EXHIBIT 4.5
[FORM OF]
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement (this "Agreement"), dated as of by
and between The Ultimate Software Group, Inc., a Delaware corporation (the
"Company"), and the undersigned purchaser ("Purchaser").
WHEREAS, the Company and Purchaser have entered into a Subscription
Agreement (the "Subscription Agreement"), dated pursuant to which
Purchaser subscribed to purchase and the Company has agreed to sell (i) the
number of shares of common stock, par value $0.01 per share, of the Company
("Common Stock") set forth on Schedule A hereto and (ii) a warrant to purchase
the number of shares of Common Stock set forth on Schedule A at an exercise
price of $4.00 per share (the "Warrant");
WHEREAS, the shares of Common Stock set forth on Schedule A hereto,
including the shares of Common Stock which Purchaser shall be entitled to
purchase upon exercise of the Warrant, are hereinafter collectively referred to
as the "Shares"; and
WHEREAS, the Company and Purchaser desire to provide for certain
arrangements with respect to the registration of the Shares under the Securities
Act of 1933, as amended, and the rules and regulations thereunder (the
"Securities Act").
NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the following terms
have the meanings indicated below or in the referenced sections of this
Agreement:
"Person" means an individual, a partnership, a corporation, a limited
liability company or partnership, an association, a joint stock company, a
trust, a business trust, a joint venture, an unincorporated organization or a
government entity or any department, agency, or political subdivision thereof.
"Piggyback Registration" shall have the meaning set forth in Section
2(a) of this Agreement.
"Registrable Securities" means the Shares held by Purchaser; provided,
that a Registrable Security ceases to be a Registrable Security when (i) it is
registered under the Securities Act and disposed of in accordance with the
registration statement covering it, (ii) it is sold or transferred in accordance
with the requirements of Rule 144 (or similar provisions then in effect)
promulgated by the SEC under the Securities Act ("Rule 144"), or (iii) it is
eligible to be sold or transferred under Rule 144 as confirmed to the Company
and Purchaser in a Resale Opinion (as defined in Section 7) that has been
delivered to Purchaser and the Company.
"SEC" shall mean the United States Securities and Exchange Commission.
1
"Securities Act" shall have the meaning set forth in the second recital
of this Agreement.
"Shares" shall have the meaning set forth in the second recital of this
Agreement.
SECTION 2. PIGGYBACK REGISTRATIONS.
(a) RIGHT TO PIGGYBACK. Whenever the Company proposes to register
common stock under the Securities Act of 1933 in connection with a public
offering solely for cash on Form X-0, X-0 or S-3 (or any replacement or
successor forms), the Company shall promptly give Purchaser written notice of
such registration (a "Piggyback Registration"). Upon the written request of
Purchaser given within 20 days following the date of such notice, the Company
shall, subject to Section 2(c), cause to be included in such registration
statement and use its reasonable efforts to be registered under the Securities
Act all Registrable Securities that Purchaser shall have requested to be
registered. All Registrable Securities that Purchaser shall have requested to be
registered may be made subject to an underwriters' over-allotment option, if so
requested by the managing underwriter. The Company shall have the absolute right
to withdraw or cease to prepare or file any registration statement for any
offering referred to in this Section 2(a) without any obligation or liability to
Purchaser.
(b) EXPENSES. Purchaser shall bear and pay all expenses incurred in
connection with any registration, filing or qualification of Registrable
Securities with respect to a registration pursuant to this Section 2, including
without limitation Purchaser's pro rata share of all registration, filing, and
qualification fees and printers' and accounting fees relating or apportionable
thereto.
(c) PRIORITY ON REGISTRATIONS. If the managing underwriter shall advise
the Company in writing (with a copy to Purchaser) that, in the opinion of the
underwriter, marketing factors require a limitation of the number of securities
requested to be included in a registration pursuant to this Section 2, then the
Company will include in such registration, to the extent of the amount and class
which the Company is so advised can be sold without such material adverse effect
in such offering: FIRST, all securities proposed to be sold by the Company for
its own account; SECOND, all securities requested to be included in such
registration by X.X. Xxxxxx Investment Corporation, Sixty Wall Street SBIC Fund,
L.P., HarbourVest Partners V-Direct Fund L.P. and their respective permitted
assigns; THIRD, the Registrable Securities requested to be included in such
registration by Purchaser pursuant to this Section 2, and all other securities
being registered pursuant to the exercise of contractual rights comparable to
the rights granted in this Section 2, including the contractual rights of
Aberdeen Strategic Capital LP, in proportion (as nearly as practicable) to the
amount of such Shares and securities of the Company owned by each holder thereof
requesting inclusion of such Shares and securities in such registration; and
FOURTH, all other securities requested to be included in such registration.
SECTION 3. HOLDBACK AGREEMENT. To the extent not inconsistent with
applicable law, Purchaser agrees, upon the request of the managing underwriter
or underwriters in an underwritten offering, not to effect any sale or
distribution of securities of the Company of the same class as the securities
included in such registration statement, or any securities convertible into or
exchangeable or exercisable for such securities (except as part of such
registration), during the 180-day period beginning on the effective date of such
2
registration statement ("Resale Restrictions"), if and to the extent requested
by the managing underwriter or underwriters; PROVIDED that (a) Registrable
Securities owned by Purchaser are registered and sold pursuant to such
registration statement and (b) all other security holders registering securities
pursuant to the exercise of registration rights are subject to Resale
Restrictions that are no more favorable to such holders than those applicable to
Purchaser.
SECTION 4. REGISTRATION PROCEDURES.
(a) OBLIGATIONS OF THE COMPANY. Whenever Purchaser requests the
registration of any Registrable Securities pursuant to this Agreement, the
Company shall use its reasonable efforts to register and to permit the sale of
the Registrable Securities. To carry out this obligation, the Company shall take
all steps reasonably necessary to effect the registration of the Registrable
Securities contemplated hereby.
(b) PURCHASER INFORMATION. In the event of any registration by the
Company, from time to time, the Company may require Purchaser to furnish to the
Company information regarding Purchaser and the distribution of the securities
subject to the registration, and Purchaser shall furnish all such information
requested by the Company.
(c) NOTICE TO DISCONTINUE. The Company shall notify Purchaser (a
"Notice"), at any time when a prospectus is required to be delivered under the
Securities Act, of any event as a result of which the prospectus or any document
incorporated therein by reference contains an untrue statement of a material
fact or omits to state any material fact necessary to make the statements
therein not misleading in light of the circumstances under which such statements
were made, and prepare a supplement or amendment to the prospectus or any such
document incorporated therein so that thereafter the prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of the
circumstances under which said statements were made. Purchaser agrees that, upon
receipt of a Notice from the Company, it will discontinue disposition of
Registrable Securities until it receives copies of the supplemented or amended
prospectus as described above. In addition, if the Company requests, Purchaser
will deliver to the Company all copies, other than permanent file copies then in
Purchaser's possession, of the prospectus covering the Registrable Securities
current at the time of receipt of the Notice.
SECTION 5. INDEMNIFICATION.
(a) INDEMNIFICATION BY COMPANY. The Company agrees to indemnify and
hold harmless, to the full extent permitted by law, (i) Purchaser, (ii) each
Person who controls Purchaser (within the meaning of the Act), and (iii) the
trustees, officers, directors, partners, employees, representatives and/or
agents, as applicable, of each Person described in the foregoing clauses (i) and
(ii), from and against any and all losses, claims, damages, liabilities and
expenses caused by any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus or preliminary prospectus
(or any amendments or supplements thereto), including any document incorporated
by reference therein, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in case of a prospectus or preliminary prospectus, in light
of the circumstances under which they were made) not misleading, except insofar
3
as the same are caused by, contained in, or, with respect to any material
omission, omitted from, any information with respect to such indemnified party
furnished in writing to the Company by Purchaser or such indemnified party
expressly for use therein. The Company will also indemnify and hold harmless (A)
any underwriters of the Registrable Securities, (B) each Person who controls
such underwriters (within the meaning of the Act), and (C) the officers,
directors, partners, employees, representatives and/or agents of each Person
described in the foregoing clauses (A) and (B), to the same extent as provided
above with respect to the indemnification of the Purchaser.
(b) INDEMNIFICATION BY PURCHASER. Purchaser agrees to indemnify and
hold harmless, to the full extent permitted by law, (i) the Company, (ii) each
Person who controls the Company (within the meaning of the Act), and (iii) the
officers, directors, partners, employees, representatives and/or agents, as
applicable, of each Person described in the foregoing clauses (i) and (ii), from
and against any losses, claims, damages, liabilities and expenses caused by any
untrue or alleged untrue statement of a material fact or any omission or alleged
omission of a material fact required to be stated in the registration statement,
prospectus or preliminary prospectus (or any amendments or supplements thereto)
or necessary to make the statements therein (in the case of a prospectus or
preliminary prospectus, in the light or the circumstances under which they were
made) not misleading, to the extent, but only to the extent, that such untrue
statement or omission is contained in, or with respect to any material omission,
omitted from, any information with respect to Purchaser so furnished in writing
by Purchaser expressly for use therein. In no event shall the liability of
Purchaser be greater in amount than the dollar amount of the proceeds received
by Purchaser upon the sales of Restricted Securities giving rise to such
indemnification obligation.
(c) INDEMNIFICATION PROCEEDINGS. Any Person entitled to indemnification
hereunder agrees to give prompt written notice to the indemnifying party after
the receipt by such Person of any written notice of the commencement of any
action, suit, proceeding or investigation or threat thereof made in writing for
which such Person will claim indemnification or contribution pursuant to this
Agreement (but the failure to give such notice will not affect the right to
indemnification or contribution hereunder unless, and only to the extent that,
the indemnifying party is materially prejudiced by such failure). The
indemnifying party shall not have the right to assume the defense of such action
or proceeding on behalf of such indemnified party, it being understood, however,
that the indemnifying parties shall not, in connection with any one such action
or proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) in any one jurisdiction at
any time for all such indemnified parties, unless in the reasonable judgment of
an indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such claim, in
which event the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels. Any indemnified party shall
also have the right to employ separate counsel in any such action and
4
participate in the defense thereof at such indemnified party's expense. The
indemnifying party will not be subject to any liability for any settlements made
without its consent, which shall not be unreasonably withheld. No indemnifying
party shall, without the consent of such indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which such
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability for claims
that are the subject matter of such proceeding.
(d) CONTRIBUTION. If for any reason the indemnity provided for in this
Section 5 is unavailable to, or is insufficient to hold harmless, an indemnified
party, then the indemnifying party, in lieu of indemnifying such party, shall
contribute to the amount paid or payable by the indemnified party as a result of
such losses, claims, damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying party, on the one
hand, and the indemnified party, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of the indemnifying party, on the one hand, and the
indemnified party, on the other hand, 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, the
indemnifying party or the 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 an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 5(c), any
legal or other fees or expenses reasonably incurred by such indemnified 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 5(d) were determined by PRO RATA
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
SECTION 6. PARTICIPATION IN UNDERWRITTEN REGISTRATION. Purchaser may
not participate in any underwritten registration without (a) agreeing to sell
securities on the basis provided in underwriting arrangements approved by the
Company, and (b) completing and executing all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required by
the underwriting arrangements.
SECTION 7. TERMINATION. This Agreement and the obligations of the
Company hereunder shall terminate on the earlier to occur of (i) the fourth
anniversary hereof and (ii) the date on which a written opinion of U.S. counsel,
which counsel shall be reasonably acceptable to the Company, addressed to
Purchaser and the Company, in form and substance reasonably acceptable to
Purchaser, that all Registrable Securities may be sold or transferred pursuant
to Rule 144 (a "Resale Opinion"). Purchaser shall engage such counsel for
purposes of obtaining a Resale Opinion upon the request of the Company.
Purchaser shall bear and pay all fees and disbursements of such counsel in
connection therewith.
5
SECTION 8. MISCELLANEOUS.
(a) RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this Agreement
shall apply to the full extent set forth herein with respect to (i) the Shares
and (ii) any and all shares of common stock of the Company into which the Shares
are converted, exchanged or substituted in any recapitalization or other capital
reorganization by the Company.
(b) AMENDMENT. This Agreement may be amended or modified only by a
written agreement executed by the Company and Purchaser.
(c) SUCCESSORS AND ASSIGNS. All of the terms and provisions of this
Agreement shall be binding on and inure to the benefit of the parties and their
respective successors and assigns. No party may assign any of such party's
rights, interests or obligations hereunder without the prior written consent of
the other party hereto.
(d) ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings between the parties with
respect thereto. There are no promises, covenants or undertakings other than
those expressly set forth or provided for in this Agreement.
(e) GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of Delaware, without reference to its conflicts of law
principles.
6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
THE ULTIMATE SOFTWARE GROUP, INC.
By:
------------------------------------
Name:
Title:
By:
------------------------------------
7
SCHEDULE A
COMMON STOCK:
Number of shares purchased:
--------------------------
WARRANT:
Aggregate number of shares
purchasable upon exercise:
---------------------------
8
