but
only to the extent, that such untrue statement or omission is contained in any
information so furnished in writing by such Holder to the Company specifically
for inclusion in the Registration Statement, any Prospectus or any form of prospectus
and that such information was reasonably relied upon by the Company for use
in the Registration Statement, such Prospectus or such form of prospectus or
to the extent that such information relates to such Holder or such Holder’s
proposed method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use in the Registration
Statement, such Prospectus or such form of prospectus; provided, however,
that the indemnity agreement contained in this Section 5(b) shall not apply
to amounts paid in settlement of any Losses if such settlement is effected without
the prior written consent of such Holder, which consent shall not be unreasonably
withheld; provided, further, that such Holder agrees its consent
to any such settlement will not be unreasonably withheld if such Holder will
not be liable for any payments or incur any out-of-pocket expenses with respect
to such settlement. In no event shall the liability of any selling Holder hereunder
be greater in amount than the dollar amount of the net proceeds received by
such Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c)
Conduct of Indemnification Proceedings. If any Proceeding shall be brought
or asserted against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly
notify the Person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying
Party shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all fees
and expenses incurred in connection with defense thereof; provided, however,
that the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or further
review) that such failure shall have proximately and materially adversely prejudiced
the Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (i) the Indemnifying Party has agreed in writing to pay such fees and
expenses, (ii) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to
such Indemnified Party in any such Proceeding, (iii) the named parties to any
such Proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and the Indemnified Party shall have reasonably
concluded on the advice of counsel that there are legal defenses available to
it that are different from or additional to those available to the Indemnifying
Party or (iv) the named parties to any such Proceeding (including any impleaded
parties) include
Registration
Rights Agreement
13
both such
Indemnified Party and the Indemnifying Party, and such Indemnified Party shall
have been advised by counsel that a conflict of interest is likely to exist
if the same counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying Party
in writing that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense
thereof and such counsel shall be at the reasonable expense of the Indemnifying
Party). The Indemnifying Party shall not be liable for any settlement of any
such Proceeding effected without its written consent, which consent shall not
be unreasonably withheld. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending Proceeding
in respect of which any Indemnified Party is a party, unless such settlement
includes an unconditional release of such Indemnified Party from all liability
on claims that are the subject matter of such Proceeding.
All
fees and expenses of the Indemnified Party (including, but not limited to, reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this Section
5(c)) shall be paid to the Indemnified Party, as incurred, within ten (10) Business
Days of written notice thereof to the Indemnifying Party, which notice shall
be delivered no more frequently than on a monthly basis, regardless of whether
it is ultimately determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, however, that the Indemnifying Party may
require such Indemnified Party to undertake to reimburse all such fees and expenses
to the extent that there is a final judicial determination that such Indemnified
Party is not entitled to indemnification hereunder.
(d)
Contribution. If a claim for indemnification under Section 5(a) or 5(b)
hereof is unavailable to an Indemnified Party because of the failure or refusal
of a court of competent jurisdiction to enforce such indemnification in accordance
with its terms (by reason of public policy), then each Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of any Losses in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and such Indemnified Party in connection with the actions, statements
or omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether any action
in question, including any untrue or allegedly untrue statement of a material
fact or omission or alleged omission of a material fact, has been taken or made
by, or relates to information supplied by, such Indemnifying Party or Indemnified
Party, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such action, statement or omission. The
amount paid or payable by a party as a result of any Losses shall be deemed
to include, subject to the limitations set forth in Section 5(c) hereof, any
reasonable attorneys’ or other reasonable fees or expenses incurred by
such party in connection with (i) any Proceeding to the extent that such party
would have been indemnified for such fees or expenses if the indemnification
provided for in this Section 5 was available to such party in accordance with
its terms and (ii) enforcing any rights under this Section 5. In no event shall
any selling Holder be required to contribute an amount under this Section 5(d)
in excess of the net proceeds received by such Holder upon sale of such Holder’s
Registrable Securities pursuant to the Registration Statement giving rise to
such contribution obligation.
Registration
Rights Agreement
14
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable considerations
referred to in the immediately preceding paragraph. 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.
The
indemnity and contribution agreements contained in this Section 5 are in addition
to any liability that the Indemnifying Parties may have to the Indemnified Parties.
6.
Miscellaneous
(a)
Remedies. In the event of a breach by the Company or by a Holder of any
of their obligations under this Agreement, each Holder or the Company, as the
case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled
to specific performance of its rights under this Agreement. The Company and
each Holder agree that monetary damages would not provide adequate compensation
for any losses incurred by reason of a breach by it of any of the provisions
of this Agreement and hereby further agree that, in the event of any action
for specific performance in respect of such breach it shall waive the defense
that a remedy at law would be adequate.
(b)
No Inconsistent Agreements. Neither the Company nor any of its subsidiaries
has, as of the date hereof, nor shall the Company or any of its subsidiaries,
on or after the date of this Agreement, entered into any agreement with respect
to its securities that is inconsistent with the rights granted to the Holders
in this Agreement or otherwise conflicts with the provisions hereof, except
to the extent that such inconsistencies have been eliminated by subsequent amendment
or waiver of any such agreement. In furtherance and not in limitation of the
foregoing, the Company agrees that from and after the date of this Agreement,
the Company shall not, without the prior written consent of the Holders of a
majority of the Registrable Securities, enter into any agreement with any holder
or prospective holder of any securities of the Company that would allow such
holder or prospective holder to include any of such securities in any registration
filed under Section 2(b) hereof, unless under the terms of such agreement, such
holder or prospective holder may include such securities in any such registration
only to the extent that the inclusion of such securities will not reduce the
amount of Registrable Securities of the Holders that are included in such registration.
This Agreement contains the entire understanding of the parties with respect
to the subject matter hereof and supersedes all prior agreements and understandings,
oral or written, with respect to such matters.
(c)
Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and the Majority
Holders; provided, however, that for the purposes of this sentence,
Registrable Securities that are owned, directly or indirectly, by the Company
or an Affiliate of the Company are not deemed outstanding. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of Holders and that does
not directly or indirectly affect the rights of other
Registration
Rights Agreement
15
Holders may
be given by the Majority Holders to which such waiver or consent relates; provided,
however, that the provisions of this sentence may not be amended, modified,
or supplemented except in accordance with the provisions of the immediately
preceding sentence. Any amendment or waiver effected in accordance with this
Section shall be binding upon each Holder, each future Holder, and the Company.
Upon effectiveness of each such amendment or waiver, the Company shall promptly
give written notice thereof to the Holders who have not previously consented
thereto in writing.
(d)
Notices. Any notices, consents, waivers or other communications required
or permitted to be given hereunder shall be in writing and shall be deemed to
have been received: (a) upon hand delivery (receipt acknowledged) or delivery
by telecopy or facsimile (with transmission confirmation report) at the address
or number designated below (if received by 5:00 p.m. eastern time where such
notice is to be received) or the first Business Day following such delivery
(if received after 5:00 p.m. eastern time where such notice is to be received)
or (b) on the second Business Day following the date of mailing by express courier
service, fully prepaid, addressed to such address or upon actual receipt of
such mailing, whichever shall first occur. The addresses for such communications
are:
If
to the Company:
Healthaxis,
Inc. |
With
a copy to (which copy shall not constitute notice):
Xxxxx
Liddell & Xxxx LLP |
If
to Purchaser to:
Tak
Investments, Inc. |
Registration
Rights Agreement
16
With
a copy,
(which
copy shall not constitute notice), to:
Pillsbury Xxxxxxxx Xxxx
Xxxxxxx LLP |
Each
party shall provide written notice to the other party of any change in address
or facsimile number in accordance with the provisions hereof.
(e)
Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties
hereto and shall inure to the benefit of each Holder. The Company may not assign
its rights or obligations hereunder without the prior written consent of the
Majority Holders. The rights of each Holder hereunder, including the right to
have the Company register Registrable Securities for resale in accordance with
the terms of this Agreement, shall be assignable by each Holder if (i) the Holder
agrees in writing with the transferee or assignee to assign such rights, and
a copy of such agreement is furnished to the Company within a reasonable time
after such assignment, (ii) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of (A) the name and address
of such transferee or assignee and (B) the securities with respect to which
such registration rights are being transferred or assigned, (iii) following
such transfer or assignment, to the extent appropriate, the further disposition
of such securities by the transferee or assignee is restricted under the Securities
Act and applicable state securities laws and (iv) at or before the time the
Company receives the written notice contemplated by clause (ii) of this Section,
the transferee or assignee agrees in writing with the Company to be bound by
all of the provisions of this Agreement. The rights to assignment shall apply
to the Holders’ (and to subsequent) successors and assigns.
(f)
Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. In the event
that any signature is delivered by facsimile transmission, such signature shall
create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.
(g)
Governing Law and Forum. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, without regard to principles
of conflicts of law. Any dispute, difference, controversy or claim arising in
connection with or related or incidental to a matter arising under this Agreement
shall be finally settled using the arbitration provisions set forth in Section
10.8 of the Purchase Agreement.
Registration
Rights Agreement
17
(h)
Cumulative Remedies. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
(i)
Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, then the remainder of the terms, provisions, covenants
and restrictions set forth herein shall remain in full force and effect and
shall in no way be affected, impaired or invalidated and the parties hereto
shall use their reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any terms, provisions,
covenants and restrictions that may be hereafter declared invalid, illegal,
void or unenforceable.
(j)
Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(k)
Shares Held by The Company and its Affiliates. Whenever the consent or
approval of Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its Affiliates (other
than any Holder or transferees or successors or assigns thereof if such Holder
is deemed to be an Affiliate of the Company solely by reason of its holdings
of such Registrable Securities) shall not be counted in determining whether
such consent or approval was given by the Holders of such required percentage.
Registration
Rights Agreement
18
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.
| HEALTHAXIS INC. | ||
| By: | /s/ Xxxxx X. XxXxxx | |
| |
||
| Name: | Xxxxx X. XxXxxx | |
| Title: | Chief Executive Officer | |
| HOLDERS: | ||
| TAK INVESTMENTS, INC. | ||
| By: | /s/ Sharad Tak | |
| |
||
| Name: | Sharad Tak | |
| Title: | President | |
Registration
Rights Agreement
19
EXHIBIT A
PLAN OF DISTRIBUTION
We
are registering the shares of common stock on behalf of the selling stockholders.
All costs, expenses and fees in connection with the registration of the shares
offered by this prospectus will be borne by our company, other than brokerage
commissions and similar selling expenses, if any, attributable to the sale of
shares of common stock, which will be borne by the selling stockholders. We
have also agreed to indemnify the selling stockholders against certain losses,
claims, damages and liabilities, including liabilities under the Securities
Act. Sales of shares of common stock may be effected by selling stockholders
from time to time in one or more types of transactions (which may include block
transactions) on Nasdaq, in the over-the-counter market, in privately negotiated
transactions, through put or call options transactions relating to the shares
of common stock, through short sales of shares of common stock, or a combination
of such methods of sale, at market prices prevailing at the time of sale, or
at negotiated prices, and by using any other method permitted pursuant to applicable
law. Such transactions may or may not involve brokers or dealers. The selling
stockholders have advised us that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of their securities, nor is there an underwriter or coordinated broker
acting in connection with the proposed sale of shares of common stock by the
selling stockholders.
The
selling stockholders may enter into hedging transactions with broker-dealers
or other financial institutions. In connection with such transactions, broker-dealers
or other financial institutions may engage in short sales of the shares of common
stock or of securities convertible into or exchangeable for the shares of common
stock in the course of hedging positions they assume with the selling stockholders.
The selling stockholders may also enter into options or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealers or other financial institutions of the shares of common
stock offered by this prospectus, which the broker-dealer or other financial
institution may resell pursuant to this prospectus (as amended or supplemented
to reflect such transaction).
The
selling stockholders may make these transactions by selling shares of common
stock directly to purchasers or to or through broker-dealers, which may act
as agents or principals. These broker-dealers may receive compensation in the
form of discounts, concessions or commissions from selling stockholders and/or
the purchasers of shares of common stock for whom these broker-dealers may act
as agents or to whom they sell as principal, or both (which compensation as
to a particular broker-dealer might be in excess of customary commissions).
The
selling stockholders may from time to time pledge or grant a security interest
in some or all of the securities owned by them and, if they default in the performance
of their secured obligations, the pledgees or secured parties may offer and
sell shares of common stock from time to time under this prospectus, or under
an amendment or supplement to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 modifying the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.
Registration
Rights Agreement
20
The
selling stockholders and any broker-dealers that act in connection with the
sale of shares of common stock may be “underwriters” within the meaning
of Section 2(11) of the Securities Act, and any commissions received by these
broker-dealers or any profit on the resale of the shares of common stock sold
by them while acting as principals might be deemed to be underwriting discounts
or commissions under the Securities Act. The selling stockholders may agree
to indemnify any agent, dealer or broker-dealer that participates in transactions
involving sales of the shares of common stock against certain liabilities, including
liabilities arising under the Securities Act.
The
selling stockholders also may transfer the shares of common stock in other circumstances,
in which case the transferees, pledgees or other successors in interest will
be the selling beneficial owners for purposes of this prospectus.
Because
the selling stockholders may be “underwriters” within the meaning
of Section 2(11) of the Securities Act, the selling stockholders may be subject
to the prospectus delivery requirements of the Securities Act. Our company has
informed the selling stockholders that the anti-manipulative provisions of Regulation
M promulgated under the Exchange Act may apply to their sales in the market.
In addition, our company has made copies of this prospectus available to the
selling stockholders and has informed them of the need for delivery of copies
of this prospectus to purchasers at or prior to the time of any sale of the
shares offered hereby.
The
selling stockholders also may resell all or a portion of the shares of common
stock in open market transactions in reliance upon Rule 144 under the Securities
Act, provided that they meet the criteria and conform to the requirements of
Rule 144.
Upon
our company being notified by a selling stockholder that a material arrangement
has been entered into with a broker-dealer for the sale of shares of common
stock through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplement to this prospectus
will be filed, if required, pursuant to Rule 424(b) under the Securities Act,
disclosing:
- the name of each selling
stockholder and of the participating broker-dealer(s);
- the number of shares
of common stock involved;
- the initial price at
which shares of common stock were sold;
- the commissions paid
or discounts or concessions allowed to the broker-dealer(s), where applicable;
- that the broker-dealer(s)
did not conduct any investigation to verify the information set out or incorporated
by reference in this prospectus; and
- other facts material
to the transactions.
Registration
Rights Agreement
21
In
addition, upon our company being notified by a selling stockholder that a donee
or pledgee intends to sell more than 500 shares of common stock, a supplement
to this prospectus will be filed.
Registration
Rights Agreement
22
