Exhibit 10.1
AMENDED AND RESTATED
SHAREHOLDERS RIGHTS AGREEMENT
This AMENDED AND RESTATED SHAREHOLDERS RIGHTS AGREEMENT (this
"Agreement") is made and entered into by and among The Ultimate Software Group,
Inc., a Delaware corporation (the "Company"), X.X. Xxxxxx Investment
Corporation, a Delaware corporation ("JPMIC"), Sixty Wall Street SBIC Fund,
L.P., a Delaware limited partnership ("Sixty Wall"), Xxxxxxx Venture Partners V
- Direct Fund L.P. ("Fund V"), The Ultimate Software Group, Ltd., a Florida
limited partnership ("USG"), Xxxxx Xxxxxx ("Xxxxxx") and Xxxx Xxxxxxxxx
("Xxxxxxxxx"). This Agreement amends and restates, effective as of June 6,
1997, the Shareholders Rights Agreement dated as of April 25, 1996 by and among
the Company, JPMIC, Sixty Wall, USG, Xxxxxx and Xxxxxxxxx.
RECITALS:
A. Concurrently with the execution and delivery of this
Agreement, Fund V is acquiring from the Company shares of Series B Convertible
Preferred Stock pursuant to the Series B Convertible Preferred Stock Purchase
Agreement of even date herewith (the "Series B Purchase Agreement").
B. USG presently holds 536,269 shares of the Company's Class
B Common Stock and 236,300 shares of the Company's Class A Common Stock,
subject to the terms and conditions of escrow agreements relating to certain of
such shares.
X. Xxxxxx and Xxxxxxxxx presently own an aggregate of 106,115
shares of the Company's Class B Common Stock, subject to the terms and
conditions of an escrow agreement relating to certain of such shares.
D. The execution and delivery of this Agreement is a
condition to the closing of the transactions contemplated by the Series B
Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing, the
parties hereto hereby agree as follows:
1. Transfer Provisions.
1.1 Definitions, For purposes of this Section 1:
(a) "Affiliate," with respect to any Person,
means any other Person that directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with,
such Person. (The term
"Affiliate" shall include without limitation (i) in the
case of JPMIC, Sixty Wall and (ii) in the case of Sixty Wall, JPMIC.)
(b) "Common Share Equivalents" means Common
Shares outstanding and Common Shares directly or indirectly issuable upon
conversion of shares of Class A Common Stock, Class B Common Stock, Class C
Common Stock and Preferred Stock (without regard to any restriction on
conversion that may be applicable to any particular holder of such stock) or
upon exercise, conversion or exchange of any other securities of the Company.
(c) "Common Shareholders" means USG, Xxxxxx and
Xxxxxxxxx, and any other Person that may become a "Common Shareholder" pursuant
to the terms of this Agreement.
(d) "Common Shares" means, collectively, the
shares of Common Stock of the Company, the shares of Class A Common Stock of
the Company, the shares of Class B Common Stock of the Company and the Shares
of Class C Common Stock of the Company, and, without duplication, any other
shares of capital stock into which such shares may be converted or for which
they may be exchanged from time to time.
(e) "Fund V Investors" means, individually
and/or collectively, as applicable, Fund V and any assignee of Fund V in
accordance with Section 1.6 below.
(f) "Investors" means, individually and/or
collectively, as applicable, JPMIC, Sixty Wall and Fund V, and any assignee of
the foregoing in accordance with Section 1.6 below.
(g) "JPM Investors" means, individually and/or
collectively, as applicable, JPMIC and Sixty Wall, and any assignee of the
foregoing in accordance with Section 1.6 below.
(h) "Person" means any individual, partnership,
joint venture, corporation, association, trust or any other entity or
organization.
(i) "Preferred Stock" means the Series A
Convertible Preferred Stock and Series B Convertible Preferred Stock of the
Company, and any other class or series of preferred stock the Company may issue
from time to time.
(j) "Rule 144 Sales" means transfers pursuant
to Rule 144 under the Securities Act (or any successor rule or regulation) that
are in compliance with the requirements of paragraphs (c), (e) and (f) of the
rule, without giving effect to paragraph (k) of the rule.
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(k) "Securities Act" means the Securities Act
of 1933, as amended.
(l) "Stock" means the Common Shares and the
Preferred Stock.
(m) "Stockholder" means, individually and
collectively, the Common Shareholder(s) and each of the Investors, and any
other Person that shall become a Common Shareholder or Investor pursuant to the
terms of this Agreement.
1.2 Restriction on Transfer. (a) No Common Shares or shares
of Preferred Stock held by a Stockholder shall be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except in accordance with or as
otherwise specifically permitted by the provisions of this Agreement.
(b) In addition to each other restriction on
transfer contained in this Agreement, except for Rule 144 Sales and a sale of
shares in a public offering pursuant to Section 2 of this Agreement, no
Stockholder shall sell, assign, transfer, pledge or otherwise encumber or
dispose of any Common Shares or shares of Preferred Stock to any Person, unless
(a) the certificates representing such shares bear appropriate legends
reflecting the restrictions on transfer contained in this Agreement, and (b)
such transferee shall have executed and delivered to the Company, as a
condition to its acquisition of Common Shares or shares of Preferred Stock, as
applicable, an appropriate document confirming that such transferee takes such
shares subject to all the terms and conditions of this Agreement. The Company
shall not transfer upon its books and records any Common Shares or shares of
Preferred Stock transferred to any Person in violation of this Agreement.
1.3 Excluded Transfers. The restrictions of this
Section 1 shall not apply to:
(a) Rule 144 Sales,
(b) Transfers by an Investor to any of its
Affiliates that, at the time of such transfer, is expected to remain an
Affiliate of such Investor for the foreseeable future,
(c) Transfers by The Ultimate Software Group,
Ltd. to all of its constituent partners in liquidation,
(d) Transfers by a Common Shareholder of Common
Shares, without consideration, to such Common
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Shareholder's spouse, siblings, parents, lineal descendant or trusts for their
benefit, and
(e) sales of shares in a public offering pursuant
to Section 2 of this Agreement;
provided that in each of cases (b) and (d), each transferee agrees in writing
to take subject to and to comply with the restrictions contained in this
Agreement. In addition, none of the restrictions on transfer contained in this
Agreement shall apply to any transfers of Stock by will, by the laws of descent
or by operation of law, except that any such transferee shall be deemed to take
such shares subject to all restrictions on transfer provided in this Agreement
applicable to the transferor. Each transferee pursuant to clause (b) above,
shall be deemed an Investor upon consummation of such transfer, and each
transferee pursuant to clause (d) above, or by will, by the laws of descent or
by operation of law, shall be deemed a Common Shareholder upon consummation of
such transfer.
1.4 First Offer Rights.
(a) General. Except as otherwise permitted under
Section 1.3 of this Agreement, a Stockholder may sell or otherwise transfer
Common Shares and/or shares of Preferred Stock, as applicable, only in
compliance with the provisions of this Section 1.4.
(b) First Offer Provisions.
(1) A Stockholder desiring to sell or
otherwise transfer Common Shares or shares of Preferred Stock in
compliance with this Section 1.4 (a "Selling Stockholder") shall
first deliver written notice to the Company (hereinafter referred to
as the "Notice of Offer") which Notice of Offer shall specify (i) the
number and class of shares of Stock owned by the Selling Stockholder
which such Selling Stockholder wishes to sell (the "Offered Shares");
(ii) the proposed cash purchase price per share for each of the
Offered Shares (the "Offer Price"); and (iii) all other terms and
conditions of the offer. The Notice of Offer shall constitute an
irrevocable offer by the Selling Stockholder to sell to the Company
and the other Stockholders the Offered Shares at the Offer Price and
on the terms hereinafter provided. Within five (5) business days of
its receipt of the Notice of Offer, the Company shall send a copy of
the Notice of Offer to each Stockholder.
(2) Within fifteen (15) days following its
receipt of the Notice of Offer, the Company may notify the Selling
Stockholder and each other
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Stockholder that it is electing to purchase all the Offered Shares
(such notification shall be referred to hereinafter as the "Company
Acceptance"). The election to purchase the Offered Shares shall be
made on behalf of the Company by those members of the Board of
Directors of the Company who have not been designated by, and are not
affiliated or associated with, the Selling Stockholder. The Company
Acceptance shall be deemed to be an irrevocable commitment to
purchase from the Selling Stockholder all the Offered Shares.
(3) If the Company does not deliver a
Company Acceptance within fifteen (15) days following its receipt of
the Notice of Offer providing for the purchase by the Company of all
of the Offered Shares, then, within fifteen (15) days following the
expiration of such fifteen-day notice period, each other Stockholder
of record shall notify the Company and the Selling Stockholder as to
the number of Offered Shares, if any, it is electing to purchase
(such notification is hereinafter referred to as the "Stockholder's
Acceptance"). If the Company does not receive a Stockholder's
Acceptance from one or more of the other Stockholders within such
period, such other Stockholders that did not deliver a Stockholder's
Acceptance shall be deemed to have declined to purchase any of the
Offered Shares. A Stockholder's Acceptance shall be deemed to be an
irrevocable commitment to purchase from the Selling Stockholder the
number of Offered Shares which such Stockholder has elected to
purchase pursuant to its Stockholder's Acceptance, subject to
allocation of Offered Shares among Stockholders accepting the Notice
of Offer as hereinafter provided.
(4) If the other Stockholders have elected
to purchase a number of Offered Shares that in the aggregate exceeds
the total number of Offered Shares, the Offered Shares shall be
allocated among such Stockholders accepting the Selling Stockholder's
offer (the "Accepting Stockholders") (a) first, to the Accepting
Stockholders as nearly as possible in proportion to the number of
Common Share Equivalents held by such Stockholders; (b) next, to
those Accepting Stockholders that elected to purchase more shares
than the number to which they are entitled under clause (a), in such
equitable manner as the Company shall determine taking into account
the relative number of Common Share Equivalents held by each
Accepting Stockholder. Clauses (a) and (b) shall be construed and
given effect in such manner that no Stockholder shall be required or
entitled to purchase a number of Offered Shares greater than the
number set forth in its Stockholder's Acceptance. If any Stockholders
shall elect to purchase any of the Offered Shares, the Company shall
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promptly notify each such Stockholder of the number of shares
allocated to it, and each such Stockholder shall be obligated to
purchase at the Offer Price such shares at a closing as set forth in
Section 1.4(b)(6).
(5) If neither the Company nor the other
Stockholders has elected to purchase all of the Offered Shares
available for purchase under this Section 1.4, the Selling
Stockholder (a) shall be under no obligation to sell any of the
Offered Shares to the Company or any other Stockholder, unless the
Selling Stockholder so elects, and (b) may, within a period of four
months from the date of the Notice of Offer, subject to the
provisions of Section 1.5, if applicable, sell at least two-thirds of
the Offered Shares to one or more third parties (each a "Third Party
Transferee"), for cash at a price per share not less than the Offer
Price and on such other terms and conditions as are no more favorable
to the proposed Third Party Transferee than those specified in the
Notice of Offer; provided, however, that if there is more than one
Third Party Transferee, the Selling Stockholder in good faith must
obtain binding and definitive commitments to purchase at least
two-thirds of the Offered Shares within such four-month period before
any sale to a Third Party Transferee of the Offered Shares may take
place. Upon any such sale, the Third Party Transferee of such shares
of Stock shall execute an agreement in form and substance
satisfactory to the Company and the Stockholders pursuant to which
such Third Party Transferee agrees that the shares of Stock it
acquired from the Selling Stockholder are subject to the provisions
of this Agreement. Any Third Party Transferee to whom shares of Stock
are transferred pursuant to and in compliance with this Section
1.4(b)(5) shall, upon consummation of such transfer, be deemed a
Stockholder, and any such Third Party Transferee of an Investor or
Common Shareholder shall, upon consummation of such transfer, be
deemed an Investor or Common Shareholder, respectively, for purposes
of this Agreement. If the Selling Stockholder does not complete the
sale of the Offered Shares within such four-month period, the
provisions of this Section 1.4 shall again apply, and no sale of
shares of Stock of the Selling Stockholder shall be made otherwise
than in accordance with the terms of this Agreement.
(6) The closing of purchases of Offered
Shares by the Company or other Stockholders pursuant to this Section
1.4 shall take place within twenty (20) days after the delivery of
the Company Acceptance or fifty (50) days after the date of the
Notice of Offer, whichever is later, at 11:00 A.M. local time at the
principal offices of the Company, or at such other date, time or
place as the parties to the sale may
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agree. At least five (5) business days prior to such closing, the
Company shall notify the Selling Stockholder(s) in writing of the
name of the purchasers and the portion of the Offered Shares to be
purchased by each. At such closing, the Selling Stockholder(s) shall
sell, transfer and deliver to each purchaser full right, title and
interest in and to the Offered Shares so purchased by such purchaser,
free and clear of all liens, security interests or adverse claims of
any kind and nature (except as otherwise set forth in this
Agreement), and shall deliver to each purchaser a certificate or
certificates representing the Offered Shares sold to such purchaser,
in each case duly endorsed for transfer or accompanied by appropriate
stock transfer powers duly endorsed with signatures guaranteed by a
commercial bank, trust company or registered broker dealer. Upon
surrender of the certificate(s) representing the Offered Shares
purchased, or to be purchased, by other Stockholders pursuant to this
Section 1.4(b), the Company shall promptly issue new certificates
representing such Offered Shares in the name(s) of such purchaser(s)
and representing the appropriate number, class and series of Stock.
Simultaneously with delivery of such certificates, each purchaser of
the Offered Shares shall deliver to the Selling Stockholder(s), by
wire transfer of immediately available funds to such bank and account
as the Selling Stockholder(s) shall designate, a cash amount equal to
the product of the Offer Price and the number of Offered Shares being
acquired by such purchaser, in full payment of the purchase price of
the Offered Shares purchased.
(c) Termination. The terms of Section 1.2(a) and
this Section 1.4 shall terminate and be of no further force or effect upon the
consummation of a firm commitment underwritten public offering of the Company's
Common Shares registered under the Securities Act.
1.5 Right to Join in Sale
(a) Anything in this Agreement to the contrary
notwithstanding (but subject to Section 1.3), if (after complying with Section
1.4 above, if such Section 1.4 is still in effect) any of USG, Xxxxx Xxxxxx
and/or Xxxx Xxxxxxxxx (each a "Selling Common Shareholder") proposes, in a
single transaction or a series of related transactions, directly or indirectly
to sell, dispose of or otherwise transfer for consideration a number of shares
of Stock (or any other securities of the Company held by such Selling Common
Shareholder) ("Offer Shares") representing, when combined with all other
transfers of Stock by such Selling Common Shareholder since the date of this
Agreement, more than 10% of the Common Share Equivalents held by such
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Selling Common Shareholder on the date hereof (as adjusted for any stock
splits, dividends, combinations or other reorganizations of the Company), such
Selling Common Shareholder shall refrain from effecting such transaction
unless, prior to the consummation thereof, each Investor shall have been
afforded the opportunity to join in such transfer on a pro rata basis, as
provided in Section 1.5(b).
(b) Prior to the consummation of any transaction
subject to this Section 1.5, the person or group that proposes to acquire any
of the Offer Shares in a transaction subject to this Section 1.5 (the "Proposed
Purchaser(s)") shall offer (the "Purchase Offer") in writing to each Investor
to acquire from such Investor the same proportion of the Common Share
Equivalents beneficially owned by such Investor as the Proposed Purchaser(s)
acquire from any of the Selling Common Shareholder(s), at the same price per
Common Share Equivalent (the "Offering Price") and on the same terms and
conditions (the "Offering Terms") as the Proposed Purchaser(s) have offered to
such Selling Common Shareholder(s). If the Proposed Purchaser(s) are acquiring
Offer Shares in a single transaction from more than one Selling Common
Shareholder or in a series of related transactions from one or more Selling
Common Shareholder(s), (a) each Investor shall have the right, at its election,
to select the transaction or transactions in which, and the Selling Common
Shareholder(s) with which, it will participate and (b) each Investor shall be
afforded the right to sell to the Proposed Purchaser(s) in such transaction or
transactions any amount of the Common Stock Equivalents beneficially owned by
such Investor that is less than or equal to the same proportion of Common Stock
Equivalents being sold by such Selling Common Shareholder(s) in such
transaction. (For the purpose of determining the Common Stock Equivalents owned
by a Selling Common Shareholder, shares held in escrow shall not be counted.)
Each Investor shall have at least twenty (20) days from the receipt of the
Purchase Offer in which to accept such Purchase Offer. If an Investor holds
shares of different series or classes of Stock, such Investor shall be entitled
to designate the series or class or classes of Stock which are to be the
subject of such acceptance and the number of shares of such series, class or
classes to be included therein. The Selling Common Shareholder(s) shall notify
the Proposed Purchaser(s) that the sale or other transfer is subject to this
Section 1.5 and shall ensure that no sale or other transfer is consummated
without the Proposed Purchaser(s) first complying with this Section 1.5.
(c) The terms of this Section 1.5 shall terminate
and be of no further force or effect (i) with respect to the JPM Investors, at
such time as the JPM Investors do not beneficially own, in the aggregate, at
least fifty percent (50%) of the Common Share Equivalents held by the JPM
Investors on the date hereof and (ii) with
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respect to the Fund V Investors, at such time as the Fund V Investors do not
beneficially own, in the aggregate, at least fifty percent (50%) of the Common
Share Equivalents held by the Fund V Investors on the date hereof.
1.6 Assignment. Each Stockholder and each Stockholder's
assignee, may, without any other party's consent, assign in whole or in part
its rights under this Section 1 to (i) any Affiliate of such Stockholder that,
at the time of such assignment, is expected to remain an Affiliate of such
Stockholder for the foreseeable future and (ii) in connection with any sale or
other transfer of at least twenty-five percent (25%) of the Common Share
Equivalents held by such Stockholder; provided that any such assignee shall
agree in writing to take subject to and to comply with the restrictions
contained in this Section 1 and shall be deemed (i) an Investor upon
consummation of such transfer or assignment by an Investor and (ii) a Common
Shareholder upon consummation of such transfer or assignment by a Common
Shareholder; and provided further that no Common Shareholder shall become an
"Investor" under this Section 1.
1.7 Amendment.
(a) The provisions of this Section 1 may be amended
only with the written consent of (i) the holders of a majority of the aggregate
Common Share Equivalents held by the JPM Investors, (ii) a majority of the
aggregate Common Share Equivalents held by the Fund V Investors, (iii) a
majority of the aggregate Common Share Equivalents held by the Common
Shareholder(s) and (iv) the Company. The observance of the provisions of this
Section 1 may be waived (either generally or in a particular instance and
either retroactively or prospectively), only by written instrument executed by
the party against whom enforcement is sought.
(b) Any such amendment or waiver shall be effective
and shall be binding upon the Company, all Investors and all Common
Shareholders, as applicable.
2. Registration Rights.
2.1 Definitions. For purposes of this Section 2:
(a) "Affiliate" has the meaning set forth in
paragraph 1.1(a) hereof.
(b) "Common Shareholders" has the meaning set
forth in paragraph 1.1(c) hereof.
(c) "Common Shares" has the meaning set forth
in paragraph 1.1(d) hereof.
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(d) "Common Stock" means shares of the Common
Stock of the Company.
(e) "Exchange Act" means the Securities
Exchange Act of 1934, as amended.
(f) "Form S-3" means such form under the
Securities Act as in effect on the date hereof or any registration form under
the Securities Act subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
(g) "Fund V Request" means a request from Fund
V or any assignee of Fund V in accordance with Section 2.13 below.
(h) "Holder(s)" means individually and/or
collectively, as applicable, the Investors and the Common Shareholders (or any
assignees thereof in accordance with Section 2.13) that hold Registrable
Securities.
(i) "Initiating Holders" means the Holders
initiating a registration request under Section 2.2.
(j) "Investors" means, individually and/or
collectively, as applicable, JPMIC, Sixty Wall and Fund V, and any assignee of
the foregoing in accordance with Section 2.13 below.
(k) "JPM Request" means a request from JPMIC
and/or Sixty Wall, and any assignee of the foregoing in accordance with Section
2.13 below.
(l) "Person" has the meaning set forth in
paragraph 1.1(g) hereof.
(m) "Preferred Stock" has the meaning set forth
in paragraph 1.1(h)
hereof.
(n) "Qualifying Investor Request" means a
request from any Holder(s) (other than Investors) that in the aggregate
possess(es) at least twenty-five percent (25%) of the Registrable Securities
outstanding as of the date of such request.
(o) "Register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement or
document.
(p) "Registrable Securities" means (1) all
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shares of Common Stock directly or indirectly issuable (without regard to any
restriction on conversion that may be applicable to any particular holder of
such stock) or issued upon conversion of the Preferred Stock (or any Common
Shares of another class issued upon conversion of the Preferred Stock)
purchased by the Investors pursuant to the Series A Convertible Preferred Stock
Purchase Agreement dated as of April 25, 1996 by and among the Company, USG,
JPMIC and Sixty Wall and the Series B Purchase Agreement, as applicable (2) all
shares of Common Stock directly or indirectly issuable (without regard to any
restriction on conversion that may be applicable to any particular holder of
such stock) or issued upon conversion of the Common Shares of another class
held by Common Shareholders on the date hereof, and (3) any Common Stock
directly or indirectly issued as (or issuable upon the conversion or exercise
of any warrant, right or other security which is directly or indirectly issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of, or upon conversion of, such Preferred Stock or Common Shares
referred to in clauses (1) and (2); provided, however, that any Registrable
Securities sold by a Person in a transaction in which such Person's rights
under this Agreement are not assigned pursuant to Section 2.13 below shall
cease to be Registrable Securities from and after the time of such sale. In the
event that at the time of a demand pursuant to Section 2.2 the Preferred Stock
is convertible only into Class B Common Stock, references to "Registrable
Securities" shall be deemed to include Class B Common Stock.
(q) The number of shares of "Registrable
Securities then outstanding" shall be determined by the number of shares of
Common Stock outstanding which are, and the number of shares of Common Stock
issuable which are, Registrable Securities.
(r) "SEC" means the Securities and Exchange
Commission.
(s) "Securities Act" means the Securities Act
of 1933, as amended.
(t) "Violation" means any of the following
statements, omissions or violations: (i) any untrue statement or alleged untrue
statement of a material fact contained in a registration statement under this
Section 2, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto or any documents filed under
state securities or "blue sky" laws in connection therewith, (ii) the omission
or alleged omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein not misleading, or (iii)
any violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated
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under the Securities Act, the Exchange Act or any state securities law.
2.2 Request for Registration.
(a) If, (i) after the earlier of (A) June 30,
1999, and (B) six (6) months after an initial public offering of the Company's
securities, the Company shall receive a written JPM Request or Fund V Request,
or (ii) after six (6) months after an initial public offering of the Company's
securities, the Company shall receive a written Qualifying Investor Request,
that the Company file a registration statement under the Securities Act, then
the Company shall, within ten (10) days of the receipt thereof, give written
notice of such request to all Holders and, subject to the limitations of
paragraph 2.2(b) below, shall file and use its best efforts to effect (as soon
as practicable and, in any event, to file within sixty (60) days of the receipt
of such request) the registration under the Securities Act of all Registrable
Securities which the Holders request to be registered within twenty (20) days
of the mailing of such notice by the Company in accordance with Section 3.4.
(b) If Initiating Holders intend to distribute
the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to this Section 2.2 and the Company shall include such information in
the written notice referred to in Paragraph 2.2(a). In such event, the right of
any Holder to include such Holder's Registrable Securities in such registration
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting
(unless otherwise mutually agreed by a majority in interest of the Initiating
Holders) to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Company as
provided in Paragraph 2.4(e)) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by a
majority-in-interest of the Initiating Holders (which underwriter or
underwriters shall be reasonably acceptable to the Company); provided, however,
that no such Holder shall be required to make any representations or warranties
except as they relate to such Holder's ownership of shares and authority to
enter into the underwriting agreement and to such Holder's intended method of
distribution, and the liability of such Holder shall be limited to an amount
equal to the net proceeds from the offering received by such Holder.
Notwithstanding any other provision of this Section 2.2, if the underwriter
advises the Initiating Holders in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the Initiating
Holders shall so advise
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the Company and the Company shall so advise all Holders holding Registrable
Securities which would otherwise be underwritten pursuant hereto, and the
number of shares of Registrable Securities that may be included in the
underwriting shall be allocated pro rata among all Holders thereof, including
the Initiating Holders, in proportion (as nearly as practicable) to the amount
of Registrable Securities of the Company owned by each such Holder; provided,
however, that if the request for registration is a JPM Request or Fund V
Request, the number of shares of Registrable Securities that may be included in
the underwriting shall be allocated (i) first to the Investors in proportion
(as nearly as practicable) to the amount of Registrable Securities owned by
each such Holder requesting inclusion of such Registrable Securities in such
underwriting, and (ii) thereafter among all other Holders thereof, in
proportion (as nearly as practicable) to the amount of Registrable Securities
of the Company owned by each such other Holder requesting inclusion of such
Registrable Securities in such underwriting.
(c) The Company shall be obligated to effect
only two (2) registrations pursuant to a JPM Request, only two (2)
registrations pursuant to a Fund V Request and only two (2) registrations
pursuant to a Qualifying Investor Request (registrations which are not
consummated shall not be counted for this purpose); provided, however, that,
subject to the following two sentences, the Company is obligated to effect as
many registrations as may be requested by Holders in the event and so long as a
registration pursuant to Form S-3 or any similar "short-form" registration
statement is available. The Company will not be required to effect (i) a Form
S-3 or "short-form" registration if such registration covers less than 2% of
the aggregate Common Share Equivalents of the Company or (ii) any other
registration under this Section 2.2 if such registration covers less than 5% of
the aggregate Common Share Equivalents of the Company. The Company will not be
required to effect a registration until the expiration of a period of six (6)
months from the effective date of the immediately previous demand registration
effected pursuant to this Section 2.2.
(d) Notwithstanding the foregoing, if the
Company shall furnish to Holders requesting a registration statement pursuant
to this Section 2.2, a certificate signed by the President of the Company
stating that, in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its shareholders
for such registration statement to be filed and it is therefore essential to
defer the filing of such registration statement, the Company shall have the
right to defer such filing for a period of not more than 120 days after receipt
of the request of the Initiating Holders; provided, however, that the Company
may not utilize this
13
right more than once in any twelve (12) month period.
2.3 Company Registration. If (but without any obligation to
do so) the Company proposes to register (including for this purpose a
registration effected by the Company for shareholders other than the Holders)
any of its stock or other securities under the Securities Act in connection
with the public offering of such securities solely for cash (other than a
registration on Form S-8 relating solely to the sale of securities to
participants in a Company stock plan or to other compensatory arrangements to
the extent includable on Form S-8, or a registration on Form S-4), the Company
shall, at such time, promptly give each Holder written notice of such
registration. Upon the written request of each Holder given within twenty (20)
days after mailing of such notice by the Company in accordance with Section
3.4, the Company shall, subject to the provisions of Section 2.8, cause to be
registered under the Securities Act all of the Registrable Securities that each
such Holder has requested to be registered.
2.4 Obligations of the Company. Whenever required under this
Section 2 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective, and,
upon the request of the Holders of a majority of the Registrable Securities
registered thereunder, keep such registration statement effective for up to one
hundred twenty (120) days or until the Holders have completed the distribution
referred to in such registration statement, whichever occurs first (but in any
event for at least any period required under the Securities Act); provided that
before filing such registration statement or any amendments thereto, the
Company will furnish to the Holders copies of all such documents proposed to be
filed.
(b) Prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement.
(c) Furnish to the Holders such numbers of
copies of such registration statement and of each amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed under
Rule 424 under the Securities Act, in
14
conformity with the requirements of the Securities Act, and such other
documents as Holders may reasonably request in order to facilitate the
disposition of Registrable Securities owned by them.
(d) Use its diligent efforts to register and
qualify the securities covered by such registration statement under such other
securities or "blue sky" laws of such states or jurisdictions as shall be
reasonably requested by the Holders, provided that the Company shall not be
required in connection therewith or as a condition thereto (i) to qualify to do
business in any state or jurisdiction where it would not otherwise be required
to qualify but for the requirements of this Paragraph 2.4(d), or (ii) to file a
general consent to service of process in any such states or jurisdictions.
(e) Use diligent efforts to cause all
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary by virtue of the Company's business or operations to enable the
seller or sellers thereof to consummate the disposition of such Registrable
Securities.
(f) In the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form (except as otherwise provided in Section
2.8), with the managing underwriter of such offering.
(g) Notify each Holder of Registrable
Securities covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing.
(h) Notify each Holder of Registrable
Securities covered by such registration statement and such Holder's
underwriters, if any, and confirm such advice in writing: (i) when the
registration statement has become effective, (ii) when any post-effective
amendment to the registration statement becomes effective and (iii) of any
request by the SEC for any amendment or supplement to the registration
statement or prospectus or for additional information.
(i) Notify each Holder of Registrable
Securities if at any time the SEC should institute or threaten to institute any
proceedings for the purpose of
15
issuing, or should issue, a stop order suspending the effectiveness of the
Registration Statement. Upon the occurrence of any of the events mentioned in
the preceding sentence, the Company will use diligent efforts to prevent the
issuance of any such stop order or to obtain the withdrawal thereof as soon as
possible. The Company will advise each Holder of Registrable Securities
promptly of any order or communication of any public board or body addressed to
the Company suspending or threatening to suspend the qualification of any
Registrable Securities for sale in any jurisdiction.
(j) Furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to this Agreement,
(i) on the date that such Registrable Securities are delivered to the
underwriters for sale in connection with a registration pursuant to this
Section 2, if such securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes effective, an
opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities
and (ii) on the date that the registration statement with respect to such
securities becomes effective, a "comfort" letter dated such date, from the
independent certified public accountants of the Company, in form and substance
as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities,
and, if such securities are being sold through underwriters, a reaffirmation of
such letter on the date that such Registrable Securities are delivered to the
underwriters for sale.
(k) As soon as practicable after the effective
date of the registration statement, and in any event within sixteen (16) months
thereafter, have "made generally available to its security holders" (within the
meaning of Rule 158 under the Securities Act) an earning statement (which need
not be audited) covering a period of at least twelve (12) months beginning
after the effective date of the registration statement and otherwise complying
with Section 11(a) of the Securities Act.
2.5 Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 2
with respect to the Registrable Securities of any selling Holder that such
Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and
16
the intended method of disposition of such securities as shall be required to
effect the registration of such Holder's Registrable Securities. If any
registration statement or comparable statement under the Securities Act refers
to an Investor or any of such Investor's Affiliates, by name or otherwise, as
the holder of any securities of the Company then, unless counsel to the Company
advises the Company that the Securities Act requires that such reference be
included in any such statement, each such holder shall have the right to
require the deletion of such reference to itself and its affiliates.
2.6 Expenses of Demand Registration. All expenses, other than
underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Section 2.2, including
without limitation all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel (selected by the Holders of a
majority of the Registrable Securities being registered) for the selling
Holders shall be borne by the Company (except that in the case of a
registration pursuant to Form S-3 or any similar "short-form" registration
statement, the Company shall bear such expenses for a maximum of four (4) such
demands); provided, however, that the Company shall not be required to pay any
of such expenses for the Holders in connection with any registration begun
pursuant to Section 2.2 if the registration request is subsequently withdrawn
at the request of the Holders of a majority of the Registrable Securities to be
registered (in which case all participating Holders shall bear such expenses
pro rata), unless the Holders of a majority of Registrable Securities then
outstanding agree to forfeit one (1) demand registration right pursuant to
Section 2.2; provided further, however, that if at the time of such withdrawal,
(a) the Holders have learned of a material adverse change in the condition
(financial or otherwise), business or prospects of the Company from that known
to the Holders at the time of their request, or (b) the filing or effecting of
the registration was delayed by or as a result of action or inaction by the
Company and there has occurred a material adverse change in marketing factors
related to the sale of Registrable Securities to the public from those existing
at the time of the Holder's request, then the Holders shall not be required to
pay any of such expenses and shall retain their rights pursuant to Section 2.2.
2.7 Expenses of Company Registration. The Company shall bear
and pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 2.3 for each Holder, including without limitation all
registration, filing, and qualification fees, printers' and accounting fees
relating or apportionable
17
thereto and the fees and disbursements of one counsel for the selling Holders
(selected by the Holders of a majority of the Registrable Securities being
registered), but excluding underwriting discounts and commissions relating to
Registrable Securities.
2.8 Underwriting Requirements. In connection with any
offering involving an underwriting of shares being issued by the Company, the
Company shall not be required under Section 2.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected
by it (provided however that the selection of the managing underwriter shall be
subject to the approval of the Investors, such approval not to be unreasonably
withheld), and then only in such quantity as will not, in the opinion of the
underwriters, jeopardize the success of the offering by the Company; provided,
however, that no Holder participating in such underwriting shall be required to
make any representations or warranties except as they relate to such Holder and
its intended method of distribution and that the liability of such a Holder
shall be limited to an amount equal to the net proceeds from the offering
received by such Holder. If the total amount of securities, including
Registrable Securities, requested by shareholders to be included in such
offering exceeds the amount of securities sold other than by the Company that
the underwriters reasonably believe compatible with the success of the
offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, that the
underwriters believe will not jeopardize the success of the offering, and with
the exception of the primary shares of the Company, the Registrable Securities
shall be given priority over any other securities, with the remaining
securities so included to be apportioned pro rata among the selling
shareholders according to the total amount of securities entitled to be
included therein owned by each selling shareholder or in such other proportions
as shall mutually be agreed to by such selling shareholders.
2.9 Indemnification. In the event any Registrable
Securities are included in a registration statement under this Section 2:
(a) To the extent permitted by law, the Company
will indemnify and hold harmless each Holder, its heirs, personal
representatives and assigns, each of such Holder's officers, directors,
employees and Affiliates, any underwriter (as defined in the Securities Act)
for such Holder and each Person, if any, who controls such Holder or
underwriter within the meaning of the Securities Act or the Exchange Act
against any losses, claims, damages or liabilities (joint or several) to which
they may become subject under the Securities Act, the Exchange Act or other
18
federal or state law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon a Violation; and
the Company will pay to each such indemnified party, as incurred, any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this Paragraph 2.9(a) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case to a particular indemnified party for any
such loss, claim, damage, liability or action to the extent that it arises out
of or is based upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection with such
registration by such indemnified party; and, provided further, that if any
amounts shall have been paid hereunder to an indemnified party and it shall be
determined by a court of competent jurisdiction in a final non-appealable
decision that such indemnified party was not entitled to indemnification under
this Paragraph 2.9(a), then such indemnified party shall (subject to Section
2.11 below) refund the amounts so paid.
(b) To the extent permitted by law, each
selling Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement, each
Person, if any, who controls the Company within the meaning of the Securities
Act, any underwriter, any other Holder selling securities in such registration
statement and any controlling Person of any such underwriter or other Holder,
against any losses, claims, damages or liabilities (joint or several) to which
any of the foregoing Persons may become subject, under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are
based upon any Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with written
information furnished by such Holder expressly for use in connection with such
registration; and each such Holder will pay, as incurred, any legal or other
expenses reasonably incurred by any Person intended to be indemnified pursuant
to this Paragraph 2.9(b), in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this Paragraph 2.9(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; and provided further, that, in no event
shall the liability of any Holder under this Paragraph 2.9(b) exceed
19
the net proceeds from the offering received by such Holder. Notwithstanding the
preceding sentence, if any amounts shall have been paid under this Paragraph
2.9(b) to any Person intended to be indemnified pursuant to this Paragraph
2.9(b) and it shall be determined by a court of competent jurisdiction in a
final non-appealable decision that such Person was not entitled to
indemnification under this Section 2.9(b), then such Person shall (subject to
Section 2.11 below) refund the amounts so paid.
(c) Promptly after receipt by an indemnified
party under this Section 2.9 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this Section
2.9, deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the fees
and expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the indemnified party under
this Section 2.9 except if, and only to the extent that, the indemnifying party
is actually prejudiced thereby; and such failure to deliver written notice to
the indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 2.9.
(d) The obligations of the Company and Holders
under this Section 2.9 shall survive the completion of any offering of
Registrable Securities in a registration statement under this Section 2, and
otherwise.
2.10 Non-Exclusive Indemnity. Any indemnity agreements
contained herein shall be in addition to any other rights to indemnification or
contribution which any indemnified party may have pursuant to law or contract
and shall remain operative and in full force and effect regardless of any
investigation made or omitted by or on behalf of any indemnified party.
2.11 Contribution. If for any reason the indemnity provided
in Section 2.9 above is unavailable, then the indemnifying party shall
contribute to the amount paid
20
or payable by the indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party on the one
hand and the indemnified party on the other (taking into consideration the fact
that the provision of the registration rights and indemnification hereunder is
a material inducement to the Investors to purchase Registrable Securities) or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law or provides a lesser sum to the indemnified party than the
amount hereinafter calculated, in such proportion as is appropriate to reflect
not only the relative benefits received by the indemnifying party on the one
hand (taking into consideration the fact that the provision of the registration
rights and indemnification hereunder is a material inducement to the Investors
to purchase Registrable Securities) and the indemnified party on the other but
also the relative fault of the indemnifying party and the indemnified party as
well as any other relevant equitable considerations. The relative fault shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the indemnifying
party or the indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. Notwithstanding anything to the contrary in this Section
2.11, no Holder shall be required, pursuant to this Section 2.11, to contribute
any amount in excess of the lesser of (x) the net proceeds received by such
indemnifying party from the sale of shares in the offering to which the losses,
claims, damages, liabilities or expenses of the indemnified party relate and
(y) the amount it would have been obligated to pay if the indemnity provided in
Section 2.9 had been available.
2.12 Reports Under the Exchange Act. If the Company shall
have filed a registration statement pursuant to the requirements of Section 12
of the Exchange Act, or a registration statement pursuant to the Securities
Act, then, with a view to making available to the Holders the benefits of Rule
144 under the Securities Act and any other rule or regulation of the SEC that
may at any time permit a Holder to sell securities of the Company to the public
without registration or pursuant to a registration on Form S-3, the Company
agrees to:
(a) make and keep public information
available, as those terms are understood and defined in Rule 144 under the
Securities Act, at all times;
21
(b) take such action, including the voluntary
registration of its Common Stock under Section 12 of the Exchange Act, as is
necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities;
(c) file with the SEC in a timely manner all
reports and other documents required of the Company under the Securities Act
and the Exchange Act; and
(d) furnish to any Holder, so long as the
Holder owns any Registrable Securities, forthwith upon request (i) a written
statement by the Company that it has complied with the reporting requirements
of Rule 144 under the Securities Act, or that it qualifies as a registrant
whose securities may be resold pursuant to Form S-3 (at any time after it so
qualifies), (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested in availing any Holder of
any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.
2.13 Assignment of Registration Rights. The rights to cause
the Company to register Registrable Securities pursuant to this Section 2 may
be assigned in whole or in part by a Holder to one or more of its Affiliates or
to one or more transferees or assignees of not less than twenty-five percent
(25%) of all Registrable Securities acquired by the Holder under the Purchase
Agreement, provided that such transferee or assignee delivers to the Company a
written instrument by which such transferee or assignee agrees to be bound by
the obligations imposed on Holders under this Agreement to the same extent as
if such transferee was a party hereto.
2.14 Limitations on Subsequent Registration Rights; Existing
Registration Rights. 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 outstanding Registrable Securities, enter into any agreement with any
holder or prospective holder of any securities of the Company which would allow
such holder or prospective holder (a) to include such securities in any
registration filed under Section 2.2, 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 holder's securities
will not reduce the amount of the Registrable Securities of the Holders which
is included or (b) to demand a registration.
2.15 "Market Stand-Off" Agreement. Each Holder and each
holder of Common Shares that is a party to this
22
Agreement hereby agrees that, during the period of ninety (90) days (or, in the
case of the Company's initial public offering, one hundred eighty (180) days)
following the effective date of a registration statement of the Company filed
under the Securities Act in connection with an underwritten offering, it shall
not, without the consent of the managing underwriter, sell or otherwise
transfer or dispose of (other than to donees who agree to be similarly bound)
any Common Shares of the Company held by it except Common Shares included in
such registration.
2.16 Amendment; Waiver. Any provision of this Section 2 may
be amended only with the written consent of the Company and the Holders of
seventy-five percent (75%) of the Registrable Securities then outstanding. The
observance of any provision of this Section 2 may be waived (either generally
or in a particular instance and either retroactively or prospectively) only
with the written consent of the party to be charged, provided that the holders
of seventy-five percent (75%) of the Registrable Securities then outstanding
may act on behalf of all such holders. Any amendment or waiver effected in
accordance with this Section 2.16 shall be binding upon each holder of
Registrable Securities at the time outstanding, each future holder of all such
securities, and the Company.
2.17 Changes in Registrable Securities. If, and as often as,
there are any changes in the Registrable Securities by way of stock split,
stock dividend, combination or reclassification, or through merger,
consolidation, reorganization or recapitalization, or by any other means,
appropriate adjustment shall be made in the provisions of this Section 2, as
may be required, so that the rights and privileges granted hereby shall
continue with respect to the Registrable Securities as so changed. Without
limiting the generality of the foregoing, the Company will require any
successor by merger or consolidation to assume and agree to be bound by the
terms of this Section 2, as a condition to any such merger or consolidation.
3. Miscellaneous.
3.1 Entire Agreement. This Agreement constitutes the full and
entire understanding and agreement among the parties with regard to the subject
matter hereof. Nothing in this Agreement, express or implied, is intended to
confer upon any person or entity, other than the parties hereto and their
respective successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
3.2 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of New York as such laws are applied to
agreements between New York
23
residents entered into and to be performed entirely within New York, whether or
not all parties hereto are residents of New York.
3.3 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.
3.4 Notices. Unless otherwise provided, any notice required
or permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon receipt by the party to be notified, by delivery or
confirmed telecopy, or three (3) days after deposit with the United States Post
Office, by registered or certified mail, postage prepaid and addressed to the
party to be notified (a) if to a party other than the Company, at such party's
address set forth at the end of this Agreement or at such other address as such
party shall have furnished the Company in writing, or, until any such party so
furnishes an address to the Company, then to and at the address of the last
holder of the shares covered by this Agreement who has so furnished an address
to the Company, or (b) if to the Company, at its address set forth at the end
of this Agreement, or at such other address as the Company shall have furnished
to the parties in writing.
3.5 Severability. Any invalidity, illegality or limitation on
the enforceability of this Agreement or any part hereof, by any party whether
arising by reason of the law of the respective party's domicile or otherwise,
shall in no way affect or impair the validity, legality or enforceability of
this Agreement with respect to other parties. If any provision of this
Agreement shall be judicially determined to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
3.6 Titles and Subtitles. The titles of the Sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
3.7 Delays or Omissions; Remedies Cumulative. It is agreed
that no delay or omission to exercise any right, power or remedy accruing to
the parties, upon any breach or default of the Company under this Agreement,
shall impair any such right, power or remedy, nor shall it be construed to be a
waiver of any such breach or default, or any acquiescence therein, or of any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. It is further
24
agreed that any waiver, permit, consent or approval of any kind or character by
a party of any breach or default under this Agreement, or any waiver by a party
of any provisions or conditions of this Agreement must be in writing and shall
be effective only to the extent specifically set forth in writing and that all
remedies, either under this Agreement, or by law or otherwise afforded to a
party, shall be cumulative and not alternative.
3.8 Attorneys' Fees. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
3.9 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
[SIGNATURE PAGES IMMEDIATELY FOLLOW THIS PAGE]
25
SIGNATURE PAGE TO
SHAREHOLDERS RIGHTS AGREEMENT
The undersigned hereby execute this Amended and Restated
Shareholders Rights Agreement dated as of the date first above written and
authorize this signature page to be attached to a counterpart of said
Agreement.
"COMPANY"
Address: The Ultimate Software Group, Inc.,
a Delaware corporation
0000 Xxxxxxxx Xxxx
Xx. Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxxx Xxxxxx By:/s/Xxxxx Xxxxxx
Fax: (000) 000-0000 -------------------------------
Name: Xxxxx Xxxxxx
Title: President
"INVESTORS"
Address: X.X. Xxxxxx Investment Corporation
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxx By:/s/ Xxxxxx X. Xxxxx
Fax: (000) 000-0000 -------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director
Address: Sixty Wall Street SBIC Fund, L.P.
By: Sixty Wall Street SBIC
00 Xxxx Xxxxxx Corporation, its general partner
Xxx Xxxx, XX 00000
Attn: Xx. X.X. Xxxxxx
Fax: (000) 000-0000 By:/s/ L.E. Franic
-------------------------------
Name: L.E. Franic
Title: Vice President
Address: Xxxxxxx Venture Partners V - Direct
Fund L.P.
Xxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000 By:/s/ Xxxx Xxxxxxxxxx
Attn: Xx. Xxxx Xxxxxxxxxx -------------------------------
Fax: (000) 000-0000 Name: Xxxx Xxxxxxxxxx
Title: Managing Director
26
SIGNATURE PAGE TO
SHAREHOLDERS RIGHTS AGREEMENT
The undersigned hereby execute this Amended and Restated
Shareholders Rights Agreement dated as of the date first above written and
authorize this signature page to be attached to a counterpart of said
Agreement.
"COMMON SHAREHOLDERS"
Address: The Ultimate Software Group, Ltd.
By: The Ultimate Software Group of
0000 Xxxxxxxx Xxxx Xxxxx Xxxxxxx, Inc., a Florida
Ft. Xxxxxxxxxx, XX 00000 corporation, its general partner
Attn: Xx. Xxxxx Xxxxxx
Fax: (000) 000-0000
By:/s/ Xxxxx Xxxxxx
-------------------------------
Name: Xxxxx Xxxxxx
Title: President
Address:
0000 Xxxxxxxx Xxxx /s/ Xxxx Xxxxxxxxx
Ft. Xxxxxxxxxx, XX 00000 ----------------------------------
Attn: Mr. Xxxx Xxxxxxxxx Xxxx Xxxxxxxxx
Fax: (000) 000-0000
Address: /s/ Xxxxx Xxxxxx
----------------------------------
0000 Xxxxxxxx Xxxx Xxxxx Xxxxxx
Ft. Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxxx Xxxxxx
Fax: (000) 000-0000
