Exhibit 10.34
STOCK PURCHASE AGREEMENT
DATED AS OF NOVEMBER 16, 1994
BETWEEN
INFORMATION MANAGEMENT ASSOCIATES, INC.
AND
WAND/IMA INVESTMENTS, L.P.
STOCK PURCHASE AGREEMENT
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STOCK PURCHASE AGREEMENT dated as of November 16, 1994 by and between
WAND/IMA INVESTMENTS, L.P. (the "Purchaser") and INFORMATION MANAGEMENT
ASSOCIATES, INC. (the "Company").
WHEREAS, the Purchaser is purchasing pursuant to this Agreement 111,111
newly issued shares of Common Stock on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto hereby agree as follows:
ARTICLE 1. TRANSFER OF SHARES AND RELATED MATTERS
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1.1 The Sale. Subject to the terms and conditions of this Agreement, the
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Company hereby agrees to issue and sell to the Purchaser, and the Purchaser
hereby agrees to purchase from the Company, on the date of the Closing (as
hereinafter defined), 111,111 newly issued shares (the "Shares") of the common
stock, no par value, of the Company ("Common Stock") free and clear of all
liens, claims, liabilities, restrictions or other encumbrances at a purchase
price of $9.00 per share (the "Purchase Price").
1.2 Delivery of Shares. On the Closing Date (as hereinafter defined), the
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Company will deliver to the Purchaser, against payment of the Purchase Price,
certificates representing the Shares.
ARTICLE 2. CLOSING
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The closing for the consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of LeBoeuf, Lamb,
Xxxxxx & XxxXxx, Hartford, Connecticut, at 10:00 a.m. on November 16, 1994 or at
such other time or place as the parties hereto shall mutually agree (the
"Closing Date").
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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The Company hereby represents and warrants to the Purchaser as follows:
3.1 Authority and Validity. The execution, delivery and performance of
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this Agreement and the consummation of all the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action on the
part of the Company. This Agreement has been duly and validly executed and
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delivered by the Company and is the valid and binding obligation of the Company,
enforceable in accordance with its terms, except as such enforcement may be
affected or limited by bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by applicable
principles of equitable remedies. Neither the execution, delivery and
performance of this Agreement, nor the consummation of the transactions
contemplated hereby or compliance by the Company with any of the provisions
hereof will (i) conflict with or result in a breach of any material provision of
its Certificate of Incorporation or By-laws; (ii) violate or conflict with the
terms of any material agreement to which the Company is a party or by which it
is bound; or (iii) violate any law, statute, rule or regulation or judgement,
order, writ, injunction or decree of any court, administrative agency or
governmental body applicable to the Company.
3.2 Organization and Standing; Corporate Power. The Company is a
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corporation duly organized and existing under the laws of the State of
Connecticut and is in good standing under such laws. The Company has requisite
corporate power and authority to own, lease and operate its properties and
assets, and to carry on its business as presently conducted. The Company has
all requisite corporate power and authority to enter into and perform all of its
obligations under this Agreement.
3.3 Subsidiaries. On the date hereof, the Company has one wholly owned
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subsidiary, Information Management Associates Limited, a United Kingdom company,
and no other subsidiaries.
3.4 Qualification. Attached as Schedule 3.4 is a true and complete list
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of all jurisdictions in which the Company is duly qualified as a foreign
corporation authorized to do business, or has a pending application for such
qualification. The Company is in good standing in each such jurisdiction in
which it is so qualified, except for Massachusetts and Illinois where the
Company will be in good standing after the filing of delinquent annual reports.
The jurisdictions identified in Schedule 3.4 are the only jurisdictions in which
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the nature of the Company's activities or the character of the properties it
owns or leases makes such qualification necessary, other than those
jurisdictions in which the failure to be so qualified would not have a material
adverse effect on the financial condition, assets, liabilities (absolute,
accrued, contingent or otherwise), reserves, business, operations or prospects
of the Company.
3.5 Capitalization. The authorized capital stock of the Company is
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5,000,000 shares of common stock, of which 1,759,537 shares were issued and
outstanding as of November 10, 1994. All issued and outstanding shares have
been duly authorized and validly issued, are fully paid and non-assessable.
When authorized and
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issued, the Shares will not be subject to any preemptive rights or rights of
first refusal. The Shares, when issued in compliance with the provisions of
this Agreement, will be validly issued, fully paid and non-assessable and will
be free of any liens or encumbrances; provided, however, that the Shares will be
subject to restrictions on transfer imposed under applicable state and federal
securities laws. Set forth on Schedule 3.5 attached hereto is a list, as of
November 10, 1994, of all holders of outstanding Common Stock of the Company and
all outstanding warrants, stock options and rights to purchase Common Stock.
Other than as set forth in Schedule 3.5, the Company has no outstanding shares
of Common Stock and no outstanding warrants, stock options or rights to purchase
Common Stock, except that the Company has offered up to approximately 40,000
shares of Common Stock to certain individuals at a price of $9.00 per share,
which shares are not described in Schedule 3.5. Said offering of up to
approximately 40,000 shares of Common Stock is referred to herein as the
"Simultaneous Offering".
3.6 Indebtedness of the Company. Schedule 3.6 correctly describes all
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secured and unsecured indebtedness of the Company for borrowed money outstanding
or for which the Company has commitments, on the date of this Agreement. The
Company is not in default with respect to any such indebtedness or any
instrument or agreement relating thereto.
3.7 Disclosure. Neither this Agreement, the Schedules hereto, nor the
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officers' certificates delivered in connection with the Closing contains (in
each case, as of its date) any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
or therein not misleading.
3.8 Intellectual Property. The Company owns or has valid rights to use
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all Intellectual Property Rights used in or necessary to conduct the Company's
business as heretofore conducted or planned to be conducted in the foreseeable
future, except for Intellectual Property Rights which are not material to the
conduct of the Company's business.
3.9 Environmental Matters. The Company is in compliance with the
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provisions of all federal, state and local laws relating to pollution or
protection of the environment applicable to it or to real property owned or
leased by it or to the ownership, use, operation or occupancy thereof, except
for violations or liabilities which individually or in the aggregate could not
reasonably be expected to have a material adverse effect on the Company.
Neither the Company nor any Person has engaged in any activity in violation of
any provision of any federal, state or local law relating to pollution or
protection of the environment, which violation could reasonably be expected to
have a material
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adverse effect on the Company. The Company has no liability, absolute or
contingent, under any federal, state or local law relating to pollution or
protection of the environment, except for liabilities which individually or in
the aggregate could not reasonably be expected to have a material adverse effect
on the Company.
3.10 Financial Statements. The audited consolidated balance sheet and
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related statement of operations of the Company as of December 31, 1993 and the
unaudited consolidated balance sheet and related statement of operations of the
Company as of June 30, 1994 (collectively, the "Financial Statements"), which
have been provided to the Purchaser, fairly present the Company's assets,
liabilities, financial position and results of operations on a consolidated
basis as of the respective dates of such statements and for the periods then
ended, and were prepared in accordance with generally accepted accounting
principles, consistently applied (subject, in the case of interim statements, to
normal year-end adjustments). As of the date of this Agreement, there is no
fact (other than any matters of a general economic or political nature which do
not affect the Company uniquely) known to the Company which materially adversely
affects or in the future may (so far as the Company can now reasonably foresee)
materially adversely affect the financial condition, assets, liabilities
(absolute, accrued, contingent or otherwise), reserves, business operations or
prospects of the Company which has not been set forth in this Agreement or the
Schedules hereto.
3.11 Changes. Except as set forth in Schedule 3.11 hereto, since December
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31, 1993, there has not been:
(a) any change in the Company's assets, liabilities, condition (financial
or otherwise) or business which individually or in the aggregate is materially
adverse to the Company, or which is not in the ordinary course of business;
(b) any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting the Company's business or assets or other
properties;
(c) any issuance or sale by the Company of any shares of its capital stock
or other securities; and
(d) any other event or condition which has materially and adversely
affected the Company's business.
3.12 Litigation, Etc. Except as set forth on Schedule 3.12, there is no
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litigation or government investigation or proceeding either existing, pending
or, to the Company's knowledge, threatened against the Company or affecting any
of the Company's properties or assets, in any court or before or by any
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federal, state, municipal or other governmental authority, or which affects this
Agreement or any action taken or to be taken by the Company hereunder.
3.13 Compliance with Other Instruments, etc. The Company is not in
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violation of any term of its Certificate of Incorporation or By-Laws, and the
Company is not in violation of any term of any agreement or instrument to which
it is a party or by which it is bound or any term of any applicable law,
ordinance, rule or regulation of any governmental authority or any term of any
applicable order, judgment or decree of any court, arbitrator or governmental
authority, the consequences of which violation could reasonably be expected to
have a material adverse effect on the financial condition, assets, liabilities
(absolute, accrued, contingent or otherwise), reserves, business, operations or
prospects of the Company.
3.14 Use of Proceeds. The Company will use the proceeds from the sale of
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the Shares for general corporate purposes.
3.15 No Violations of Securities Laws. Subject to the accuracy of the
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Purchaser's representations in Section 4 hereof, the offer and sale of the
Shares hereunder and the offer and sale of Common Stock in connection with the
Simultaneous Offering are and will be exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933 (the "Securities
Act") and are and will be exempt from the registration, permit or qualification
requirements of all applicable state securities laws or such requirements have
been or will be satisfied. The Company has not offered or sold the Shares to
anyone other than the Purchaser and certain offerees in connection with the
Simultaneous Offering. Neither the Company nor any person acting on its behalf
has taken any action which would require the registration of the Shares under
Section 5 of the Act, including, without limitation, engaging in any form of
general solicitation.
3.16 Brokers or Finders Fees, Etc. No agent, broker, investment banker,
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person or firm acting on behalf of the Company or under its authority is or will
be entitled to any broker's or finder's fee or any other commission or similar
fee in connection with the sale of the Shares contemplated hereby.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
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The Purchaser hereby represents and warrants to the Company as follows:
4.1 Investment. The Purchaser is acquiring the Shares for investment for
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its own account and not with a view to, or for resale in connection with, any
distribution thereof. The Purchaser understands that the Shares have not been
registered under the
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Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of the Purchaser's investment intent as expressed herein.
4.2 Resale. The Purchaser acknowledges that the Shares must be held
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indefinitely unless the Shares are subsequently registered under the Securities
Act or an exemption from such registration is available. Each certificate
representing (i) the Shares, and (ii) any other securities issued in respect of
the Shares upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall (unless otherwise permitted by law) be
stamped or otherwise imprinted with a legend in the following form (in addition
to any legend required under applicable state securities laws, rules or
regulations):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER SAID ACT EXCEPT PURSUANT TO AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
4.3 Accredited Investor. Each and every person or entity having an
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ownership interest in the Purchaser, other than Xxxxxxx X. Xxxxxxxxx, is an
"accredited investor" as that term is used in Rule 501 promulgated under the
Securities Act. Xxxxxxx X. Xxxxxxxxx is a sophisticated investor having such
knowledge and experience in financial and business matters that he is capable of
evaluating the merits and risks of an investment in the Shares. The Purchaser
and Xxxxxxx X. Xxxxxxxxx have received and had a reasonable opportunity to
review information meeting the requirements of Rule 502(b)(2) promulgated under
the Securities Act, including, without limitation, the information specified in
Schedule 3.11 attached hereto.
4.4 Access to Information. The Purchaser acknowledges that each of
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the Purchaser and Xxxxxxx X. Xxxxxxxxx has received such information and made
such investigation and analysis as it or he deems appropriate of the business
and prospects of the Company and has been afforded an opportunity to meet with
and ask questions of and receive answers from, management of the Company.
ARTICLE 5. CONDITIONS TO OBLIGATIONS OF THE PURCHASER
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The obligations of the Purchaser to perform this Agreement are subject
to the satisfaction of the following conditions unless waived by the Purchaser:
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5.1 Opinion of Counsel. You shall have received a favorable opinion,
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addressed to you, dated the date of Closing and satisfactory in substance and
form to you, from LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., special counsel for
the Company, substantially in the form set forth in EXHIBIT A and covering such
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matters incident to the transactions contemplated by this Agreement as you or
your counsel may reasonably request.
5.2 Representations. The representations made by the Company in
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Section 3 hereof shall be true and correct when made, and shall be true and
correct on the Closing Date with the same force and effect as if they had been
made on and as of said date.
5.3 Authorization. All action necessary to authorize the execution,
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delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby shall have been duly and validly taken by the
Company and the Company shall have full power and right to consummate the
transactions contemplated hereby.
5.4 Acceptance by Counsel to the Purchaser. The form and substance
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of all legal matters contemplated hereby and of all papers delivered hereunder
shall be acceptable to counsel to the Purchaser.
5.5 Government Consents, Authorizations, Etc. All consents,
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authorizations, orders or approvals of, and filings or registrations with, any
federal, state, local or foreign governmental commission, board or other
regulatory body which are required for or in connection with the execution,
delivery and performance of this Agreement by the Company, and the consummation
of the transactions contemplated hereby shall have been duly obtained or made.
5.6 No Litigation or Legislation. No federal, state, local or
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foreign statute, rule or regulation shall have been enacted or litigation,
proceeding, government inquiry or investigation commenced or threatened which
prohibits, restricts or delays the consummation of the transactions contemplated
by this Agreement or any of the conditions to the consummation of such
transactions or adversely affects the desirability of consummating the
transactions contemplated hereby.
5.7 No Material Adverse Change. In the judgment of Purchaser, no
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material adverse change shall have occurred in the financial condition, assets,
liabilities (absolute, accrued, contingent or otherwise), reserves, business,
operations or prospects of the Company since December 31, 1993.
5.8 Consents and Permits. The Company shall have received all
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consents, permits and other authorizations as may be
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required pursuant to any agreement, order or decree to which the Company is a
party or to which it is subject, in connection with the transactions
contemplated by this Agreement. The Company shall have provided copies to the
Purchaser of all such consents, permits and authorizations.
ARTICLE 6. CONDITIONS TO OBLIGATIONS OF THE COMPANY
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The obligations of the Company to perform this Agreement are subject
to the satisfaction of the following conditions unless waived by the Company:
6.1 Representations. The representations made by Purchaser in
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Section 4 hereof shall be true and correct when made, and shall be true and
correct on the Closing Date with the same force and effect as if they had been
made on and as of said date.
6.2 Legality. At the time of Closing the sale of the Shares to the
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Purchaser shall be legally permitted by all laws and regulations to which the
Purchaser and the Company are subject.
6.3 Acceptance by Counsel to the Company. The form and substance of
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all legal matters contemplated herein and of all papers delivered hereunder
shall be acceptable to counsel to the Company.
ARTICLE 7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION, ETC.
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7.1 Survival. All representations and warranties made by any party
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to this Agreement, including, without limitation, all representations and
warranties made on any Schedule or Exhibit attached hereto or document delivered
hereunder, shall survive the Closing and the consummation of the transactions
contemplated hereby.
7.2 Company's Agreement to Indemnify. The Company hereby agrees to
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indemnify and save the Purchaser harmless from and against, for and in respect
of, any and all damages, losses, obligations, liabilities, claims, actions or
causes of action, encumbrances, costs, and expenses (including, without
limitation, reasonable attorneys' fees) arising from the untruth, inaccuracy or
breach or nonfulfillment of any representation, warranty, covenant or agreement
of the Company, contained in or made pursuant to this Agreement, including any
Exhibit or Schedule attached hereto or certificate delivered hereunder.
ARTICLE 8. RESTRICTION ON TRANSFERABILITY
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8.1 Restriction; Procedure for Transfer. The Shares shall not be
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transferable except upon the conditions specified in
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this Section 8, which conditions are intended to ensure compliance with the
Securities Act and applicable state securities laws.
8.2 Notice of Proposed Transfer. Prior to any proposed transfer of
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any of the Shares (other than a transfer pursuant to registration under the
Securities Act), the holder thereof shall give written notice to the Company of
such holder's intention to effect such transfer. Each such notice shall
describe the manner and circumstances of the proposed transfer in sufficient
detail, and shall be accompanied by a written opinion of legal counsel who shall
be reasonably satisfactory to the Company, addressed to the Company, to the
effect that the proposed transfer of the Shares may be effected without
registration under the Securities Act.
ARTICLE 9. REGISTRATION UNDER SECURITIES ACT, ETC.
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9.1 Registration on Request.
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(a) Request. At any time or from time to time on the earlier of (x)
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December 21, 1995 or (y) the occurrence of an Initial Public Offering, upon the
written request of one or more Initiating Holders, requesting that the Company
effect the registration under the Securities Act of all or part of such
Initiating Holders' Registrable Securities and specifying the intended method of
disposition thereof, the Company will promptly give written notice of such
requested registration to all holders of Registrable Securities, and thereupon
the Company will use its best efforts to effect the registration under the
Securities Act of
(i) the Registrable Securities which the Company has been so
requested to register by such Initiating Holders for disposition in
accordance with the intended method of disposition stated in such
request, and
(ii) all other Registrable Securities the holders of which shall
have made a written request to the Company for registration thereof
within 30 days after the giving of such written notice by the Company
(which request shall specify the intended method of disposition of such
Registrable Securities), and
(iii) subject to the priority provisions of section 9.1(f), all
shares of Common Stock which the Company may elect to register in
connection with the offering of Registrable Securities pursuant to this
Section 9.1; and
(iv) subject to the priority provisions of Section 9.1(f), shares
of Common Stock held by other Persons having registration rights
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all to the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities and the
additional shares of Common Stock, if any so to be registered, provided that the
provisions of this Section 9.1(a) shall not require the Company to effect more
than two registrations of Registrable Securities and, provided further, that the
total number of registrations which the Company is required to effect on request
hereunder and under all other agreements between the Company and the Purchaser,
including the Warrants, shall not exceed two.
(b) Registration Statement Form. Registrations under this Section 9.1
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shall be on such appropriate registration form of the Commission (i) as
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shall be selected by the Company and, as shall be reasonably acceptable to
the holders of more than 50% (by number of shares) of the Registrable
Securities so to be registered and (ii) as shall permit the disposition of
--
such Registrable Securities in accordance with the intended method or
methods of disposition specified in their request for such registration.
The Company agrees to include in any such registration statement all
information which holders of Registrable Securities being registered shall
reasonably request.
(c) Expenses. The Company will pay all Registration Expenses in
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connection with each registration requested pursuant to this Section 9.1.
Underwriting discounts and commissions and transfer taxes, if any, in
connection with each such registration statement shall be allocated pro
rata among all Persons on whose behalf securities of the Company are
included in such registration, on the basis of the respective amounts of
the securities then being registered on their behalf.
(d) Effective Registration Statement. A registration requested
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pursuant to this section 9.1 shall not be deemed to have been effected (i)
-
unless a registration statement with respect thereto has become effective,
provided that a registration which does not become effective after the
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Company has filed a registration statement with respect thereto solely by
reason of the refusal to proceed of the Initiating Holders (other than a
refusal to proceed based upon the advice of counsel relating to a matter
with respect to the Company) shall be deemed to have been effected by the
Company at the request of such Initiating Holders unless the Initiating
Holders shall have elected to pay all Registration Expenses in connection
with such registration, (ii) if, after it has become effective, such
--
registration is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or
court for any reason, or (iii) the conditions to closing specified in the
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purchase agreement or underwriting agreement entered into in connection with
such registration are not satisfied, other than by reason of some act or
omission by such Initiating Holders.
(e) Selection of Underwriters. If a requested registration pursuant to
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this Section 9.1 involves an underwritten offering, the underwriter or
underwriters thereof shall be selected by the holders of at least a majority (by
number of shares) of the Registrable Securities as to which registration has
been requested and shall be acceptable to the Company, which shall not
unreasonably withhold its acceptance of such underwriters.
(f) Priority in Requested Registrations. If a requested registration
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pursuant to this Section 9.1 involves an underwritten offering, and the managing
underwriter shall advise the Company in writing (with a copy to each holder of
Registrable Securities requesting registration) that, in its opinion, the number
of securities requested to be included in such registration (including
securities of the Company which are not Registrable Securities) exceeds the
number which can be sold in such offering within a price range acceptable to the
holders of a majority of the Registrable Securities requested to be included in
such registration, the Company will include in such registration to the extent
of the number which the Company is so advised can be sold in such offering, (i)
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first Registrable Securities requested to be included in such registration, pro
rata among the holders thereof requesting such securities be included by such
holders and (ii) second, securities the Company proposes to sell and other
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securities of the Company included in such registration by the holders thereof.
9.2 Incidental Registration.
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(a) Right to Include Registrable Securities. If the Company at any
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time proposes to register any of its securities under the Securities Act (other
than by a registration on Form S-4 or S-8, or any successor or similar forms and
other than pursuant to Section 9.1), whether or not for sale for its own
account, it will each such time give prompt written notice to all holders of
Registrable Securities of its intention to do so and of such holders' rights
under this Section 9.2. Upon the written request of any such holder made within
30 days after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such holder and the
intended method of disposition thereof), the Company will use its best efforts
to effect the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register
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by the holders thereof, to the extent requisite to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the Registrable
Securities so to be registered, by inclusion of such Registrable Securities in
the registration statement which covers the securities which the Company
proposes to register, provided that if, at any time after giving written notice
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of its intention to register any securities and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason either not to register or to delay
registration of such securities, the Company may, at its election, give written
notice of such determination to each holder of Registrable Securities and,
thereupon, (i) in the case of a determination not to register, shall be relieved
-
of its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith), without prejudice, however, to the rights of any holder
or holders of Registrable Securities entitled to do so to request that such
registration be effected as a registration under Section 9.1, and (ii) in the
--
case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities, for the same period as the delay in
registering such other securities. No registration effected under this Section
9.2 shall relieve the Company of its obligation to effect any registration upon
request under Section 9.1. The Company will pay all Registration Expenses in
connection with each registration of Registrable Securities requested pursuant
to this Section 9.2.
(b) Priority in Incidental Registrations. If (i) a registration pursuant
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to this Section 9.2 involves an underwritten offering of the securities so being
registered, whether or not for sale for the account of the Company, to be
distributed (on a firm commitment basis) by or through one or more underwriters
of recognized standing under underwriting terms appropriate for such a
transaction, (ii) the Registrable Securities so requested to be registered for
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sale for the account of holders of Registrable Securities are not also to be
included in such underwritten offering (either because the Company has not been
requested so to include such Registrable Securities pursuant to Section 9.4(b)
or, if requested to do so, is not obligated to do so under Section 9.4(b), and
(iii) the managing underwriter of such underwritten offering shall inform the
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Company and holders of the Registrable Securities requesting such registration
by letter of its belief that the distribution of all or a specified number of
such Registrable Securities concurrently with the securities being distributed
by such underwriters would interfere with the successful marketing of the
securities being distributed by such underwriters (such writing to state the
basis of such belief
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and the approximate number of such Registrable Securities which may be
distributed without such effect), then the Company may, upon written notice
to all holders of such Registrable Securities, reduce pro rata (if and to
the extent stated by such managing underwriter to be necessary to eliminate
such effect) the number of such Registrable Securities so that the
resultant aggregate number of such Registrable Securities so included in
such registration shall be equal to the number of shares stated in such
managing underwriter's letter.
9.3 Registration Procedures. If and whenever the Company is required
-----------------------
to use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Sections 9.1 and 9.2 the Company shall,
as expeditiously as possible:
(i) prepare and (within 90 days after the end of the period within
which requests for registration may be given to the Company or in any event
as soon thereafter as possible) file with the Commission the requisite
registration statement to effect such registration (including such audited
financial statements as may be required by the Securities Act or the rules
and regulations promulgated thereunder) and thereafter use its reasonable
best efforts to cause such registration statement to become and remain
effective for the time period required by this Agreement, provided, that
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before filing such registration statement or any amendments thereto the
Company will furnish to the counsel selected by the holders of Registrable
Securities which are to be included in such registration copies of all such
documents proposed to be filed, which documents will be subject to the
review of such counsel;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement until the earlier of such time as all of such
securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement or (i) in the case of a registration pursuant to Section 9.1, the
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expiration of 180 days after such registration statement becomes effective,
or (ii) in the case of a registration pursuant to Section 9.2, the
--
expiration of 90 days after such registration statement becomes effective,
it being understood that following the expiration of the relevant time
period, the
-14-
Company shall have no further obligation to maintain the effectiveness of such
registration statement;
(iii) furnish to each seller of Registrable Securities covered by
such registration statement such number of conformed copies of such registration
statement and of each such 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 conformity with the requirements of the Securities Act, and
such other documents, as such seller may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Securities
owned by such seller;
(iv) use its reasonable best efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities laws or blue sky laws of such
jurisdictions as any seller thereof and any underwriter of the securities being
sold by such seller shall reasonably request, to keep such registrations or
qualifications in effect for so long as such registration statement remains in
effect, and take any other action which may be reasonably necessary or advisable
to enable such seller and underwriter to consummate the disposition in such
jurisdictions of the securities owned by such seller, except that the Company
shall not for any such purpose be required to qualify generally to do business
as a foreign corporation in any jurisdiction wherein it would not but for the
requirements of this subdivision (iv) be obligated to be so qualified, or to
consent to general service of process in any such jurisdiction;
(v) use its best 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 to enable the seller or
sellers thereof to consummate the disposition of such Registrable Securities;
(vi) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller (and the underwriters, if any) of
(x) an opinion of counsel for the Company, dated the effective
date of such registration statement (and, if such registration
includes an underwritten public offering, an opinion dated the date of
the closing under
-15-
the underwriting agreement), reasonably satisfactory in form and
substance to such seller, and
(y) a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an
underwritten public offering, a letter dated the date of the closing
under the underwriting agreement), signed by the independent public
accountants who have certified the Company's financial statements
included in such registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to the underwriters in underwritten public
offerings of securities and, in the case of the accountants' letter, such other
financial matters, and, in the case of the legal opinion, such other legal
matters, as such seller (or the underwriters, if any) may reasonably request;
(vii) notify each seller of Registrable Securities covered by such
registration statement at any time when a prospectus relating to a registered
offering thereof is required to be delivered under the Securities Act, upon
discovery that, or upon 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 any material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made, and at
the request of any such seller promptly prepare and furnish to such seller and
each underwriter, if any, a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made;
(viii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen months, beginning
with the first full calendar month after the effective date of such registration
statement, which earnings
-16-
statement shall satisfy the provisions of Section 11(a) of the Securities
Act, and will furnish to each such seller at least five business days prior
to the filing thereof a copy of any amendment or supplement to such
registration statement or prospectus and shall not file any thereof to
which any such seller shall have reasonably objected on the grounds that
such amendment or supplement does not comply in all material respects with
the requirements of the Securities Act or of the rules or regulations
thereunder;
(ix) enter into such agreements and take such other actions as sellers
of such Registrable Securities holding 51% of the shares so to be sold
shall reasonably request in order to expedite or facilitate the disposition
of such Registrable Securities;
(x) use its reasonable best efforts to list all equity securities
covered by such registration statement on any securities exchange on which
any of such equity securities are then listed.
The Company may require each seller of Registrable Securities as to which any
registration is being effected, to furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
occurrence of any event of the kind described in subdivision (vii) of this
Section 9.3, such holder will forthwith discontinue such holder's disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (vii) of this
Section 9.3 and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such holder's possession of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice. In the event the
Company shall give any such notice, the periods mentioned in paragraph (ii) of
this Section 9.3 shall be extended by the length of the period from and
including the date when each seller of any Registrable Securities covered by
such registration statement shall have received such notice to the date on which
each such seller has received the copies of the supplemented or amended
prospectus contemplated by paragraph (vii) of this Section 9.3.
If any such registration or comparable statement refers to any holder
of Registrable Securities by name or otherwise as the
-17-
holder of any securities of the Company, then such holder shall have the right
to require (i) the insertion therein of language, in form and substance
satisfactory to such holder, to the effect that the holding by such holder of
such securities is not to be construed as a recommendation by such holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event that such reference
to such holder by name or otherwise is not required by the Securities Act or any
similar federal statute or the rules and regulations promulgated thereunder then
in force, the deletion of the reference to such holder.
9.4 Underwritten Offerings.
----------------------
(a) Requested Underwritten Offerings. If requested by the
--------------------------------
underwriters for any underwritten offering by holders of Registrable
Securities pursuant to a registration requested under section 9.1, the
Company will enter into an underwriting agreement with such underwriters
for such offering, such agreement to be satisfactory in substance and form
to the Company, each such holder and the underwriters, and to contain such
representations and warranties by the Company and such other terms as are
generally prevailing in agreements of this type, including, without
limitation, indemnities to the effect and to the extent provided in Section
9.6. The holders of the Registrable Securities will cooperate with the
Company in the negotiation of the underwriting agreement and will give
consideration to the reasonable suggestions of the Company regarding the
form thereof, provided that nothing herein contained shall diminish the
--------
foregoing obligations of the Company. The holders of Registrable Securities
to be distributed by such underwriters shall be parties to such
underwriting agreement and may, at their option, require that any or all of
the representations and warranties by, and the other agreements on the part
of, the Company to and for the benefit of such underwriters shall also be
made to and for the benefit of such holders of Registrable Securities and
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to
the obligations of such holders of Registrable Securities. Any such holder
of Registrable Securities shall not be required to make any representations
or warranties to or agreements with the Company or the underwriters other
than representations, warranties or agreements regarding such holder, such
holder's Registrable Securities and such holder's intended method of
distribution and any other representation required by law.
(b) Incidental Underwritten Offerings. If the Company at any time
---------------------------------
proposes to register any of its securities under
-18-
the Securities Act as contemplated by Section 9.2 and such securities are to be
distributed by or through one or more underwriters, the Company will, if
requested by any holder of Registrable Securities as provided in Section 9.2 and
subject to the provisions of Section 9.2(b), use its best efforts to arrange for
such underwriters to include all the Registrable Securities to be offered and
sold by such holder among the securities to be distributed by such underwriters,
provided that if the managing underwriter of such underwritten offering shall
--------
inform the holders of the Registrable Securities requesting such registration
and the holders of any other shares or securities which shall have exercised, in
respect of such underwritten offering, registration rights comparable to the
rights under Section 9.2 by letter of its belief that inclusion in such
underwritten distribution of all or a specified number of such Registrable
Securities or of such other shares or securities so requested to be included
would interfere with the successful marketing of the securities (other than such
Registrable Securities and other shares or securities so requested to be
included) by the underwriters (such writing to state the basis of such belief
and approximate number of such Registrable Securities and shares or other
securities so requested to be included which may be included in such
underwritten offering without such effect), then the Company may, upon written
notice to all holders of such Registrable Securities and of such other shares or
securities so requested to be included, exclude pro rata from such underwritten
offering (if and to the extent stated by such managing underwriter to be
necessary to eliminate such effect) the number of such Registrable Securities
and shares or such other securities so requested to be included the registration
of which shall have been requested by each holder of Registrable Securities and
by the holders of such other shares or securities, so that the resultant
aggregate number of such Registrable Securities and of such other shares or
securities so requested to be included which are included in such underwritten
offering shall be equal to the approximate number of shares stated in such
managing underwriter's letter. The holders of Registrable Securities to be
distributed by such underwriters shall be parties to the underwriting agreement
between the Company and such underwriters and may, at their option, require that
any or all of the representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters shall also
be made to and for the benefit of such holders of Registrable Securities and
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of such holders of Registrable Securities. Any such holder of
Registrable Securities shall not be required to make any representations or
warranties to or
-19-
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such holder, such holder's Registrable
Securities and such holder's intended method of distribution and any other
representation required by law.
(c) Holdback Agreements.
-------------------
(i) Each holder of Registrable Securities agrees by acquisition
of such Registrable Securities, if so required by the managing
underwriter, not to effect any public sale or distribution of any
equity securities of the Company, during the seven days prior to and
the 90 days after any underwritten registration pursuant to Section
9.1 or 9.2 has become effective, except as part of such underwritten
registration, whether or not such holder participates in such
registration.
(ii) The Company agrees (x) if so required by the managing
underwriter not to effect any public sale or distribution of its
equity securities or securities convertible into or exchangeable or
exercisable for any of such securities during the seven days prior to
and the 90 days after any underwritten registration pursuant to
Section 9.1 or 9.2 has become effective, except as part of such
underwritten registration and except pursuant to registrations on Form
S-4 and S-8, or any successor or similar forms thereto, and (y) to
cause each holder of its equity securities or any securities
convertible into or exchangeable or exercisable for any of such
securities, in each case purchased from the Company at any time after
the date of this Agreement (other than in a public offering) to agree
not to effect any such public sale or distribution of such securities
during such period.
9.5 Preparation; Reasonable Investigation. In connection with the
-------------------------------------
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, their underwriters, if
any, and their respective counsel and accountants, the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each amendment thereof or
supplement thereto, and will give each of them such access to its books and
records and such opportunities to discuss the business of the Company with its
officers and the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of such holders' and such
underwriters' respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act.
-20-
9.6 Indemnification.
---------------
(a) Indemnification by the Company. In the event of any registration of
------------------------------
any securities of the Company under the Securities Act pursuant to this Article
9, the Company will indemnify and hold harmless the holder of any Registrable
Securities covered by such registration statement, any partner or affiliate of
such holder and their respective directors, officers, stockholders, agents and
employees, each other Person who participates as an underwriter in the offering
or sale of such securities and each other Person, if any, who controls such
holder or any such underwriter within the meaning of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which such
holder or any such partner, affiliate, director, officer, stockholder agent,
employee or underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse such holder, and each such partner, affiliate, director, officer,
stockholder, agent, employee, underwriter and controlling person for any
reasonable legal or any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability, action
or proceeding; provided that the Company shall not be liable in any such case to
--------
the extent that any such loss, claim, damage, liability (or action or proceeding
in respect thereof) or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company through an instrument duly
executed by such holder specifically stating that it is for use in the
preparation thereof and, provided further that the Company shall not be liable
----------------
to any Person who participates as an underwriter, in the offering or sale of
Registrable Securities or to any other Person who participates as an
underwriter, in the offering or sale of Registrable Securities or to any other
Person, if any, who controls such underwriter within the meaning of the
Securities Act, in any such case to the extent that any such loss, claim,
damage,
-21-
liability (or action or proceeding in respect thereof) or expense arises out of
such Person's failure to send or give a copy of the final prospectus, as the
same may be then supplemented or amended, within the time required by the
Securities Act to the Person asserting an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such holder or any such partner, affiliate, director, officer,
stockholder, agent, employee, underwriter or controlling person and shall
survive the transfer of such securities by such holder.
(b) Indemnification by the Sellers. In the event of any registration of
------------------------------
Registrable Securities under the Securities Act pursuant to this Article 9, each
seller of Registrable Securities will (severally and not jointly) indemnify and
hold harmless (in the same manner and to the same extent as set forth in
subdivision (a) of this Section 9.6) the Company, each director of the Company,
each officer of the Company and each other person, if any, who controls the
Company within the meaning of the Securities Act, with respect to any statement
or alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company through an
instrument duly executed by such seller specifically stating that it is for use
in the preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. Such indemnity shall
remain in full force and effect, regardless of any investigation made by or on
behalf of the Company or any such director, officer or controlling person and
shall survive the transfer of such securities by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified party
----------------------
of notice of the commencement of any action or proceeding involving a claim
referred to in the preceding subdivisions of this Section 9.6, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action,
provided that the failure of any indemnified party to give notice as provided
--------
herein shall not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Section 9.6, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case
-22-
any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that the indemnifying party may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation. No indemnified party
shall consent to entry of any judgment or enter into any settlement of any such
action the defense of which has been assumed by an indemnifying party without
the consent of such indemnifying party.
(d) Other Indemnification. Indemnification similar to that specified in
---------------------
the preceding subdivisions of this Section 9.6 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of securities under
any Federal or state law or regulation of any governmental authority, other than
the Securities Act.
(e) Indemnification Payments. The indemnification required by this Section
------------------------
9.6 shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, as and when bills are received or expense,
loss, damage or liability is incurred.
(f) Contribution. If for any reason the indemnification provided for in
------------
the preceding paragraphs of this Section 9 is unavailable to an indemnified
party or is insufficient to hold it harmless as contemplated by the preceding
clauses (a) and (b), then the 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 loss, claim, damage, liability or expense
in such proportion as is appropriate to reflect not only the relative benefits
received by the indemnified party and the indemnifying party, but also the
relative fault of the indemnified party and indemnifying party in connection
with the actions which resulted in such
-23-
loss, claim, damage, liability or expense, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been 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. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 9.6(f) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. No holder of
Registrable Securities shall be required to contribute in an amount greater than
the dollar amount of proceeds received by such holder with respect to the sale
of such holder's Registrable Securities.
9.7 Other Registration Rights. The Company shall not enter into any
-------------------------
agreement or arrangement to provide any Person with registration rights that are
inconsistent with the registration and other rights provided hereunder.
ARTICLE 10. DEFINITIONS
----------- -----------
As used herein, unless the context otherwise requires, the following
terms have the following meanings:
Affiliate: With respect to the Company and its Subsidiaries, (a) any
---------
Person (other than the Company or another of its Subsidiaries) which, directly
or indirectly, is in Control of, is Controlled by, or is under common Control
with, the Company, or (b) any Person who is a director, officer or beneficial
owner of at least 10% of the common equity (i) of the Company, (ii) of any
Subsidiary of the Company or (iii) of any Person described in clause (a) above
other than a Subsidiary of the Company. "Affiliate" shall include Xx. Xxxx X.
Xxxxxxx, Mr. Xxxxxx Poludnewycz and Xx. Xxxxxx X. Xxxxxxxx and any Person which
is, directly or indirectly, controlled by any of the foregoing.
-24-
"Affiliate" shall not include Wand/IMA Investments, L.P. or any of its partners,
affiliates, directors, officers, stockholders, agents or employees, including,
without limitation, Xxxxx X. Xxxxxxx and Xxxxxx X. Xxxx.
Business Day: Any day other than a Saturday or a Sunday or a day on
------------
which commercial banking institutions in the City of New York or the State of
Connecticut are authorized by law to be closed. Any reference to "days" (unless
Business Days are specified) shall mean calendar days.
Commission: The Securities and Exchange Commission or any other
----------
federal agency at the time administering the Securities Act.
Common Stock: As defined in Section 1.1 hereof, such term to include
------------
any stock into which such Common Stock shall have been changed or any stock
resulting from any reclassification of such Common Stock, and all other stock of
any class or classes (however designated) of the Company the holders of which
have the right, without limitation as to amount, either to all or to a share of
the balance of current dividends and liquidating dividends after the payment of
dividends and distributions on any shares entitled to preference.
Company: As defined in the introduction to this Agreement, such term
-------
to include any corporation which shall succeed to or assume the obligations of
the Company hereunder.
Control: The possession, directly or indirectly, of the power,
-------
whether or not exercised, to direct or cause the direction of the management or
policies of any Person, whether through the ownership of voting securities, by
contract, or otherwise; "Controlling" and "Controlled" shall have meanings
correlative to the foregoing.
Copyrights: Registered or unregistered United States or foreign
----------
copyrights (including but not limited to copyrights in computer programs,
related documentation, and data bases) and United States and foreign copyright
registrations, and applications for registration and all renewals and extensions
thereof.
Exchange Act: The Securities Exchange Act of 1934, or any similar
------------
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
Governmental Authority: Any nation or government, any state or other
----------------------
political subdivision thereof any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
-25-
Initial Public Offering: An Initial Public Offering shall mean the
-----------------------
first time a registration statement filed under the Securities Act with the
Commission (other than a registration statement on Form S-8, or any successor
form thereto, with respect to the issuance of Common Stock (or securities
convertible into or exchangeable for Common Stock or rights to acquire Common
Stock)), granted or to be granted to employees, officers or directors of the
Company pursuant to any employee stock option plan, unless as a result thereof
the Company would be required to file reports with respect to any of its equity
securities with the Commission) respecting an offering, whether primary or
secondary, of Common Stock is declared effective by the Commission.
Initiating Holders: Any holder or holders of Registrable Securities
------------------
holding at least 40% of the Registrable Securities (by number of shares) and
initiating a request pursuant to Section 9.1 for the registration of all or part
of such holder's or holders' Registrable Securities.
Intellectual Property Rights: All Trademarks, Patents, Copyrights,
----------------------------
Know-How and Technical Information.
Know-How and Technical Information: Computer programs, related
----------------------------------
documentation and databases, data, plans, trade secrets, technologies,
processes, specifications, know-how, operating experience and information
(business, economic and technical) relating to the foregoing.
NASD: The National Association of Securities Dealers, Inc.
----
New Securities: Any Common Stock or preferred stock of the Company,
--------------
or any warrants, options or other rights to acquire Common Stock or preferred
stock(other than stock options granted to employees), or any securities
(including any debt instruments) of any other type that are convertible into
said Common Stock or preferred stock, issued after the date hereof; provided
that "New Securities" does not include (i) Common Stock issued pursuant to
currently outstanding warrants or stock options; or (ii) the issuance by the
Company of Common Stock or preferred stock, or options, rights or warrants to
acquire Common Stock or preferred stock or any other security (including any
debt instruments) convertible into Common Stock or preferred stock in connection
with an acquisition by the Company of the stock or assets of another person or
the merger or consolidation by the Company with or into another corporation.
Patents: United States and foreign patents and patent applications,
-------
certificates of invention, utility models, and all renewals, extensions,
reissues, divisions, continuations and continuations-in-part thereof.
-26-
Person: An individual, a partnership, a joint venture, a corporation,
------
a trust, an unincorporated organization, an association or any other entity or a
government or any department or agency thereof.
Purchaser: Wand/IMA Investments, L.P., a Delaware limited
---------
partnership.
Registrable Securities: (a) the shares of Common Stock purchased
----------------------
pursuant to this Agreement and (b) any securities issued or issuable with
respect to any securities referred to in the foregoing subdivision by way of
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise.
As to any particular Registrable Securities, once issued such certificates shall
cease to be Registrable Securities when (a) a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (b) they shall have been distributed to the
public pursuant to Rule 144 (or any successor or similar provision) under the
Securities Act, (c) they shall have been otherwise transferred, new certificates
for them not bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent disposition of them immediately
thereafter shall not require registration or qualification of them (other than
by the issuer, an underwriter or an affiliate as such term is defined in the
Securities Act and the regulations promulgated thereunder of the issuer) under
the Securities Act or any similar state law then in force, or (d) they shall
have ceased to be outstanding.
Registration Expenses: All expenses incident to the Company's
---------------------
performance of or compliance with Section 9, including, without limitation, all
registration, filing and NASD fees, all fees and expenses of complying with
securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and disbursements of counsel
for the Company and of its independent public accountants, including the
expenses of any special audits or "cold comfort" letters required by or incident
to such performance and compliance, the reasonable fees and disbursements of any
counsel and accountants retained by the holder or holders of more than 51% of
the Registrable Securities being registered, premiums and other costs of
policies of insurance (if any) against liabilities arising out of the public
offering of the Registrable Securities being registered or officers and
directors insurance and any fees and disbursements of underwriters customarily
paid by issuers or sellers of securities, but excluding underwriting discounts
and commissions and transfer taxes, if any.
-27-
Securities Act: The Securities Act of 1933, or any similar federal
--------------
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
Shares: As defined in Section 1.1 of this Agreement.
------
Subsidiary: With respect to any Person, any corporation with respect
----------
to which more than 50% of the outstanding shares of stock of each class having
ordinary voting power (other than stock having such power only by reason of the
happening of a contingency) is at the time owned by such Person or by one or
more Subsidiaries of such Person or by such Person and one or more Subsidiaries
of such Person.
Trademarks: All registered and unregistered trademarks, service
----------
marks, corporate names, tradenames, logos, designs, product or business
identifiers and trade dress together, in each case, with the good will of the
business symbolized thereby, and United States, state and foreign trademark or
servicemark registrations or applications for registration and all amendments,
renewals and extensions thereof.
Transfer: Any sale, assignment, pledge or other disposition of any
--------
security, or of any interest therein, which could constitute a "sale" as that
term is defined in section 2(3) of the Securities Act.
Warrants: The Common Stock Purchase Warrants No. W-3, No. W-4 and W-5
--------
issued by the Company to Xxxxxx X. Xxxx, Wand/IMA Investments, L.P. and Wand
Partners Inc., respectively.
ARTICLE 11. MISCELLANEOUS
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11.1 Preemptive Rights.
-----------------
(a) The Company hereby grants to the Purchaser the preemptive rights
to purchase the Purchaser's Proportionate Interest (as defined below) in any
issuance or sale of New Securities which the Company may, from time to time,
propose to issue or sell at a price per share of (i) less than $9.00 (subject
to appropriate adjustment in the event of any increase or decrease in the
number of outstanding shares of Common Stock by virtue of any stock split,
stock dividend, reverse stock split, reclassification or combination) in the
case of Common Stock or (ii) having a conversion price or option or warrant
exercise price of less than $9.00 (subject to appropriate adjustment in the
event of any increase or decrease in the number of outstanding shares of
Common Stock by virtue of any stock split, stock dividends, reverse stock
split, reclassification or combination) in the case of
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securities convertible into or exercisable for, Common Stock. For purposes of
this Section 11.1, a Purchaser's Proportionate Interest in such an issuance
or sale shall mean that portion of such issuance or sale which, if purchased
by such Purchaser under this Section 11.1, would allow such Purchaser to own
the same percentage of the issued and outstanding Common Stock of the Company
after giving effect to such issuance or sale as such Purchaser owned
immediately prior to such issuance or sale (calculated on a fully-diluted
basis as if all outstanding warrants, options, rights and securities
convertible into or exchangeable for Common Stock had been exercised in full,
but without regard to the adjustment provisions of any outstanding
securities).
(b) The value of any non-cash "consideration" shall be determined in good
faith by the Board of Directors of the Company.
(c) In the event the Company proposes to undertake an issuance or sale of
New Securities for consideration of less than $9.00 per share as described in
clause (a) above, the Company shall give the Purchasers written notice of the
Company's intention, describing the type of New Securities, the price, the
maximum amount to be issued or sold and the general terms upon which the
Company proposes to issue or sell the same. Each Purchaser shall have thirty
(30) days from the date of such notice to agree (by written notice to the
Company) to purchase its Proportionate Interest in such issuance or sale upon
such price and terms.
(d) The preemptive rights hereunder shall not apply to any public offering
of the Common Stock or securities convertible into or exchangeable for Common
Stock of the Company pursuant to a registration statement filed under the
Securities Act with the Commission which is declared effective by the
Commission.
(e) During the period of 60 days after the expiration of the notice period
to which the Purchasers are entitled hereunder, the Company shall be
permitted to sell or enter into an agreement (pursuant to which the sale or
other transaction shall be closed, if at all, within 60 days from the date of
said agreement) to sell the New Securities at a price and upon general terms
no more favorable to the purchasers thereof than specified in the Company's
notice to the Purchasers under clause (c) above.
(f) The preemptive rights described in this Section 11.1 are personal to
the Purchasers and may not be assigned or transferred, whether by agreement
or by operation of law or otherwise, and any attempted transfer shall be
void.
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(g) Upon the sale or transfer to any person of New Securities as to which
the preemptive rights hereunder shall not have been exercised, such New
Securities shall thereafter be transferable free of the preemptive rights
provided hereunder.
(h) The preemptive rights hereunder shall terminate upon the date on which
a registration statement relating to an Initial Public Offering is declared
effective by the Commission.
11.2 Amendment, Modification and Waiver. This Agreement shall
----------------------------------
not be altered or otherwise amended except pursuant to an instrument in writing
signed by the Purchasers and the Company, and any obligation owed to a party
under this Agreement may only be waived in a writing signed by such party. The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach.
11.3 Expenses; Transfer Taxes, Etc. All fees, costs and expenses
-----------------------------
incurred by the Company in connection with, relating to or arising out of the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby shall be borne by the Company. The Company
shall pay all sales, use and excise taxes and all registration, recording or
transfer taxes which may be payable in connection with the transactions
contemplated by this Agreement.
11.4 Binding Effect; Benefits; Parties in Interest. This
---------------------------------------------
Agreement shall be binding upon, inure to the benefit of, and be enforceable by,
the respective successors, assigns, heirs and legal representatives of the
parties hereto; provided, however, that this Agreement shall not be assignable
-------- -------
by the Company or the Purchasers without the prior written consent of the other.
11.5 Entire Agreement. This Agreement (including the Schedules
----------------
attached hereto), and the other writings referred to herein or delivered
pursuant hereto contain the entire understanding of the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings
with respect to such subject matter.
11.6 Headings. The Section and paragraph headings contained in
--------
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
11.7 Notices. All notices, claims, certificates, requests,
-------
demands and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered by hand, mailed (by first-class
mail, postage prepaid), transmitted by
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telex or telecopier or sent by air courier guaranteeing overnight delivery as
follows:
If to the Company, to:
Information Management Associates, Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xx. Xxxx X. Xxxxxxx
With a copy to:
Xxxxxx X. Xxxxxxxxx, Esq.
LeBoeuf, Lamb, Xxxxxx & XxxXxx
Xxxxxxx Square
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
If to the Purchaser, to:
Wand/IMA Investments, L.P.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxxxx
With a copy to:
Xxxxx X. Xxxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. Any such
communication shall be deemed to have been given, in the case of personal
delivery, on the date of delivery and in the case of mailing five (5) days after
such mailing.
11.8 Counterparts. This Agreement may be executed in any number
------------
of counterparts, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement.
11.9 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Connecticut.
11.10 Gender. Any reference to the masculine gender shall be
------
deemed to include the feminine and neuter genders unless the context otherwise
requires.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered on the date first above written.
THE COMPANY:
INFORMATION MANAGEMENT ASSOCIATES,
INC.
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxx
President
THE PURCHASER:
WAND/IMA Investments, L.P.
By Wand Partners Inc., as General
Partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Xxxxx X. Xxxxxxx
President
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