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EXHIBIT 10.17
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of this 16th day of November, 1998 by and between AremisSoft
Corporation, a Nevada corporation ("AremisSoft"), and Roys Poyiadjis.
RECITALS
WHEREAS, AremisSoft Corporation is an existing corporation duly
organized and in good standing under the laws of the State of Nevada, with its
principal executive offices located at 00 Xxxxxxxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx;
and
WHEREAS, Roys Poyiadjis currently owns one million (1,000,000) shares
of the outstanding Common Stock of AremisSoft; and
WHEREAS, AremisSoft has obtained all necessary corporate approvals for
the execution and delivery of this Agreement; and
WHEREAS, the parties to this Agreement intend to conduct their
relationships hereunder on an arm's length basis; and
WHEREAS, Roys Poyiadjis and AremisSoft desire to enter into this
Agreement to provide Roys Poyiadjis with certain registration rights as provided
herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. As used herein, the following terms shall have the
following respective meanings:
"Affiliate" of a specified Person shall mean any Person that directly
or indirectly controls, is controlled by, or is under common control with such
specified Person. A Person shall be deemed to control another Person if such
Person owns fifty percent (50%) or more of any equity interest in the
"controlled" Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock or partnership interests, by contract,
agreement or understanding (whether oral or written), or otherwise.
"Designated Transferee" shall have the meaning set forth in Section 10
hereof.
"EASDAQ" shall mean the European Association of Securities Dealers
Automated Quotation.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
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"Holders" shall mean Roys Poyiadjis, any Affiliate of Roys Poyiadjis
and any Designated Transferees who are holders of record of any Registrable
Shares, and any combination of one or more such Holders.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"NASDAQ" shall mean the National Association of Securities Dealers
Automated Quotation.
"Other Holders" shall mean Persons other than the Holders who are
holders of record of equity securities of AremisSoft to whom AremisSoft grants
or has granted registration rights pursuant to a written agreement.
"Person" shall mean any individual, corporation, association,
partnership, group (as defined in Section 13(d)(3) of the Exchange Act), limited
liability company, joint venture, business trust or unincorporated organization,
or a government or any agency or political subdivision thereof.
"Registrable Shares" shall mean (i) One Million (1,000,000) shares of
Common Stock owned by the Holders on the date hereof, representing approximately
5.8% of the currently outstanding Common Stock of AremisSoft, and (ii) any
shares of Common Stock acquired by a Holder directly or upon exercise of
conversion of any equity securities of AremisSoft issued or distributed after
the date of this Agreement to a Holder in respect of Registrable Shares by way
of any stock dividend, stock split or other distribution or any recapitalization
or reclassification. As to any particular Registrable Share, such Registrable
Share shall cease to be a Registrable Share when (w) it shall have been sold,
transferred or otherwise disposed of or exchanged pursuant to a registration
statement under the Securities Act, including sales in the Offering; (x) it
shall have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act; (y) it shall have been sold or transferred
to a Person other than a Designated Transferee in a private transaction effected
other than pursuant to a registration statement; or (z) it shall have been sold,
transferred or otherwise disposed of in violation of this Agreement.
"Registration Expenses" shall have the meaning set forth in Section
7(a) hereof.
"SEC" shall mean the Securities and Exchange Commission or any
successor agency.
"Securities Act" shall mean the Securities Act of 1933, as amended.
2. Incidental Registrations
(a) Right to Include Registrable Shares. Each time AremisSoft shall
determine to file a registration statement under the Securities Act in
connection with a proposed offer and sale for cash of any equity securities
(other than an offering of debt securities that are convertible into equity
securities, an offering of equity securities in an amount not in excess of five
percent (5%) of the number of shares of Common Stock outstanding at such time,
or an offering of equity securities solely pursuant to an employee stock option
plan or other employee benefit plan registered on Form S-8 or any similar form
under the Securities Act) either by it or by any holders of its outstanding
equity securities, AremisSoft will give prompt written notice of its
determination to each Holder and of such Holder's rights under this Section 2,
at least thirty (30) days prior to the anticipated filing date of such
registration statement.
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Upon the written request of each Holder made within twenty-one (21) days after
the receipt of any such notice from AremisSoft (which request shall specify the
Registrable Shares intended to be disposed of by such Holder), AremisSoft will
use its best efforts to effect the registration under the Securities Act of all
Registrable Shares that AremisSoft has been so requested to register by the
Holders thereof, to the extent required to permit the disposition of the
Registrable Shares so to be registered; provided, however, that (i) if, at any
time after giving written notice of its intention to register any securities and
prior to the effective date of the registration statement filed in connection
with such registration, AremisSoft shall determine for any reason not to proceed
with the proposed registration of the securities to be sold by it, AremisSoft
may, at its election, give written notice of such determination to each Holder
of Registrable Shares and thereupon shall be relieved of its obligation to
register any Registrable Shares in connection with such registration (but not
from its obligation to pay the Registration Expenses in connection therewith),
and (ii) if such registration involves an underwritten offering, all Holders of
Registrable Shares requesting to be included in AremisSoft's registration must
sell their Registrable Shares to the underwriters on the same terms and
conditions as apply to AremisSoft, with such differences, including any with
respect to indemnification and liability insurance, as may be customary or
appropriate in combined primary and secondary offerings. If a registration
requested pursuant to this Section 2(a) involves an underwritten public
offering, any Holder of Registrable Shares requesting to be included in such
registration may elect, in writing prior to the effective date of the
registration statement filed in connection with such registration, not to
register such securities in connection with such registration. No registration
effected under this Section 2 shall relieve AremisSoft of its obligations to
effect registrations upon request under Section 4 hereof.
(b) Priority in Incidental Registration. If a registration pursuant to
this Section 2 involves an underwritten offering and the managing underwriter(s)
in good faith advise(s) AremisSoft in writing that, in its opinion, the number
of securities that AremisSoft, the Holders and any other Persons intend to
include in such registration exceeds the largest number of securities that can
be sold in such offering without having an adverse effect on such offering
(including the price at which such securities can be sold), then AremisSoft will
include in such registration (i) first, if the registration pursuant to this
Section 2 was initiated by Other Holders exercising demand registration rights,
one hundred percent (100%) of the securities such Other Holders propose to sell
(except to the extent the terms of such Other Holders' registration rights
provide otherwise); (ii) second, one hundred percent (100%) of the securities
AremisSoft proposes to sell for its own account; and (iii) third, to the extent
that the number of securities that such Other Holders exercising demand
registration rights and AremisSoft propose to sell is less than the number of
securities that AremisSoft has been advised can be sold in such offering without
having the adverse effect referred to above, such number of Registrable Shares
that the Holders have requested to be included in such registration pursuant to
Section 2(a) hereof and such number of securities that Other Holders exercising
incidental or "piggyback" registration rights of equal priority have requested
to be included in such registration and which collectively, in the opinion of
such managing underwriter(s), can be sold without having the adverse effect
referred to above (provided that if the number of Registrable Shares requested
to be registered pursuant to Section 2(a) hereof plus the number of securities
requested to be registered by Other Holders exercising such incidental or
"piggyback" registration rights exceeds the number that AremisSoft has been
advised can be sold in such offering without having the adverse effect referred
to above, the number of such Registrable Shares and other securities to be
included in such registration by the Holders and such Other Holders shall be
allocated pro rata (based on Common Stock equivalents) among such Holders and
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such Other Holders on the basis of the relative number of Registrable Shares or
other securities that each such Holder and Other Holder has requested to be
included in such registration).
(c) Initial Public Offering. The parties agree that the currently
proposed initial public offering of the Company's securities pursuant to a Form
S-1 initially filed with the SEC on July 1, 1998 (the "Offering") is not a
registration for purposes of Section 2 hereof and that the Holders do not have
any rights under this Agreement with respect to the Offering. The rights granted
under Section 2 of this Agreement shall be applicable to all registrations
effected by AremisSoft after the Offering.
3. Holdback Agreements.
(a) If any registration of Registrable Shares shall be in connection
with an underwritten public offering, the Holders shall not effect any public
sale or distribution (except in connection with such public offering), of any
equity securities of AremisSoft, or of any security convertible into or
exchangeable or exercisable for any equity security of AremisSoft (in each case,
other than as part of such underwritten public offering), during the ninety (90)
day period (or such lesser period as the managing underwriter(s) may permit)
beginning on the effective date of such registration, if, and to the extent, the
managing underwriter(s) of any such offering determine(s) such action is
necessary or desirable to effect such offering; provided, however, that each
Holder has received the written notice required by Section 2(a) hereof;
provided, however, that each Holder shall not be obligated to comply with such
restrictions arising as a result of an underwritten public offering subject to
Section 2 hereof more than once in any twelve (12) month period; and provided,
further, that no Holder owning less than five percent (5%) of the outstanding
shares of AremisSoft shall be obligated to comply with such restrictions if such
Holder is not including shares for sale in such offering.
(b) If any registration of Registrable Shares shall be in connection
with any underwritten public offering, AremisSoft shall not effect any public
sale or distribution (except in connection with such public offering) of any of
its equity securities or of any security convertible into or exchangeable or
exercisable for any of its equity securities (in each case other than as part of
such underwritten public offering) during the ninety (90) day period (or such
lesser period as the managing underwriter(s) may permit) beginning on the
effective date of such registration, and AremisSoft shall use its best efforts
to cause each member of the management of AremisSoft who holds any equity
security and each other holder of five percent (5%) or more of the outstanding
shares of any equity security, or of any security convertible into or
exchangeable or exercisable for any equity security, of AremisSoft purchased
from AremisSoft (at any time other than in a public offering) to so agree.
4. Registration on Request.
(a) Request by Holders. On or after the date that is one hundred eighty
(180) days after the closing date of the Offering, upon the written request of
the Holders of at least ten percent (10%) of the Registrable Shares (based on
the number in clause (i) of the definition thereof) that AremisSoft effect the
registration under the Securities Act of all or part of such Holders'
Registrable Shares, and specifying the amount (which shall not be less than ten
percent (10%) of the Registrable Shares (based on the number in clause (i) of
its definition) in the aggregate) and the intended method of disposition
thereof, AremisSoft will promptly give notice of such requested registration to
all other Holders of
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Registrable Shares and, as expeditiously as possible, use its best efforts to
effect the registration under the Securities Act of: (i) the Registrable Shares
that AremisSoft has been so requested to register by Holders of at least ten
percent (10%) of the Registrable Shares; and (ii) all other Registrable Shares
that AremisSoft has been requested to register by any other Holder thereof by
written request received by AremisSoft within twenty-one (21) days after the
giving of such written notice by AremisSoft (which request shall specify the
intended method of disposition of such Registrable Shares); provided, however,
that AremisSoft shall not be required to effect more than three (3)
registrations pursuant to this Section 4; provided, further, that AremisSoft
shall not be obligated to file a registration statement relating to a
registration request under this Section 4 (x) if the registration request is
delivered after delivery of a notice by AremisSoft of an intended registration
and prior to the effective date of the registration statement referred to in
such notice, (y) within a period of ninety (90) days after the effective date of
any other registration statement of AremisSoft requested by a Holder pursuant to
this Section 4 or pursuant to which any Holder included Registrable Shares, or
(z) if the Board of AremisSoft determines in good faith that, in view of the
advisability of deferring public disclosure of material corporate developments,
such registration and the disclosure required to be made in connection therewith
would not be in the best interests of AremisSoft at such time or that, in light
of other factors and considerations (including without limitation the pendency
of a presently effective registration statement initiated by AremisSoft), such
registration would be seriously detrimental to AremisSoft (in which event
AremisSoft's obligation to file a registration statement under this Section 4
shall be deferred for a period not to exceed ninety (90) days from the receipt
of the registration request). The Holders initially requesting a registration
pursuant to this Section 4 may, at any time prior to the effective date of the
registration statement relating to such registration, revoke such request by
providing a written notice to AremisSoft revoking such request; provided,
however, that, in the event the Holders shall have made a written request for a
demand registration (I) that is subsequently withdrawn by the Holders after
AremisSoft has filed a registration statement with the SEC in connection
therewith but prior to such demand registration being declared effective by the
SEC or (II) that is not declared effective solely as a result of the failure of
Holders to take all actions reasonably required in order to have the
registration and the related registration statement declared effective by the
SEC, then, in any such event, such demand registration shall be counted as a
demand registration for purposes of this Section 4(a). Promptly after the
expiration of the twenty-one (21) day period referred to in clause (ii) above,
AremisSoft will notify all the Holders to be included in the registration of the
other Holders and the number of shares of Registrable Shares requested to be
included therein.
(b) Registration Statement Form. If any registration requested pursuant
to this Section 4 that is proposed by AremisSoft to be effected by the filing of
a registration statement on Form S-3 (or any successor or similar short-form
registration statement) shall be in connection with an underwritten public
offering, and if the managing underwriter(s) shall advise AremisSoft in writing
that, in its opinion, the use of another form of registration statement is of
material importance to the success of such proposed offering, then such
registration shall be effected on such other form.
(c) Effective Registration Statement. A registration requested pursuant
to this Section 4 will not be deemed to have been effected unless it has become
effective under the Securities Act and has remained effective for two hundred
seventy (270) days or such shorter period as all the Registrable Shares included
in such registration have actually been sold thereunder. In addition, if within
one hundred eighty (180) days after it has become effective, the offering of
Registrable Shares pursuant to such registration is interfered with by any stop
order, injunction or other order or requirement of the
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SEC or other governmental agency or court, such registration will be deemed not
to have been effected for purposes of this Section 4.
(d) Priority in Requested Registrations. If a requested registration
pursuant to this Section 4 involves an underwritten offering and the managing
underwriter(s) in good faith advise(s) AremisSoft in writing that, in its
opinion, the number of securities requested to be included in such registration
(including securities of AremisSoft that are not Registrable Shares) exceeds the
largest number of securities that can be sold in such offering without having an
adverse effect on such offering (including the price at which such securities
can be sold), then AremisSoft will include in such registration (i) first, one
hundred percent (100%) of the Registrable Shares requested to be registered
pursuant to Section 4(a) hereof (provided that if the number of Registrable
Shares requested to be registered pursuant to Section 4(a) hereof exceeds the
number that AremisSoft has been advised can be sold in such offering without
having the adverse effect referred to above, the number of such Registrable
Shares to be included in such registration by the Holders shall be allocated pro
rata among such Holders on the basis of the relative number of Registrable
Shares each such Holder has requested to be included in such registration); (ii)
second, to the extent that the number of Registrable Shares requested to be
registered pursuant to Section 4(a) hereof is less than the number of securities
that AremisSoft has been advised can be sold in such offering without having the
adverse effect referred to above, such number of shares of equity securities
AremisSoft requests to be included in such registration, and (iii) third, to the
extent that the number of Registrable Shares requested to be included in such
registration pursuant to Section 4(a) hereof and the securities that AremisSoft
proposes to sell for its own account are, in the aggregate, less than the number
of equity securities that AremisSoft has been advised can be sold in such
offering without having the adverse effect referred to above, such number of
other securities proposed to be sold by any Other Holder that, in the opinion of
such managing underwriter(s), can be sold without having the adverse effect
referred to above (provided that if the number of such securities of such Other
Holder requested to be registered exceeds the number that AremisSoft has been
advised can be sold in such offering without having the adverse effect referred
to above, the number of such securities to be included in such registration
pursuant to this Section 4(d) shall be allocated pro rata among all such Other
Holders on the basis of the relative number of securities each such Other Holder
has requested to be included in such registration).
(e) Additional Rights. If AremisSoft at any time grants to any other
holders of equity securities of AremisSoft any rights to request AremisSoft to
effect the registration of any such shares of equity securities on terms more
favorable to such holders than the terms set forth in this Section 4 and in
Section 5 hereof, the terms of this Section 4 and of Section 5 hereof shall be
deemed amended or supplemented to the extent necessary to provide the Holders
such more favorable rights and benefits. In no event shall AremisSoft grant to
any Person any rights to request AremisSoft to effect the registration of any
shares of equity securities of AremisSoft on terms that are adverse to rights of
the Holders set forth in Section 2 and this Section 4 (it being understood that
granting additional incidental registration rights shall not be deemed adverse
to the rights of the Holders set forth in Section 2 so long as such additional
rights do not have priority over the rights of the Holders in an incidental
registration).
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5. Registration Procedures.
(a) If and whenever AremisSoft is required by the provisions of Section
2 or 4 hereof to use its best efforts to effect or cause the registration of
Registrable Shares, AremisSoft shall as expeditiously as possible:
(i) prepare and, in any event within sixty (60) days after the
end of the period within which a request for registration may be given
to AremisSoft, file with the SEC a registration statement with respect
to such Registrable Shares and use its best efforts to cause such
registration statement to become effective;
(ii) prepare and file with the SEC 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 for a period not in excess of two hundred seventy
(270) days and to comply with the provisions of the Securities Act, the
Exchange Act, and the rules and regulations promulgated thereunder with
respect to the disposition of all the securities covered by such
registration statement during such period in accordance with the
intended methods of disposition by the Holders thereof set forth in
such registration statement; provided, however, that (A) before filing
a registration statement (including an initial filing) or prospectus,
or any amendments or supplements thereto, AremisSoft will furnish to
one counsel selected by the Holders of a majority of the Registrable
Shares covered by such registration statement copies of all documents
proposed to be filed, which documents will be subject to the review and
comment of such counsel, and (B) AremisSoft will notify each Holder of
Registrable Shares covered by such registration statement of any stop
order issued or threatened by the SEC, any other order suspending the
use of any preliminary prospectus or of the suspension of the
qualification of the registration statement for offering or sale in any
jurisdiction, and take all reasonable actions required to prevent the
entry of such stop order, other order or suspension or to remove it if
entered;
(iii) furnish to each Holder and each underwriter, if
applicable, of Registrable Shares covered by such registration
statement such number of copies of the registration statement and of
each amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and
summary prospectus), in conformity with the requirements of the
Securities Act, and such other documents as each Holder of Registrable
Shares covered by such registration statement may reasonably request in
order to facilitate the disposition of the Registrable Shares by such
Holder;
(iv) use its best efforts to register or qualify such
Registrable Shares covered by such registration statement under the
state securities or blue sky laws of such jurisdictions as each Holder
of Registrable Shares covered by such registration statement and, if
applicable, each underwriter, may reasonably request, and do any and
all other acts and things that may be reasonably necessary to
consummate the disposition in such jurisdictions of the Registrable
Shares owned by such Holder, except that AremisSoft shall not for any
purpose be required to qualify generally to do business as
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a foreign corporation in any jurisdiction where, but for the
requirements of this clause (iv), it would not be obligated to be so
qualified;
(v) use its best efforts to cause such Registrable Shares
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 Holders thereof to consummate the disposition
of such Registrable Shares;
(vi) if at any time when a prospectus relating to the
Registrable Shares is required to be delivered under the Securities
Act, any event shall have occurred as the result of which any such
prospectus as then in effect would include an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
immediately give written notice thereof to each Holder and the managing
underwriter or underwriters, if any, of such Registrable Shares and
prepare and furnish to each such Holder a reasonable number of copies
of an amended or supplemental prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such Registrable Shares,
such prospectus shall not include an untrue statement of material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(vii) use its best efforts to list any portion of such
Registrable Shares not already listed on any securities exchange on
which similar securities of AremisSoft are then listed, and enter into
customary agreements including a listing application and
indemnification agreement in customary form, provided that the
applicable listing requirements are satisfied, and provide a transfer
agent and registrar for such Registrable Shares covered by such
registration statement not later than the effective date of such
registration statement;
(viii) enter into such customary agreements (including an
underwriting agreement in customary form) and take such other actions
as each Holder of Registrable Shares being sold or the underwriter or
underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Shares, including
customary indemnification and opinions;
(ix) use its best efforts to obtain a "cold comfort" letter or
letters from AremisSoft's independent public accountants in customary
form and covering matters of the type customarily covered by "cold
comfort" letters as the Holders of the Registrable Shares being sold or
the underwriters retained by such Holders shall reasonably request;
(x) make available for inspection by representatives of any
Holder of Registrable Shares covered by such registration statement, by
any underwriter participating in any disposition to be effected
pursuant to such registration statement and by any attorney, accountant
or other agent retained by such Holders or any such underwriter, all
financial and other records pertinent corporate documents and
properties of AremisSoft and its subsidiaries' officers, directors and
employees to supply all information and respond to all inquiries
reasonably requested by such Holders
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or any such representative, underwriter, attorney, accountant or agent
in connection with such registration statement;
(xi) promptly prior to the filing of any document that is to
be incorporated by reference into the registration statement or the
prospectus (after initial filing of the registration statement),
provide copies of such document to counsel to the Holders of
Registrable Shares covered by such registration statement and to the
managing underwriter(s), if any, make AremisSoft's representatives
available for discussion of such document and make such changes in such
document prior to the filing thereof as counsel for such Holders or
underwriter(s) may reasonably request;
(xii) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable after the effective
date of the registration statement, an earning statement that shall
satisfy the provisions of Section 11(a) of the Securities Act and the
rules and regulations promulgated thereunder;
(xiii) not later than the effective date of the applicable
registration statement, use its best efforts to provide a CUSIP number
for any portion of such Registrable Shares not already included in a
CUSIP number for similar securities of AremisSoft, and provide the
applicable transfer agents with printed certificates for the
Registrable Shares that are in a form eligible for deposit with the
Depository Trust Company;
(xiv) notify counsel for the Holders of Registrable Shares
included in such registration statement and the managing underwriter or
underwriters, if any, immediately and confirm the notice in writing,
(A) when the registration statement, or any post-effective amendment to
the registration statement, shall have become effective, or any
supplement or amendment to the prospectus shall have been filed, (B) of
the receipt of any comments from the SEC and (C) of any request of the
SEC to amend the registration statement or amend or supplement the
prospectus or for additional information; and
(xv) cooperate with each seller of Registrable Shares and each
underwriter, if any, participating in the disposition of such
Registrable Shares and their respective counsel in connection with any
filings required to be made with NASD, NASDAQ or EASDAQ.
(b) Each Holder of Registrable Shares hereby agrees that, upon receipt
of any notice from AremisSoft of the happening of any event of the type
described in Section 5(a)(vi) hereof, such Holder shall forthwith discontinue
disposition of such Registrable Shares covered by such registration statement or
related prospectus until such Holder's receipt of the copies of the supplemental
or amended prospectus contemplated by Section 5(a)(vi) hereof, and, if so
directed by AremisSoft, such Holder will deliver to AremisSoft (at AremisSoft's
expense) all copies, other than permanent file copies then in such Holder's
possession, of the prospectus covering such Registrable Shares at the time of
receipt of such notice. In the event AremisSoft shall give any such notice, the
period mentioned in Section 5(a)(ii) hereof shall be extended by the number of
days during the period from and including the date of
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the giving of such notice pursuant to Section 5(a)(vi) hereof and including the
date when such Holder shall have received the copies of the supplemental or
amended prospectus contemplated by Section 5(a)(vi) hereof. If for any other
reason the effectiveness of any registration statement filed pursuant to Section
4 hereof is suspended or interrupted prior to the expiration of the time period
regarding the maintenance of the effectiveness of such Registration Statement
required by Section 5(a)(ii) hereof so that Registrable Shares may not be sold
pursuant thereto, the applicable time period shall be extended by the number of
days equal to the number of days during the period beginning with the date of
such suspension or interruption to and ending with the date when the sale of
Registrable Shares pursuant to such registration statement may be recommenced.
(c) Each Holder hereby agrees to provide AremisSoft, upon receipt of
its request, with such information about such Holder to enable AremisSoft to
comply with the requirements of the Securities Act and to execute such
certificates as AremisSoft may reasonably request in connection with such
information and otherwise to satisfy any requirements of law.
6. Underwritten Registrations. Subject to the provisions of Sections 2,
3 and 4 hereof, any of the Registrable Shares covered by a registration
statement may be sold in an underwritten offering at the discretion of the
Holder thereof. In the case of an underwritten offering pursuant to Section 2
hereof, the managing underwriter(s) that will administer the offering shall be
selected by AremisSoft; provided, however, that such managing underwriter(s)
shall be reasonably satisfactory to the Holders of a majority of the Registrable
Shares to be registered. In the case of any underwritten offering pursuant to
Section 4 hereof, the managing underwriter(s) that will administer the offering
shall be selected by the Holders of a majority of the Registrable Shares to be
registered; provided, however, that such underwriter(s) shall be reasonably
satisfactory to AremisSoft.
7. Expenses.
(a) Subject to Section 7(b), AremisSoft shall pay all fees, costs and
expenses of all registrations pursuant to Sections 2 or 4 hereof, including all
SEC, stock exchange, NASD, NASDAQ or EASDAQ registration and filing fees and
expenses, reasonable fees and expenses of any "qualified independent
underwriter" and its counsel as may be required by the rules of NASD, NASDAQ or
EASDAQ, fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel for the underwriters, if
any, in connection with blue sky qualifications of the Registrable Shares),
rating agency fees, printing expenses (including expenses of printing
certificates for Registrable Shares and prospectuses), messenger, telephone and
delivery expenses, the fees and expenses incurred in connection with the listing
of the securities to be registered on each securities exchange or national
market system on which similar securities issued by AremisSoft are then listed,
fees and disbursements of counsel for AremisSoft and all independent certified
public accountants (including the expenses of any annual audit, special audit
and "cold comfort" letters required by or incident to such performance and
compliance), the fees and disbursements of the underwriters customarily paid by
issuers or sellers of securities (including expenses relating to "road shows"
and other marketing activities), the reasonable fees and expenses of special
experts required to be retained by AremisSoft in connection with such
registration, and the reasonable fees and expenses of other Persons required to
be retained by AremisSoft (collectively, "Registration Expenses").
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(b) The Holders shall pay the following: (i) any underwriting discounts
or commissions or transfer taxes, if any, attributable to the sale of
Registrable Shares by the Holders pursuant to this Agreement and (ii) all fees,
costs and expenses of counsel to the Holders in connection with any registration
pursuant to this Agreement.
8. Indemnification.
(a) Indemnification by AremisSoft. In the event of any registration of
any securities of AremisSoft under the Securities Act pursuant to Section 2 or 4
hereof, AremisSoft will, and it hereby does, indemnify and hold harmless, to the
extent permitted by law, each of the Holders of any Registrable Shares covered
by such registration statement, each Affiliate of such Holder (other than
AremisSoft) and their respective directors and officers, 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 (collectively, the "Indemnified
Parties"), against any and all losses, claims, damages or liabilities, joint or
several, and expenses (including any amounts paid in any settlement effected
with AremisSoft's consent, which consent shall not be unreasonably withheld) to
which any Indemnified Party may become subject under the Securities Act, state
securities or blue sky laws, common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof,
whether or not such Indemnified Party is a party thereto) or expenses arise out
of or are based upon (i) 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, final or
summary prospectus contained therein, or any amendment or supplement thereof,
(ii) 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
or (iii) any violation by AremisSoft of any federal, state or common law rule or
regulation applicable to AremisSoft and relating to action required of or
inaction by AremisSoft in connection with any such registration, and AremisSoft
will reimburse such Indemnified Party for any legal or any other expenses
reasonably incurred by it in connection with investigating or defending any such
loss, claim, liability, action or proceeding; provided, however, that AremisSoft
shall not be liable to any Indemnified Party 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 any untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement or amendment or supplement thereof or in any such
preliminary, final or summary prospectus in reliance upon and in conformity with
written information with respect to such Holder furnished to AremisSoft by such
Holder specifically for use in the preparation thereof. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Holder or any Indemnified Party and shall survive the transfer of
such securities by such Holder.
(b) Indemnification by the Holders and the Underwriters. AremisSoft may
require, as a condition to including any Registrable Shares in any registration
statement filed in accordance with Section 2 or 4 hereof, that AremisSoft shall
have received an undertaking reasonably satisfactory to it from the Holders of
such Registrable Shares or any underwriter to indemnify and hold harmless (in
the same manner and to the same extent as set forth in Section 8(a) hereof)
AremisSoft with respect to any statement or alleged statement in or omission or
alleged omission from such registration statement, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in
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conformity with written information with respect to the Holders of the
Registrable Shares being registered or such underwriter furnished to AremisSoft
by such Holders or such underwriter specifically for use in the preparation of
such registration statement, preliminary, final or summary prospectus or
amendment or supplement, or a document incorporated by reference into any of the
foregoing; provided, however, that no such Holder shall be liable for any
indemnity claims in excess of the amount of the net proceeds received by such
Holder from the sale of Registrable Shares. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
AremisSoft or any of the Holders, or any of their respective Affiliates (other
than AremisSoft), directors, officers or controlling Persons, and shall survive
the transfer of such securities by such Holder.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party hereunder of written notice of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 8, 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, however, that the failure
of the indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Section 8, except to the extent
that the indemnifying party is actually materially prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
the indemnifying party will be entitled to participate in and to assume the
defense thereof, with counsel 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 will 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; provided, however, that the indemnified party shall have the
right, at the sole cost and expense of the indemnifying party, to employ counsel
to represent the indemnified party and its respective controlling persons,
directors, officers, employees or agents who may be subject to liability arising
out of any claim in respect of which indemnity may be sought by the indemnified
party against such indemnifying party under this Section 8 if (i) the employment
of such counsel shall have been authorized in writing by such indemnifying party
in connection with the defense of such action, (ii) the indemnifying party shall
not have promptly employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action or counsel, or (iii) any indemnified
party shall have reasonably concluded that there may be defenses available to
such indemnified party or its respective controlling persons, directors,
officers, employees or agents which are in conflict with or in addition to those
available to an indemnifying party; provided, further, that the indemnifying
party shall not be obligated to pay for more than the expenses of one firm of
separate counsel for the indemnified party (in addition to the reasonable fees
and expenses of one firm serving as local counsel). No indemnifying party will
consent to entry of any judgment or enter into any settlement that 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.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to any indemnified party under Section 8(a) or 8(b) hereof
or is insufficient to hold it harmless in respect of any loss, claim, damage or
liability, or any action in respect of any loss, claim, damage or liability, or
any action in respect thereof referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative benefits
received by the indemnified party and indemnifying party or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to
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reflect not only the relative benefits referred to in clause (i) but also the
relative fault of the indemnified party and indemnifying party with respect to
the statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. Notwithstanding any other provision of this Section 8(d), no
Holder of Registrable Shares shall be required to contribute an amount greater
than the dollar amount of the net proceeds received by such Holder with respect
to the sale of any such Registrable Shares. 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.
(e) Other Indemnification. Indemnification similar to that specified in
the preceding subdivisions of this Section 8 (with appropriate modifications)
shall be given by AremisSoft and each Holder of Registrable Shares with respect
to any required registration or other qualification of securities under any
federal or state law or regulation other than the Securities Act.
(f) Non-Exclusivity. The obligations of the parties under this Section
8 shall be in addition to any liability that any party may otherwise have to any
other party.
9. Rule 144. AremisSoft covenants that it will file in a timely manner
the reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations promulgated thereunder (or, if AremisSoft is
not required to file such reports, it will, upon the request of any Holder of
Registrable Shares, make publicly available such information), and it will take
such further action as any Holder of Registrable Shares may reasonably request,
all to the extent required from time to time to enable such Holder to sell
Registrable Shares without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of any Holder of
Registrable Shares, AremisSoft will deliver to such Holder a written statement
as to whether it has complied with such requirements.
10. Miscellaneous
(a) Successor and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Except as provided herein, no party may assign
any of its rights or delegate any of its duties under this Agreement without the
express consent of the other parties hereto. The provisions of this Agreement
that are for the benefit of the parties hereto other than AremisSoft shall also
be for the benefit of and enforceable by any subsequent Holder of any
Registrable Shares, subject to the terms of this Agreement.
(b) Counterparts. This Agreement may be executed in two or
more counterparts and by the parties hereto in separate counterparts (including
by facsimile signatures), each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
Agreement.
(c) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(d) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
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(e) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(f) Entire Agreement. This Agreement is intended by the
parties as a final expression of their Agreement and intended to be a complete
and exclusive statement of the Agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by AremisSoft with
respect to the securities issued pursuant to the Stock Subscription Agreement
and the Reorganization Agreement. This Agreement supersedes all prior Agreements
and understandings between the parties with respect to such subject matter.
(g) Notices. All notices or other communications required
hereunder shall be in writing and shall be sufficient in all respects and shall
be deemed delivered after 5 days if sent via registered or certified mail,
postage prepaid; the next day if sent by overnight courier service; or one
business day after transmission if sent by facsimile, to the following:
If to AremisSoft : AremisSoft Corporation
00 Xxxxxxxxxxx
Xxxxxx XX0X 0XX, Xxxxxxx
Attn: Lycourgos X. Xxxxxxxxx
Fax: 00-000-000-0000
with copies to: Xxxxxx Eng Linn & Xxxxxxxx
000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to Roys Poyiadjis: Roys Poyiadjis
00 Xxxxxxxxxxx
Xxxxxx XX0X 0XX, Xxxxxxx
Fax: 00-000-000-0000
Any party hereto may change its address for purposes hereof by notice to all
other parties hereto.
(h) Dispute Resolution. No party to this agreement shall be
entitled to take legal action with respect to any dispute relating hereto until
it has complied in good faith with the following alternative dispute resolution
procedures. This section shall not apply to the extent it is deemed necessary to
take legal action immediately to preserve a party's adequate remedy.
(i) Negotiation. The parties shall attempt promptly
and in good faith to resolve any dispute arising out of or relating to this
Contract, through negotiations between representatives who have authority to
settle the controversy. Any party may give the other party(ies) written notice
of any such dispute not resolved in the normal course of business. Within 20
days after delivery of the notice, representatives of both parties shall meet at
a mutually acceptable time and place, and thereafter as often as they reasonably
deem necessary, to exchange information and to attempt
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to resolve the dispute, until the parties conclude that the dispute cannot be
resolved through unassisted negotiation. Negotiations extending sixty days after
notice shall be deemed at an impasse, unless otherwise agreed by the parties.
If a negotiator intends to be accompanied at a meeting by an attorney,
the other negotiator(s) shall be given at least three working days' notice of
such intention and may also be accompanied by an attorney. All negotiations
pursuant to this clause are confidential and shall be treated as compromise and
settlement negotiations for purposes of the Federal and state Rules of Evidence.
(ii) ADR Procedure. If a dispute with more than
$20,000.00 at issue has not been resolved within 60 days of the disputing
party's notice, a party wishing resolution of the dispute ("Claimant") shall
initiate assisted Alternative Dispute Resolution ("ADR") proceedings as
described in this Section. Once the Claimant has notified the other party
("Respondent") of a desire to initiate ADR proceedings, the proceedings shall be
governed as follows: By mutual agreement, the parties shall select the ADR
method they wish to use. That ADR method may include arbitration, mediation,
mini-trial, or any other method which best suits the circumstances of the
dispute. The parties shall agree in writing to the chosen ADR method and the
procedural rules to be followed within 30 days after receipt of notice of intent
to initiate ADR proceedings. To the extent the parties are unable to agree on
procedural rules in whole or in part, the current Center for Public Resources
("CPR") Model Procedure for Mediation of Business Disputes, CPR Model Mini-trial
Procedure, or CPR Commercial Arbitration Rules--whichever applies to the chosen
ADR method--shall control, to the extent such rules are consistent with the
provisions of this Section. If the parties are unable to agree on an ADR method,
the method shall be arbitration.
The parties shall select a single Neutral (as defined by CPR) third
party to preside over the ADR proceedings, by the following procedure: Within 15
days after an ADR method is established, the Claimant shall submit a list of 5
acceptable Neutrals to the Respondent. Each Neutral listed shall be sufficiently
qualified, including demonstrated neutrality, experience and competence
regarding the subject matter of the dispute. A Neutral shall be deemed to have
adequate experience if an attorney or former judge. None of the Neutrals may be
present or former employees, attorneys, or agents of either party. The list
shall supply information about each Neutral, including address, and relevant
background and experience (including education, employment history and prior ADR
assignments). Within 15 days after receiving the Claimant's list of Neutrals,
the Respondent shall select one Neutral from the list, if at least one
individual on the list is acceptable to the Respondent. If none on the list are
acceptable to the Respondent, the Respondent shall submit a list of 5 Neutrals,
together with the above background information, to the Claimant. Each of the
Neutrals shall meet the conditions stated above regarding the Claimant's
Neutrals. Within 15 days after receiving the Respondent's list of Neutrals, the
Claimant shall select one Neutral, if at least one individual on the list is
acceptable to the Respondent. If none on the list are acceptable to the
Claimant, then the parties shall request assistance from CPR to select a
Neutral.
The ADR proceeding shall take place within 30 days after the Neutral
has been selected. The Neutral shall issue a written decision within 30 days
after the ADR proceeding is complete. Each party shall be responsible for an
equal share of the costs of the ADR proceeding. The parties agree that any
applicable statute of limitations shall be tolled during the pendency of the ADR
proceedings, and no legal action may be brought in connection with this
agreement during the pendency of an ADR proceeding.
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The Neutral's written decision shall become final and binding on the
parties, unless a party objects in writing within 30 days of receipt of the
decision. The objecting party may then file a lawsuit in any court allowed by
this Contract. The Neutral's written decision shall be admissible in the
objecting party's lawsuit.
(i) Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the parties. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon the
Investor, its successors or assigns, and each future holder of such securities
and AremisSoft. A waiver by any party hereto of a default in the performance of
this Agreement shall not operate as a waiver of any future or other default,
whether of a like or different kind.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
AREMISSOFT CORPORATION
By: ______________________________
Lycourgos X. Xxxxxxxxx
Chairman of the Board
By: ______________________________
Roys Poyiadjis
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