EXHIBIT 99.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made
and entered into as of May ___, 2004, by and among The Ultimate Software Group,
Inc., a Delaware corporation (the "COMPANY"), and the investors signatory hereto
(each a "PURCHASER" and collectively, the "PURCHASERS").
This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of the date hereof among the Company and the Purchasers (the
"PURCHASE AGREEMENT").
The Company and the Purchasers hereby agree as follows:
1. DEFINITIONS. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings:
"ADVICE" shall have the meaning set forth in Section 6(d).
"BLACKOUT PERIOD" shall have the meaning set forth in Section
2(c).
"EFFECTIVENESS DATE" means, with respect to the Registration
Statement required to be filed hereunder, the earlier of (a) the 90th calendar
day following the Closing Date (150th calendar day in the event of a review by
the Commission of the Registration Statement or any document incorporated by
reference in the Registration Statement) and (b) the fifth Trading Day following
the date on which the Company is notified by the Commission that the
Registration Statement will not be reviewed or is no longer subject to further
review and comments.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in
Section 2(a).
"EVENT" shall have the meaning set forth in Section 2(b).
"EVENT DATE" shall have the meaning set forth in Section 2(b).
"FILING DATE" means the 30th Trading Day following the Closing
Date.
"HOLDER" or "HOLDERS" means the holder or holders, as the case
may be, from time to time of Registrable Securities.
"INDEMNIFIED PARTY" shall have the meaning set forth in
Section 5(c).
"INDEMNIFYING PARTY" shall have the meaning set forth in
Section 5(c).
"LOSSES" shall have the meaning set forth in Section 5(a).
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"PROCEEDING" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"PROSPECTUS" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
"REGISTRABLE SECURITIES" means the shares of Common Stock
issuable pursuant to the Purchase Agreement, together with any shares of Common
Stock issued or issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing.
"REGISTRATION STATEMENT" means the registration statements
required to be filed hereunder, including (in each case) the Prospectus,
amendments and supplements to the registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference in
the registration statement.
"RULE 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"RULE 415" means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"RULE 424" means Rule 424 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
2. REGISTRATION.
(a) On or prior to the Filing Date, the Company shall prepare
and file with the Commission the Registration Statement covering the resale of
all of the Registrable Securities for an offering to be made on a continuous
basis pursuant to Rule 415. The Registration Statement required hereunder shall
be on Form S-3 (except if the Company is not then eligible to register for
resale the Registrable Securities on Form S-3, in which case the Registration
shall be on another appropriate form in accordance herewith). The Registration
Statement required hereunder shall contain (except if otherwise directed in
writing by the Holders or if otherwise required by applicable law or by the
Commission) the "PLAN OF DISTRIBUTION" attached hereto as ANNEX A. The Company
shall use commercially reasonable efforts to cause the Registration Statement to
become effective and remain effective as provided herein. The Company shall use
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its commercially reasonable efforts to cause the Registration Statement to be
declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event not later than the Effectiveness Date, and
shall use its commercially reasonable efforts to keep the Registration Statement
continuously effective under the Securities Act until the date when all
Registrable Securities covered by the Registration Statement have been sold or
may be sold without volume restrictions pursuant to Rule 144(k) as determined by
the counsel to the Company pursuant to a written opinion letter to such effect,
addressed and reasonably acceptable to the affected Holders (the "EFFECTIVENESS
PERIOD").
(b) If during the Effectiveness Period: (i) a Registration
Statement is not filed on or prior to the Filing Date (if the Company files a
Registration Statement without affording the Holder the reasonable opportunity
to review and comment on the same as required by Section 3(a), the Company shall
not be deemed to have satisfied this clause (i)), or (ii) the Company fails to
file with the Commission a request for acceleration in accordance with Rule 461
promulgated under the Securities Act, within five Trading Days of the date that
the Company is notified (orally or in writing, whichever is earlier) by the
Commission that a Registration Statement will not be "reviewed," or not subject
to further review, or (iii) prior to the date when such Registration Statement
is first declared effective by the Commission, the Company fails to file a
pre-effective amendment and otherwise respond in writing to comments made by the
Commission in respect of such Registration Statement within thirty Trading Days
after the receipt of comments by or notice from the Commission that such
amendment is required in order for a Registration Statement to be declared
effective, or (iv) a Registration Statement filed or required to be filed
hereunder is not declared effective by the Commission on or before the
Effectiveness Date, or (v) after a Registration Statement is first declared
effective by the Commission, it ceases for any reason to remain continuously
effective as to all Registrable Securities for which it is required to be
effective, or the Holders are not permitted to utilize the Prospectus therein to
resell such Registrable Securities, including during the pendency of a Blackout
Period, for in any such cases twenty-five Trading Days (which need not be
consecutive days) in the aggregate during any 12-month period (any such failure
or breach being referred to as an "EVENT," and for purposes of clause (i) or
(iv) the date on which such Event occurs, or for purposes of clause (ii) the
date on which such five Trading Day period is exceeded, or for purposes of
clauses (iii) the date which such thirty Trading Day period is exceeded, or for
purposes of clause (v) the date on which such twenty-five Trading Day period is
exceeded being referred to as "EVENT DATE"), then in addition to any other
rights the Holders may have hereunder or under applicable law: (x) on each such
Event Date the Company shall pay to each Holder an amount in cash, as liquidated
damages and not as a penalty, equal to 1% of the aggregate purchase price paid
by such Holder pursuant to the Purchase Agreement for any Registrable Securities
then held by such Holder; and (y) on each monthly anniversary of each such Event
Date (if the applicable Event shall not have been cured by such date) until the
applicable Event is cured, the Company shall pay to each Holder an amount in
cash, as liquidated damages and not as a penalty, equal to 1% of the aggregate
purchase price paid by such Holder pursuant to the Purchase Agreement for any
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Registrable Securities then held by such Holder (pro-rated for partial periods
on a PER DIEM basis). If the Company fails to pay any liquidated damages
pursuant to this Section in full within seven days after the date payable, the
Company will pay interest thereon at a rate of 10% per annum (or such lesser
maximum amount that is permitted to be paid by applicable law) to the Holder,
accruing daily from the date such liquidated damages are payable until such
amounts, plus all such interest thereon, are paid in full.
(c) The Company shall have the right to suspend the
effectiveness of any Registration Statement during the pendency of any "Blackout
Period," as defined below. The Company shall notify the Holders of the
commencement of any Blackout Period, and during the pendency of such Blackout
Period no Holder shall sell, convey, dispose of or otherwise transfer in any
manner any Registrable Securities pursuant to the Registration Statement. The
Company acknowledges and agrees that, following the end of the twenty-five day
grace period set forth in Section 2(b)(v), liquidated damages will accrue and be
payable to the Holders pursuant to Section 2(b) notwithstanding the pendency of
a Blackout Period until the Company notifies the Holders that the Blackout
Period has terminated. For purposes of this Agreement, "BLACKOUT PERIOD" means
any of the following:
(i) any period of time (not to exceed 120 days during
any twelve (12) consecutive months) after the Company has determined to
proceed with a Securities Act registration of any of its securities and
is diligently proceeding to complete such registration, until 90 days
following the consummation of any offering contemplated by such
registration;
(ii) any period of time (not to exceed 90 days during
any period of twelve (12) consecutive months) when the Company is in
possession of material, non-public information that the Company would
not be required to disclose publicly in the absence of any Securities
Act registration of its securities, and the disclosure of which would
be materially injurious to the Company, or
(iii) any period of time (not to exceed 120 days
during any period of twelve (12) consecutive months) when the Company
is engaged in, or has determined to engage in and is proceeding
diligently with, any program for the purchase of, or any tender offer
or exchange offer for, any of its securities, and determines, on advice
of nationally recognized independent U.S. counsel knowledgeable in such
matters, that such program or offer and the requested registration may
not proceed concurrently without violating Regulation M under the
Exchange Act.
3. REGISTRATION PROCEDURES
In connection with the Company's registration obligations
hereunder, the Company shall:
(a) Not less than three Trading Days prior to the filing of
the Registration Statement or any related Prospectus or any amendment or
supplement thereto, the Company shall, (i) furnish to the Holders copies of all
such documents proposed to be filed (including documents incorporated or deemed
incorporated by reference to the extent requested by such Person) which
documents will be subject to the reasonable review of such Holders, and (ii)
cause its officers and directors, counsel and independent certified public
accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of counsel to conduct a reasonable investigation within the
meaning of the Securities Act. The Company shall not file the Registration
Statement or any such Prospectus or any amendments or supplements thereto to
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which the Holders of a majority of the Registrable Securities shall reasonably
object in good faith.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep the
Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period; (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement, and as so
supplemented or amended to be filed pursuant to Rule 424; (iii) respond as
promptly as reasonably possible to any comments received from the Commission
with respect to the Registration Statement or any amendment thereto and, as
promptly as reasonably possible, upon request, provide the Holders true and
complete copies of all correspondence from and to the Commission relating to the
Registration Statement; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by the Registration Statement
during the applicable period in accordance with the intended methods of
disposition by the Holders thereof set forth in the Registration Statement as so
amended or in such Prospectus as so supplemented.
(c) Notify the Holders of Registrable Securities to be sold as
promptly as reasonably possible (and, in the case of (i)(A) below, not less than
two Trading Days prior to such filing) and (if requested by any such Person)
confirm such notice in writing promptly following the day (i)(A) when a
Prospectus or any Prospectus supplement or post-effective amendment to the
Registration Statement is proposed to be filed; (B) when the Commission notifies
the Company whether there will be a "review" of the Registration Statement and
whenever the Commission comments in writing on the Registration Statement (the
Company shall upon request provide true and complete copies thereof and all
written responses thereto to each of the Holders); and (C) with respect to the
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the Commission or any other Federal or state
governmental authority during the Effectiveness Period of the Registration
Statement for amendments or supplements to the Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the
Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose known to the Company; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in the Registration Statement ineligible for
inclusion therein or any statement made in the Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
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(d) Use its commercially reasonable efforts to avoid the
issuance of, or, if issued, obtain the withdrawal of (i) any order suspending
the effectiveness of the Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.
(e) Furnish to each Holder, without charge, at least one
conformed copy of the Registration Statement and each amendment thereto,
including financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference to the extent requested by such
Person, and all exhibits to the extent requested by such Person (including those
previously furnished or incorporated by reference) promptly after the filing of
such documents with the Commission.
(f) Promptly deliver to each Holder, without charge, as many
copies of the Prospectus or Prospectuses (including each form of prospectus) and
each amendment or supplement thereto as such Persons may reasonably request in
connection with resales by the Holder of Registrable Securities. The Company
hereby consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders in connection with the offering and sale
of the Registrable Securities covered by such Prospectus and any amendment or
supplement thereto, except after the giving on any notice pursuant to Section
3(c).
(g) Prior to any resale of Registrable Securities by a Holder,
use its commercially reasonable efforts to register or qualify or cooperate with
the selling Holders in connection with the registration or qualification (or
exemption from the Registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or
things reasonably necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by the Registration Statement; PROVIDED, that
the Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file a
general consent to service of process in any such jurisdiction.
(h) If requested by the Holders, reasonably cooperate with the
Holders to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be delivered to a transferee pursuant to
the Registration Statement, which certificates shall be free, but only to the
extent permitted by the Purchase Agreement, of all restrictive legends, and to
enable such Registrable Securities to be in such denominations and registered in
such names as any such Holders may request.
(i) Upon the occurrence of any event contemplated by Section
3(c)(v), as promptly as reasonably possible, prepare a supplement or amendment,
including a post-effective amendment, to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither the Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
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a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(j) Comply in all material respects with all applicable rules
and regulations of the Commission.
(k) The Company may require each selling Holder, as a
condition to the inclusion of such Holder's Registrable Securities in the
Registration Statement, to furnish to the Company a certified statement as to
the number of shares of Common Stock beneficially owned by such Holder and, if
required by the Commission, the person thereof that has voting and dispositive
control over the Shares and such other information as the Company reasonably
requests in connection with the preparation of the Registration Statement.
4. REGISTRATION EXPENSES. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Trading Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities), (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company,
(v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. Other than as set forth in Section
5(c) hereof, the Holders shall be solely responsible for all fees and expenses
of any counsel retained by any of them, and will bear all underwriting discounts
and commissions and agents' commissions, if any.
5. INDEMNIFICATION
(a) INDEMNIFICATION BY THE COMPANY. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, the officers, directors, trustees agents and employees of each of
them, each Person who controls any such Holder (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, trustees, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
reasonable attorneys' fees) and expenses (collectively, "Losses"), as incurred,
to the extent arising out of or relating to any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
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or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, except to the extent, but only to the extent,
that (1) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information relates to
such Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved by such Holder expressly for
use in the Registration Statement, such Prospectus or such form of Prospectus or
in any amendment or supplement thereto (it being understood that each Holder has
approved Annex A hereto for this purpose) or (2) in the case of an occurrence of
an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder
of an outdated or defective Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated or defective and prior to the
receipt by such Holder of the Advice or (3) any use of the Registration
Statement during any Blackout Period. The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding of which the
Company is aware in connection with the transactions contemplated by this
Agreement.
(b) INDEMNIFICATION BY HOLDERS. Each Holder shall, severally
and not jointly, indemnify and hold harmless the Company, its directors,
officers, agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling Persons, to
the fullest extent permitted by applicable law, from and against all Losses, as
incurred, to the extent arising out of or based upon: (x) such Holder's failure
to comply with the prospectus delivery requirements of the Securities Act or (y)
any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus, or any form of prospectus, or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein not misleading
(i) to the extent, but only to the extent, that such untrue statement or
omission is contained in any information so furnished in writing by such Holder
to the Company specifically for inclusion in the Registration Statement or such
Prospectus or (ii) to the extent that (1) such untrue statements or omissions
are based solely upon information regarding such Holder furnished in writing to
the Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
by such Holder expressly for use in the Registration Statement (it being
understood that the Holder has approved Annex A hereto for this purpose), such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
or (2) in the case of an occurrence of an event of the type specified in Section
3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus
after the Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the Advice or
(3) any use of the Registration Statement during any Blackout Period. In no
event shall the liability of any selling Holder hereunder be greater in amount
than the dollar amount of the net proceeds received by such Holder upon the sale
of the Registrable Securities giving rise to such indemnification obligation.
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(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity hereunder
(an "INDEMNIFIED PARTY"), such Indemnified Party shall promptly notify the
Person from whom indemnity is sought (the "INDEMNIFYING PARTY") in writing, and
the Indemnifying Party shall have the right to assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses incurred in connection with
defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure
shall have prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; (2) the Indemnifying Party shall have
failed promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and the reasonable fees and expenses of one
separate counsel shall be at the expense of the Indemnifying Party). In no event
shall any Indemnifying Party be liable or responsible for the fees or expenses
of more than one law firm for all the Indemnified Parties. The Indemnifying
Party shall not be liable for any settlement of any such Proceeding effected
without its written consent, which consent shall not be unreasonably withheld.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
All reasonable fees and expenses of the Indemnified Party
(including reasonable fees and expenses to the extent incurred in connection
with investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten Trading Days of written notice thereof and presentation of
reasonable evidence thereof to the Indemnifying Party; PROVIDED, that the
Indemnified Party shall promptly reimburse the Indemnifying Party for that
portion of such fees and expenses applicable to such actions for which such
Indemnified Party is not entitled to indemnification hereunder, determined based
upon the relative faults of the parties.
(d) CONTRIBUTION. If a claim for indemnification under Section
5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public policy
or otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
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The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall
be required to contribute, in the aggregate, any amount in excess of the amount
by which the proceeds actually received by such Holder from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission, except in
the case of fraud by such Holder.
The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.
6. MISCELLANEOUS
(a) REMEDIES. In the event of a breach by the Company or by a
Holder of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
(b) NO PIGGYBACK ON REGISTRATIONS. Except as set forth on
SCHEDULE 3.1(V) of the Purchase Agreement, neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto) may
include securities of the Company in the Registration Statement other than the
Registrable Securities, and the Company shall not after the date hereof enter
into any agreement providing any right to any of its security holders to include
securities of the Company in the Registration Statement. Except as set forth in
the SEC Reports or on Schedule 6(b), no Person has any right to cause the
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Company to effect the registration under the Securities Act of any securities of
the Company. The Company shall not file any other registration statement until
after the Effective Date.
(c) COMPLIANCE. Each Holder covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
the Registration Statement.
(d) DISCONTINUED DISPOSITION. Each Holder agrees by its
acquisition of such Registrable Securities that, upon receipt of a notice from
the Company of the occurrence of any event of the kind described in Section 3(c)
or the pendency of any Blackout Period, such Holder will forthwith discontinue
disposition of such Registrable Securities under the Registration Statement
until such Holder's receipt of the copies of the supplemented Prospectus and/or
amended Registration Statement or until it is advised in writing (the "ADVICE")
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.
(e) PIGGY-BACK REGISTRATIONS. If at any time during the
Effectiveness Period there is not an effective Registration Statement covering
all of the Registrable Securities and the Company shall determine to prepare and
file with the Commission a registration statement relating to an offering for
its own account or the account of others under the Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents relating to equity securities to
be issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with the stock option or other employee
benefit plans, then the Company shall send to each Holder a written notice of
such determination and, if within fifteen days after the date of such notice,
any such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered, subject to customary underwriter cutbacks
(without regard to whether any other shareholder or the Company is cut back) and
subject to any other registration rights granted to third parties by the Company
prior to the date hereof.
(f) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and each Holder of the then outstanding Registrable Securities.
(g) NOTICES. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number provided for below prior to 6:30 p.m. (New York City time) on a
Trading Day, (ii) the Trading Day after the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile number provided for
below later than 6:30 p.m. (New York City time) on any date and earlier than
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11:59 p.m. (New York City time) on such date, (iii) the Trading Day following
the date of mailing, if sent by nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be delivered and
addressed as set forth in the Purchase Agreement.
(h) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. Each Holder may
assign their respective rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.
(i) EXECUTION AND COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and, all of which taken together shall constitute one and the
same Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(j) GOVERNING LAW. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York, New York. Each
party hereto hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in the City of New York, New York for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of the any of this Agreement), and hereby irrevocably waives,
and agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court or that such suit,
action or proceeding is improper. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by delivering a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of this Agreement,
then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its attorneys fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.
(k) CUMULATIVE REMEDIES. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
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(l) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
(m) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(n) INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS.
The obligations of each Purchaser hereunder is several and not joint with the
obligations of any other Purchaser hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.
(o) LIMITATION OF LIABILITY. Notwithstanding anything herein
to the contrary, the Company acknowledges and agrees that all liabilities of
Janus Investment Fund ("JANUS"), a registered investment company, arising
directly or indirectly, under this Agreement, of any and every nature
whatsoever, shall be satisfied solely out of the assets of Janus, and that no
trustee, officer or holder of shares of beneficial interest of Janus shall be
personally liable for any liabilities of Janus. The Declaration of Trust of
Janus, which is on file with the Commonwealth of Massachusetts, describes the
responsibilities and liabilities of such parties.
*************************
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IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.
THE ULTIMATE SOFTWARE GROUP, INC.
By: /s/
--------------------------------
Name:
Title:
[PURCHASERS' SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.
NAME OF INVESTING ENTITY
----------------------------------------------------
By: /s/
------------------------------------------------
Name:
Title:
ADDRESS FOR NOTICE
c/o:
-----------------------------------------------
Street:
--------------------------------------------
City/State/Zip:
------------------------------------
Attention:
-----------------------------------------
Tel:
-------------------------------------------
Fax:
-------------------------------------------
Email:
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ANNEX A
PLAN OF DISTRIBUTION
The Common Stock is being registered to permit the resale of such
securities by the holders of such securities from time to time after the date of
this prospectus. We will not receive any of the proceeds from the sale by the
Selling Stockholders of the Common Stock. We will bear the fees and expenses
incurred in connection with our obligation to register the Common Stock. These
fees and expenses include registration and filing fees, printing expenses and
fees and disbursements of our counsel and independent accountants. However, the
Selling Stockholders will be solely responsible for all fees and expenses of any
counsel retained by any of them and all underwriting discounts and commissions
and agent's commissions, if any. The Selling Stockholders may offer and sell
Common Stock from time to time in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined at
the time of sale or at negotiated prices.
Such sales may be effected by a variety of methods, including
the following:
o In market transactions on the NASDAQ National Market;
o In privately negotiated transactions;
o Through the writing of options;
o In a block trade in which a broker-dealer will attempt to
sell a block of securities as agent but may position and
resell a portion of the block as principal to facilitate
the transaction;
o Through broker-dealers, which may act as agents or
principals.
o Directly to one or more purchasers;
o Through agents; or
o In any combination of the above or by any other legally
available means.
In connection with the sales of Common Stock, the Selling Stockholders
may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the offered securities, short and deliver the Common
Stock to close out such short positions, or loan or pledge the Common Stock to
broker-dealers that in turn may sell such securities.
If a material arrangement with any underwriter, broker, dealer or other
agent is entered into for the sale of any Common Stock through a secondary
distribution or a purchase by a broker or dealer, or if other material changes
are made in the plan of distribution of the Common Stock, a prospectus
supplement or post-effective amendment will be filed, if necessary, under the
Securities Act disclosing the material terms and conditions of such arrangement.
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To our knowledge, there are currently no plans, arrangements or
understandings between any Selling Stockholders and any underwriter,
broker-dealer or agent regarding the sale of the Common Stock by the Selling
Stockholders. Selling Stockholders may decide to sell only a portion of the
Common Stock offered by them pursuant to this prospectus or may decide not to
sell any Common Stock offered by them pursuant to this prospectus. In addition,
any Selling Stockholders may transfer, devise or give the Common Stock by other
means not described in this prospectus. Any Common Stock covered by this
prospectus that qualifies for sale pursuant to Rule 144 or Rule 144A of the
Securities Act may be sold under Rule 144 or Rule 144A rather than pursuant to
this prospectus.
The Selling Stockholders may from time to time pledge or grant a
security interest in some or all of the shares of Common Stock owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of Common Stock from
time to time under this prospectus, or under an amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933
amending the list of Selling Stockholders to include the pledgee, transferee or
other successors in interest as Selling Stockholders under this prospectus.
The Selling Stockholders and any underwriters, broker-dealers or agents
participating in the distribution of the Common Stock may be deemed to be
"underwriters" within the meaning of the Securities Act, and any profit on the
sale of Common Stock by the Selling Stockholders and any commissions received by
any such underwriters, broker-dealers or agents may be deemed to be underwriting
commissions under the Securities Act. If any Selling Stockholder were deemed to
be an underwriter, that Selling Stockholder may be subject to statutory
liabilities, including, but not limited to, those under Sections 11, 12 and 17
of the Securities Act and Rule 10b-5 under the Exchange Act.
The Selling Stockholders and any other person participating in the
distribution will be subject to the applicable provisions of the Exchange Act
and the rules and regulations under the Exchange Act, including, without
limitation, Regulation M, which may limit the timing of purchases and sales of
any of the Common Stock by the Selling Stockholders and any other relevant
person. Furthermore, Regulation M may restrict the ability of any person engaged
in the distribution of the Common Stock to engage in market-making activities
with respect to the Common Stock. All of the above may affect the marketability
of the Common Stock and the ability of any person or entity to engage in
market-making activities with respect to the Common Stock.
Under the securities laws of certain states, the Common Stock may be
sold in those states only through registered or licensed brokers or dealers. In
addition, in certain states the Common Stock may not be sold unless the Common
Stock has been registered or qualified for sale in the state or an exemption
from registration or qualification is available and complied with. Each Selling
Stockholder should consult its counsel regarding the application of the states'
Blue Sky or securities law in connection with sales of the Common Stock.
We have agreed to indemnify the Selling Stockholders against certain
civil liabilities, including certain liabilities arising under the Securities
Act, and the Selling Stockholders will be entitled to contribution from us in
connection with those liabilities. The Selling Stockholders will indemnify us
against certain civil liabilities, including liabilities arising under the
Securities Act, and we will be entitled to contribution from the Selling
Stockholders in connection with those liabilities.
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