EXHIBIT 4.10
AMENDED AND RESTATED REGISTRATION AND SHAREHOLDERS RIGHTS
AGREEMENT
DATED AS OF SEPTEMBER 15, 2000
AMONG
AMERICAN PSYCH SYSTEMS HOLDINGS, INC.
A DELAWARE CORPORATION
AND
THE HOLDERS OF REGISTRABLE SECURITIES
REFERRED TO HEREIN
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
AMENDED AND RESTATED REGISTRATION AND SHAREHOLDERS RIGHTS AGREEMENT
Amended and Restated Registration and Shareholders Rights Agreement
(this "Agreement") dated as of September 15, 2000 among American Psych
Systems Holdings, Inc., a Delaware corporation formerly known as American
Psych Systems, Inc. (the "Company") and Canpartners Investments IV, LLC, a
California limited liability company ("Canyon"), Nazem & Company IV, L.P.,
and Transatlantic Venture Partners, C.V. (collectively the "Holders") and the
certain other holders of securities of the Company who are signatories hereto.
RECITALS
WHEREAS, pursuant to that certain Note Purchase Agreement and Warrant
Agreement dated September 26, 1997 (the "1997 Note Purchase Agreement"), by and
between the Company and the Holders, the Holders received warrants to acquire
shares of Common Stock from the Company (the "Warrants");
WHEREAS, pursuant to that certain Registration Rights Agreement dated
September 26, 1997, as amended on December 23, 1998 (the "1997 Registration
Rights Agreement), by and between the Company and the Holders, the Company
agreed to cause the shares so underlying the Warrants to be registered pursuant
to the Securities Act;
WHEREAS, pursuant to the Note and Stock Purchase Agreement dated as of
September 15, 2000 by and among Psych Systems Holdings, Inc., a Delaware
corporation ("Issuer"), Canyon and the Guarantors from time to time party
thereto (the "2000 Note and Stock Purchase Agreement"), Canyon, as Purchaser
shall receive shares of Common Stock from the Company (the "Shares");
WHEREAS, pursuant to that certain Warrant dated as of December 23, 1998 in
favor of NationsCredit Commercial Corporation ("Bank of America") (the "Bank
of America Warrant Agreement") and that certain Warrantholders Rights Agreement
dated as of December 23, 1998, the Company and certain signatories thereto,
including Bank of America (together with the Bank of America Warrant Agreement,
the "1998 Warrantholders Agreements"), Bank of America received registration
rights to cause shares underlying the warrants held by it (the "Bank of America
Warrants") to be registered pursuant to the Securities Act;
WHEREAS, some of the Warrants granted in the 1997 Note Purchase Agreement
have been exercised;
WHEREAS, the terms of the Bank of America Warrant Agreement have been
amended as of the date hereof; and
WHEREAS, the parties hereto hereby desire to fully amend and restate in
full the 1997 Registration Rights Agreement and the Company's obligations to
cause the registration of
2
(EXECUTION COPY]
the Registrable Securities pursuant to the Securities Act and to add thereto
Canyon's rights to have the Shares registered hereunder;
NOW, THEREFORE, in consideration of the agreement by Canyon to provide the
benefits under the 2000 Note and Stock Purchase Agreement and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. REPRESENTATIONS WARRANTIES AGREEMENTS AND COVENANTS OF THE
COMPANY. The Company hereby represents, warrants, agrees and covenants as
follows:
1.1. The Company represents and warrants to the Holders that it has
the requisite power and authority to execute, deliver and carry out this
Agreement, that it has taken all necessary action to approve this Agreement and
to authorize the execution, delivery and performance of this Agreement, and that
this Agreement has been duly and properly executed and delivered by the Company
and constitutes the legally valid and binding obligation of the Company,
enforceable against it in accordance with its terms.
1.2. The Company represents, warrants and covenants that as of the
date hereof it has not granted, nor shall it grant for the term of this
Agreement, to any person, (except to Bank of America and then only pursuant to
the terms of the 1998 Warrantholders Agreements, as amended on the date hereof)
any registration rights with respect to the securities of the Company in terms
as or more favorable than those granted to the Holders. The Company further
represents and warrants that the registration rights granted to Bank of America
are as set forth in the 1998 Warrantholders Agreements, and covenants that it
shall not amend the 1998 Warrantholders Agreements, in any way that would grant
registration and other rights as or more favorable than those granted to the
Holders herein, without the consent of a Majority of the Holders (as defined in
this Agreement).
1.3. The Company has not prior to the date hereof granted, or has
secured the written waiver and amendment thereof (including with respect to the
rights granted under the 1998 Warrantholders Agreements), and shall not
hereafter grant to any Person (other than a Holder of Registrable Securities
hereunder) any registration rights with respect to securities of the Company, or
enter into any agreement, that would (i) entitle the holder thereof (excluding
Bank of America) to have securities owned by it included in a Demand
Registration prior to the rights granted hereunder or (ii) be otherwise
inconsistent with the terms of this Agreement.
1.4. The Company and Bank of America have added the following
Section 5.6 to the Bank of America Warrant Agreement:
"NO REDEMPTION WHILE CERTAIN AMOUNTS OUTSTANDING. Notwithstanding anything
to the contrary in Section 5 hereof, no redemption or payment can be made
by the Company under Section 5 prior to payment in full of all amounts
outstanding under the Credit Agreement, as well as payment in full of all
amounts outstanding
3
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
under the Note and Stock Purchase Agreement dated as of September 15, 2000
(the "Note Purchase Agreement") among the Company, the Borrower and
CanPartners Investments IV, LLC (other than any payments that may be due
with respect to any capital securities of the Company issued pursuant to
the Note Purchase Agreement). The Agent and the Lenders (each as defined
in the Credit Agreement) and the Purchasers (as defined in the Note
Purchase Agreement) are intended third party beneficiaries of this Section
5.6. This Section 5.6 cannot be modified without the consent of the
requisite Lenders (under the Credit Agreement) and the Purchasers holding
a majority in interest in the Notes (each as defined in the Note Purchase
Agreement), until the loans under the Credit Agreement and under the Note
Purchase Agreement have been paid in full."
Section 2. DEFINITIONS AND USAGE.
As used in this Agreement:
2.1. DEFINITIONS.
AFFILIATE shall mean, with respect to any Person, any of
(i) a director or executive officer of such Person, (ii) a spouse, parent,
sibling or descendant of such Person (or a spouse, parent, sibling or descendant
of any director or executive officer of such Person) and (iii) any other Person
that, directly or indirectly, controls, or is controlled by or is under common
control with such Person. For the purpose of this definition, "control"
(including the terms "controlling", "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities or
by contract or agency or otherwise.
AGENT. "Agent" means the principal placement agent on an
agented placement of Registrable Securities.
COMMISSION. "Commission" shall mean the Securities and
Exchange Commission.
COMMON STOCK. "Common Stock" shall mean (i) the Voting
Common Stock or the Non-Voting Common Stock, or both, as the context may
require, and (ii) shares of capital stock of the Company issued by the Company
in respect of or in exchange for shares of such common stock in connection with
any stock dividend or distribution, stock split-up, recapitalization,
recombination or exchange by the Company generally of shares of such common
stock.
CONTINUOUSLY EFFECTIVE. "Continuously Effective," with
respect to a specified registration statement, shall mean that it shall not
cease to be effective and available for Transfers of Registrable Securities
thereunder for longer than either (i) any ten (10) consecutive
4
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
business days, or (ii) an aggregate of fifteen (15) business days during the
period specified in the relevant provision of this Agreement.
DEMAND REGISTRATION. "Demand Registration" shall have the
meaning set forth in SECTION 3.1(i).
DEMANDING HOLDERS. "Demanding Holders" shall have the
meaning set forth in SECTION 3.1(il.
EXCHANGE ACT. "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended and the rules and regulations promulgated
thereunder.
HOLDERS. "Holders" shall mean Canpartners Investments IV,
LLC, Nazem & Company IV, L.P. and Transatlantic Venture Partners C.V., and
Transferees of such Persons' Registrable Securities with respect to the rights
that such Transferees shall have acquired in accordance with SECTION 9 at such
times as such Persons shall have beneficial or record ownership of Registrable
Securities. The Shares, Warrant Shares and Warrants held by each Holder on the
date hereof are listed on Schedule I hereto.
INITIAL PUBLIC OFFERING. "Initial Public Offering" means
first offering of shares of Common Stock registered pursuant to the Securities
Act.
MAJORITY OF THE HOLDERS. A "Majority of the Holders" means
those Holders holding at any time a majority of the Registrable Securities and
Transferees of such Persons' Registrable Securities with respect to the rights
that such Transferees shall have acquired in accordance with SECTION 9, at such
times as such Persons shall have beneficial or record ownership of Registrable
Securities.
1997 NOTE PURCHASE AGREEMENT. "1997 Note Purchase
Agreement" and "2000 NOTE AND STOCK PURCHASE AGREEMENT" shall have the meanings
given to each in the RECITALS.
NON-VOTING COMMON STOCK. "Non-Voting Common Stock" shall
mean the Class B common stock, par value $.001 per share, of the Company.
PERSON. "Person" shall mean any individual, corporation,
partnership, joint venture, association, joint-stock company, limited liability
company, trust, unincorporated organization or government or other agency or
political subdivision thereof.
PIGGYBACK REGISTRATION. "Piggyback Registration" shall have
the meaning set forth in SECTION 4.
PUBLIC SALE. "Public Sale" shall mean any sale of Common
Stock to the public pursuant to an offering registered under the Securities
Act or to the public through a broker, dealer or market maker pursuant to
the provisions of Rule 144 (or any successor provision then in effect)
adopted under the Securities Act.
5
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
REGISTER, REGISTERED AND REGISTRATION. "Register,"
"registered," and "registration" shall refer to a registration effected by
preparing and filing a registration statement or similar document in compliance
with the Securities Act, and the declaration or ordering by the Commission of
effectiveness of such registration statement or document or other securities
REGISTRABLE SECURITIES. "Registrable Securities" shall
mean, subject to SECTION 9: (i) the Shares or Warrant Shares owned by Holders on
the date hereof, and owned by a Holder on the date of determination, (ii) the
Warrants, (iii) any securities issued as a dividend or other distribution with
respect to, or in exchange by the Company generally for, or in replacement by
the Company generally of, such Registrable Securities; and (iii) any securities
issued in exchange for Registrable Securities in any sale, exchange, merger or
reorganization of the Company; PROVIDED, HOWEVER, that Registrable Securities
shall not include any securities which have theretofore been registered and sold
pursuant to the Securities Act or which have been sold to the public pursuant to
Rule 144 or any similar rule promulgated by the Commission pursuant to the
Securities Act. For purposes of this Agreement, a Person will be deemed to be a
holder of Registrable Securities whenever such Person has the then-existing
right to acquire such Registrable Securities (by conversion, subscription or
otherwise), whether or not such acquisition has actually been effected.
REGISTRABLE SECURITIES THEN OUTSTANDING. "Registrable
Securities then outstanding" shall mean, with respect to a specified
determination date, the Registrable Securities owned by all Holders on such
date.
REGISTRATION EXPENSES. "Registration Expenses" shall have
the meaning set forth in SECTION 7.1.
RESTRICTED SECURITIES. "Restricted Securities" shall
mean the shares of Common Stock held or to be held by a Stockholder that have
not been acquired in a Public Sale, and any securities obtained upon exchange
for or upon conversion or transfer of or as a distribution on such shares;
PROVIDED that particular securities shall cease to be Restricted Securities
when such securities shall have (x) been disposed of pursuant to a Public
Sale, (y) been otherwise transferred or exchanged and new certificates for
them not bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent disposition of them shall not require
registration or qualification of them under the Securities Act or any similar
state law then in force or (z) ceased to be outstanding.
SECURITIES ACT. "Securities Act" shall mean the Securities
Act of 1933, as amended and the rules and regulations promulgated thereunder.
SELLING HOLDERS. "Selling Holders" shall mean, with
respect to a specified registration pursuant to this Agreement, Holders whose
Registrable Securities are included in such registration.
SHARES. "Shares" shall mean the shares of Common Stock
acquired in transactions contemplated in the 2000 Note and Stock Purchase
Agreement; provided that any
6
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
such securities shall cease to be Shares when such securities shall have (x)
been disposed of pursuant to a Public Sale or (y) ceased to be outstanding.
STOCKHOLDER. "Stockholder" shall mean the persons
identified on the signature pages hereto, and such other stockholders of the
Company as may, from time to time, become parties to this Agreement in
accordance with the provisions hereof.
TRANSFER. "Transfer" shall mean and include the act of
selling, giving, transferring, creating a trust (voting or otherwise), assigning
or otherwise disposing of (other than pledging, hypothecating or otherwise
transferring as security) (and correlative words shall have correlative
meanings); PROVIDED HOWEVER, that any transfer or other disposition upon
foreclosure or other exercise of remedies of a secured creditor after an event
of default under or with respect to a pledge, hypothecation or other transfer as
security shall constitute a "Transfer".
UNDERWRITERS' REPRESENTATIVE. "Underwriters' Representative
shall mean the managing underwriter, or, in the case of a co-managed
underwriting, the managing underwriter designated as the Underwriters'
Representative by the co-managers.
VIOLATION. "Violation" shall have the meaning set forth in
SECTION 8.1.
VOTING COMMON STOCK. "Voting Common Stock" shall mean the
Class A common stock, par value $.001 per share, of the Company.
WARRANT SHARES. "Warrant Shares" shall mean (i) any shares
of Common Stock or other securities issued upon the exercise of any Warrants and
(ii) any securities issued with respect to any of such shares or other
securities referred to in clause (i) upon the conversion thereof into other
securities or by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise; PROVIDED that any of such securities shall cease
to be Warrant Shares when such securities shall have (x) been disposed of
pursuant to a Public Sale or (y) ceased to be outstanding.
WARRANTS. "Warrants" shall mean any of the Warrants issued
pursuant to the Warrant Agreement dated as of September 26, 1997 by and between
the Company and the Holders, as such Warrants may be transferred or otherwise
assigned, but only to the extent not theretofore exercised, redeemed or expired
in accordance with their respective terms.
2.2. USAGE.
(i) References to a Person are also references to its
assigns and successors in interest (by means of merger, consolidation or sale of
all or substantially all the assets of such Person or otherwise, as the case
may be).
(ii) References to Registrable Securities "owned" by a
Holder shall include Registrable Securities beneficially owned by such Person
but which are held of record in
7
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
the name of a nominee, trustee, custodian, or other agent, but shall exclude
shares of Common Stock held by a Holder in a fiduciary capacity for customers of
such Person.
(iii) References to a document are to it as amended, waived
and otherwise modified from time to time and references to a statute or other
governmental rule are to it as amended and otherwise modified from time to time
(and references to any provision thereof shall include references to any
successor provision).
(iv) References to Sections or to Schedules or Exhibits
are to sections hereof or schedules or exhibits hereto, unless the context
otherwise requires.
(v) The definitions set forth herein are equally applicable
both to the singular and plural forms and the feminine, masculine and neuter
forms of the terms defined.
(vi) The term "including" and correlative terms shall be
deemed to be followed by "without limitation" whether or not followed by such
words or words of like import.
(vii) The term "hereof' and similar terms refer to this
Agreement as a whole.
(viii) The "date of" any notice or request given
pursuant to this Agreement shall be determined in accordance with SECTION 15.
Section 3. DEMAND REGISTRATION.
3.1.
(i) If at any time after the Company completes an
Initial Public Offering, the Holders of at least 30% of the Registrable
Securities make a written request to the Company (the "Demanding Holders"),
the Company shall cause there to be filed with the Commission a registration
statement meeting the requirements of the Securities Act (a "Demand
Registration"), and each Demanding Holder shall be entitled to have included
therein (subject to SECTION 3.6) all or such number of such Demanding Holder's
Registrable Securities, as the Demanding Holder shall request in writing. Any
request made pursuant to this SECTION 3.1 shall be addressed to the attention of
the Secretary of the Company, and shall specify the number of Registrable
Securities to be registered, the intended methods of disposition thereof and
that the request is for a Demand Registration pursuant to this SECTION 3.1(i).
(ii) Whenever the Company shall have received a demand
pursuant to Section 3.1) to effect the registration of any Registrable
Securities, the Company shall promptly give written notice of such
proposed registration to all Holders. Any Holder may, within twenty (20) days
after receipt of such notice, request in writing that all of such Holder's.
Registrable Securities, or any portion thereof designated by such Holder, be
included in the registration.
(iii) Subject to SECTION 3.6, in connection with an
underwritten offering, the Company and, with the approval of the Company, other
holders of Common Stock (other
8
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
than Holders) shall be given the opportunity to include shares of Common Stock
in such offering ("Other Included Shares").
3.2. Following receipt of a request for a Demand
Registration, the Company shall:
(i) File the registration statement with the Commission
as promptly as practicable, and shall use the Company's best efforts to have the
registration declared effective under the Securities Act as soon as reasonably
practicable, in each instance giving due regard to the need to prepare current
financial statements, conduct due diligence and complete other actions that are
reasonably necessary to effect a registered public offering.
(ii) Use the Company's best efforts to keep the Demand
Registration Statement Continuously Effective for up to two hundred seventy
(270) days or until such earlier date as of which all the Registrable Securities
under the Demand Registration Statement shall have been disposed of in the
manner described in the Registration Statement, or such earlier time as the
Company would not have any obligation to include the Registrable Securities that
have not been disposed of in the manner described in the Registration Statement
in a registration pursuant to SECTION 3 or SECTION 4 pursuant to the definition
of "Registrable Securities." Notwithstanding the foregoing, if for any reason
the effectiveness of a registration pursuant to this SECTION 3 is suspended the
foregoing period shall be extended by the aggregate number of days of such
suspension or postponement.
3.3. The Company shall be obligated to effect no more
than a total of three Demand Registrations, only two of which need be on Form
S-1 or its equivalent. For purposes of the preceding sentence, the registration
shall not be deemed to have been effected (i) unless a registration statement
with respect thereto has become effective, (ii) if after such registration
statement has become effective, such registration or the related offer, sale or
distribution of Registrable Securities thereunder 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 not attributable to the Selling
Holders and such interference is not thereafter eliminated, or (iii) if the
conditions to closing specified in the underwriting agreement, if any, entered
into in connection with such registration are not satisfied or waived, other
than by reason of a failure on the part of the Selling Holders. If the Company
shall have complied with its obligations under this Agreement, a right to a
Demand Registration pursuant to this Section 3 shall be deemed to have been
satisfied upon the earlier of (i) the date as of which all of the Registrable
Securities included therein shall have been disposed of pursuant to the
Registration Statement, and (ii) the date as of which such Demand Registration
shall have been Continuously Effective for a period of two hundred seventy (270)
days. Any Demand Registration Statement which, after filing with the Commission
is withdrawn by the Holders, shall be deemed to have been effective in
determining the number of Demand Registrations the Company is obligated to
effect hereunder.
3.4. A registration pursuant to this SECTION 3 shall he
on such appropriate registration form of the Commission as shall (i) be selected
by the Company and be reasonably acceptable to the Demanding Holders and (ii)
permit the disposition of the
9
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
Registrable Securities in accordance with the intended method or methods of
disposition specified in the request pursuant to SECTION 3.1(i).
3.5. If any registration pursuant to SECTION 3 involves
an underwritten offering (whether on a "firm," "best efforts" or "all reasonable
efforts" basis or otherwise), or an agented offering, the Demanding Holders,
shall have the right to select the underwriter or underwriters and manager or
managers to administer such underwritten offering or the placement agent or
agents for such agented offering; provide , however, that each Person so
selected shall be reasonably acceptable to the Company.
3.6. Whenever the Company shall effect a registration
pursuant to this SECTION 3 in connection with an underwritten offering by one or
more Selling Holders of Registrable Securities: if the Underwriters'
Representative or Agent advises each such Selling Holder in writing that, in its
opinion, the amount of securities requested to be included in such offering
(whether by Selling Holders or others) exceeds the amount which can be sold in
such offering within a price range acceptable to the Demanding Holders,
securities shall be included in such offering and the related registration, to
the extent of the amount which can be sold within such price range; first for
the account of the Demanding Holders, second by all other Selling Holders on a
pro rata basis and third by the Company and other holders with respect to the
Other Included Shares.
Section 4. PIGGYBACK REGISTRATION.
4.1. If at any time the Company proposes to register
(including for this purpose a registration effected by the Company for holders
of the Company's securities other than the Holders) securities under the
Securities Act in connection with the public offering solely for cash on Form
X-0, X-0 or S-3 (or any comparable or replacement or successor forms), the
Company shall promptly give each Holder of Registrable Securities written notice
of such registration (a "Piggyback Registration"). Upon the written request of
each Holder given within 20 days following the date of such notice, the Company
shall cause to be included in such registration statement and use its best
efforts to be registered under the Securities Act all the Registrable Securities
that each such Holder shall have requested to be registered; PROVIDED, HOWEVER,
that such right of inclusion shall not apply to the registration statement for
the Initial Public Offering unless the Underwriters' Representative or Agent
expressly consents thereto or unless Bank of America is allowed to sell in the
Initial Public Offering. 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 4 without any obligation or liability to any Holder.
4.2. If the Underwriters' Representative or Agent shall
advise the Company in writing (with a copy to each Selling Holder) that, in its
opinion, the amount of Registrable Securities requested to be included in such
registration would materially adversely affect such offering, or the timing
thereof, 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 and, if applicable, all securities
proposed to be sold by such holders other
10
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
than the Holders for which such registration is made, in accordance with the
agreement between the Company and such holders; second, the Registrable
Securities requested to be included in such registration by Holders pursuant to
this SECTION 4 and the Registrable Securities (as such term is defined in the
1998 Warrantholders Agreements) requested to be included in such registration,
pro rata based on the estimated gross proceeds from the sale thereof; third, all
other securities being registered pursuant to the exercise of contractual rights
comparable to the rights granted in this SECTION 4, pro rata based on the
estimated gross proceeds from the sale thereof; and fourth, all other securities
requested to be included in such registration.
4.3. Each Holder shall be entitled to have its
Registrable Securities included in an unlimited number of Piggyback
Registrations pursuant to this SECTION 4.
4.4. If the Company has previously filed a registration
statement with respect to Registrable Securities pursuant to SECTION 3 or
pursuant to this SECTION 4, and if such previous registration has not been
withdrawn or abandoned, the Company will not file or cause to be effected any
other registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Securities
Act (except on Form X-0, X-0 or any equivalent or successor forms thereto),
whether on its own behalf or at the request of any holder or holders of such
securities, until a period of 180 days has elapsed from the effective date of
such a previous registration, or, if such registration was for an underwritten
offering, such shorter period of days as the Underwriter's Representative or
Agent shall have given its consent.
4.5. The Company shall have no obligation under SECTIONS
3 and 4 to register any Registrable Securities of a Holder if the Company shall
deliver to the Holders requesting such registration an opinion of counsel
reasonably satisfactory to such Holders and its counsel to the effect that the
proposed sale or disposition of all of the Registrable Securities for which
registration was requested does not require registration under the Securities
Act for any sales or dispositions of such shares within the period set forth in
Rule 144(e), currently three (3) months.
Section 5. REGISTRATION PROCEDURES. Whenever required under
SECTION 3 or SECTION 4 to effect the registration of any Registrable Securities,
the Company shall, as expeditiously as practicable:
5.1. Prepare and file with the Commission a registration
statement with respect to such Registrable Securities and use the Company's best
efforts to cause such registration statement to become effective; PROVIDED,
HOWEVER, that before filing a registration statement or prospectus or any
amendments or supplements thereto, including documents incorporated by reference
after the initial filing of the registration statement and prior to
effectiveness thereof, the Company shall furnish to one firm of counsel for the
Selling Holders (selected by the Demanding Holders) copies of all such
documents in the form substantially as proposed to be filed with the
Commission at least four (4) business days prior to filing for review and
comment by such counsel, which opportunity to comment shall include an absolute
right to
11
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
control or contest disclosure if the applicable Selling Holder reasonably
believes that it may be subject to controlling person liability under applicable
securities laws with respect thereto.
5.2. Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act and rules thereunder with respect to the
disposition of all securities covered by such registration statement. If the
registration is for an underwritten offering, the Company shall amend the
registration statement or supplement the prospectus whenever required by the
terms of the underwriting agreement entered into pursuant to SECTION 6.2. The
Company shall amend the registration statement or supplement the prospectus so
that it will remain current and in compliance with the requirements of the
Securities Act for the period after its effective date during which the Demand
Registration is to be kept Continuously Effective by the Company pursuant to
SECTION 3.3(ii), and if during such period any event or development occurs as a
result of which the registration statement or prospectus contains a misstatement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, the Company
shall promptly notify each Selling Holder, amend the registration statement or
supplement the prospectus so that each will thereafter comply with the
Securities Act and furnish to each Selling Holder of Registrable Securities such
amended or supplemented prospectus, which each such Holder shall thereafter use
in the Transfer of Registrable Securities covered by such registration
statement. Pending such amendment or supplement each such Holder shall cease
making offers or Transfers of Registrable Securities pursuant to the prior
prospectus. In the event that any Registrable Securities included in a
registration statement subject to, or required by, this Agreement remain unsold
at the end of the period during which the Company is obligated to use its best
efforts to maintain the effectiveness of such registration statement, the
Company may file a post-effective amendment to the registration statement for
the purpose of removing such Securities from registered status.
5.3. Furnish to each Selling Holder of Registrable Securities,
without charge, such numbers of copies of the registration statement, any
pre-effective or post-effective amendment thereto, the prospectus, including
each preliminary prospectus and any amendments or supplements thereto, in each
case in conformity with the requirements of the Securities Act and the rules
thereunder, and such other related documents as any such Selling Holder may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by such Selling Holder.
5.4. Use the Company's best efforts (i) to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such states or jurisdictions as shall be reasonably requested
by the Underwriters' Representative or Agent (as applicable, or if inapplicable,
the Demanding Holders) and (ii) to obtain the withdrawal of any order suspending
the effectiveness of a registration statement, or the lifting of any suspension
of the qualification (or exemption from qualification) of the offer and transfer
of any of the Registrable Securities in any jurisdiction, at the earliest
possible moment; PROVIDED, HOWEVER, that the Company shall not be required in
connection therewith or as a condition
12
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
5.5. In the event of any underwritten or agented offering, enter
into and perform the Company's obligations under an underwriting or agency
agreement (including indemnification and contribution obligations of
underwriters or agents), in usual and customary form, with the managing
underwriter or underwriters of or agents for such offering. The Company shall
also cooperate with the Demanding Holders and the Underwriters' Representative
or Agent for such offering in the marketing of the Registrable Securities,
including making available the Company's officers, accountants, counsel,
premises, books and records for such purpose, but the Company shall not be
required to incur any material out-of-pocket expense pursuant to this sentence.
5.6. Promptly notify each Selling Holder of any stop order issued or
threatened to be issued by the Commission in connection therewith and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.
5.7. Make generally available to the Holders copies of all periodic
reports, proxy statements, and other information referred to in SECTION 13.1 and
an earnings statement satisfying the provisions of Section 11 (a) of the
Securities Act no later than 90 days following the end of the 12-month period
beginning with the first month of the Company's first fiscal quarter commencing
after the effective date of each registration statement filed pursuant to this
Agreement.
5.8. Make available for inspection by any Selling Holder, any
underwriter participating in such offering and the representatives of such
Selling Holder and Underwriter (but not more than one firm of counsel to such
Selling Holders), all financial and other information as shall be reasonably
requested by them, and provide the Selling Holder, any underwriter participating
in such offering and the representatives of such Selling Holder and Underwriter
the opportunity to discuss the business affairs of the Company with its
principal executives and independent public accountants who have certified the
audited financial statements included in such registration statement, in each
case all as necessary to enable them to exercise their due diligence
responsibility under the Securities Act; PROVIDED, HOWEVER, that information
that the Company determines, in good faith, to be confidential and which the
Company advises such Person in writing, is confidential shall not be disclosed
unless such Person signs a confidentiality agreement reasonably satisfactory to
the Company or the related Selling Holder of Registrable Securities agrees to be
responsible for such Person's breach of confidentiality on terms reasonably
satisfactory to the Company.
5.9. Use the Company's best efforts to obtain a so-called "comfort
letter" from its independent public accountants, and legal opinions of counsel
to the Company addressed to the Selling Holders, in customary form and covering
such matters of the type customarily covered by such letters, and in a form that
shall be reasonably satisfactory to Demanding Holders. The Company shall
furnish to each Selling Holder a signed counterpart of any such comfort letter
or legal opinion. Delivery of any such opinion or comfort letter shall be
13
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
subject to the recipient furnishing such written representations or
acknowledgments as are customarily provided by selling shareholders who receive
such comfort letters or opinions.
5.10. Provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement.
5.11. Use all reasonable efforts to cause the Registrable Securities
covered by such registration statement (i) if the Common Stock is then listed on
a securities exchange or included for quotation in a recognized trading market,
to continue to be so listed or included for a reasonable period of time after
the offering, and (ii) to be registered with or approved by such other United
States or state governmental agencies or authorities as may be necessary by
virtue of the business and operations of the Company to enable the Selling
Holders of Registrable Securities to consummate the disposition of such
Registrable Securities.
5.12. Use the Company's reasonable efforts to provide a CUSIP number
for the Registrable Securities prior to the effective date of the first
registration statement including Registrable Securities.
5.13. Take such other actions as are reasonably required in order to
expedite or facilitate the disposition of Registrable Securities included in
each such registration.
Section 6. SELLING HOLDERS' OBLIGATIONS. It shall be a condition precedent
to the obligations of the Company to take any action pursuant to this Agreement
with respect to the Registrable Securities of any Selling Holder of Registrable
Securities that such Selling Holder shall:
6.1. Furnish to the Company such information regarding such Selling
Holder, the number of the Registrable Securities owned by it, and the intended
method of disposition of such securities as shall be required to effect the
registration of such Selling Holder's Registrable Securities, and to cooperate
with the Company in preparing such registration.
6.2. Agree to sell their Registrable Securities to the underwriters
at the same price and on substantially the same terms and conditions as the
Company or the other Persons on whose behalf the registration statement was
being filed have agreed to sell their securities, and to execute the
underwriting agreement agreed to by the Demanding Holders (in the case of a
registration under SECTION 3), or the Company and the Selling Holders (in the
case of a registration under SECTION 4).
Section 7. EXPENSES OF REGISTRATION. Expenses in connection with
registrations pursuant to this Agreement shall be allocated and paid as follows:
7.1. With respect to each Demand Registration, the Company shall
bear and pay all expenses incurred in connection with any registration, filing,
or qualification of
14
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
Registrable Securities with respect to such Demand Registration for each Selling
Holder (which right may be assigned to any Person to whom Registrable Securities
are Transferred as permitted by SECTION 9), including all registration, filing
and National Association of Securities Dealers, Inc. 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 reasonable fees and
disbursements of counsel for the Company, and of the Company's independent
public accountants, including the expenses of "cold comfort" letters required by
or incident to such performance and compliance, and the reasonable fees and
disbursements of one firm of counsel for the Selling Holders of Registrable
Securities (selected by Demanding Holders owning a majority of the Registrable
Securities owned by Demanding Holders to be included in a Demand Registration)
(the "Registration Expenses"), but excluding underwriting discounts and
commissions relating to Registrable Securities (which shall be paid on a pro
rata basis by the Selling Holders), PROVIDED that, in addition, the Company
shall pay all Registration Expenses in connection with any Demand Registration
pursuant to which less than fifty percent (50%) of the Registrable Securities
requested to be registered by such Holders are registered, but no such
registration shall be counted as a Demand Registration for purposes of Section
3.3.
7.2. The Company shall bear and pay all Registration Expenses
incurred in connection with any Piggyback Registrations pursuant to SECTION 4
for each Selling Holder (which right may be Transferred to any Person to whom
Registrable Securities are Transferred as permitted by SECTIONS 9), but
excluding underwriting discounts and commissions relating to Registrable
Securities (which shall be paid on a pro rata basis by the Selling Holders of
Registrable Securities).
7.3. Any failure of the Company to pay any Registration Expenses as
required by this SECTION 7 shall not relieve the Company of its obligations
under this Agreement.
Section 8. INDEMNIFICATION; CONTRIBUTION. If any Registrable Securities
are included in a registration statement under this Agreement:
8.1. To the extent permitted by applicable law, the Company shall
indemnify and hold harmless each Selling Holder, each Person, if any, who
controls such Selling Holder within the meaning of the Securities Act, and each
officer, director, partner, employee, agent and consultant of such Selling
Holder and such controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint or several), including attorneys' fees and
disbursements and expenses of investigation, incurred by such party pursuant to
any actual or threatened action, suit, proceeding or investigation, or to which
any of the foregoing Persons may become subject under the Securities Act, the
Exchange Act or other federal or state laws, insofar as such losses, claims,
damages, liabilities and expenses arise out of or are based upon any of the
following statements, omissions or violations (collectively a "Violation"):
(i) Any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein, or any amendments or
supplements thereto;
15
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
(ii) The omission or alleged omission to state therein a material
fact required to be stated therein, or necessary to make the statements therein
not misleading; or
(iii) Any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any applicable state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange Act or any
applicable state securities law;
PROVIDED, HOWEVER, that the indemnification required by this SECTION 8.1 shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or expense if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or expense to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written information
furnished to the Company by the indemnified party expressly for use in
connection with such registration; PROVIDED, FURTHER, that the indemnity
agreement contained in this SECTION 8 shall not apply to any underwriter to the
extent that any such loss is based on or arises out of an untrue statement or
alleged untrue statement of a material fact, or an omission or alleged omission
to state a material fact, contained in or omitted from any preliminary
prospectus if the final prospectus shall correct such untrue statement or
alleged untrue statement, or such omission or alleged omission, and a copy of
the final prospectus has not been sent or given to such person at or prior to
the confirmation of sale to such person if such underwriter was under an
obligation to deliver such final prospectus and failed to do so. The Company
shall also indemnify underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, their
officers, directors, agents and employees and each person who controls such
persons (within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act) to the same extent as provided above with respect to the
indemnification of the Selling Holders.
8.2. To the extent permitted by applicable law, each Selling Holder
shall indemnify and hold harmless the Company, each of its directors, each of
its officers who shall have signed the registration statement, each Person, if
any, who controls the Company within the meaning of the Securities Act, any
other Selling Holder, any controlling Person of any such other Selling Holder
and each officer, director, partner, and employee of such other Selling Holder
and such controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint and several), including attorneys' fees and
disbursements and expenses of investigation, incurred by such party pursuant to
any actual or threatened action, suit, proceeding or investigation, or to which
any of the foregoing Persons may otherwise become subject under the Securities
Act, the Exchange Act or other federal or state laws, insofar as such losses,
claims, damages, liabilities and expenses arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Selling Holder expressly for use in connection with such
registration; PROVIDED, HOWEVER, (x) that the indemnification required by this
SECTION 8.2 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or expense if settlement is effected without the
consent of the relevant Selling Holder of Registrable Securities, which consent
shall not be unreasonably withheld and (y) in no event shall the
16
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
amount of any indemnity under this Section 8.2 exceed the net proceeds from the
applicable offering received by such Selling Holder.
8.3. Promptly after receipt by an indemnified party under this
SECTION 8 of notice of the commencement of any action, suit, proceeding,
investigation or threat thereof made in writing for which such indemnified party
may make a claim under this SECTION 8, such indemnified party shall deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party shall
have the right to retain its own counsel, with the fees and disbursements and
expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time following the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this SECTION
8 but shall not relieve the indemnifying party of any liability that it may have
to any indemnified party otherwise than pursuant to this SECTION 8. Any
reasonable fees and expenses incurred by the indemnified party (including any
fees and expenses incurred in connection with investigating or preparing to
defend such action or proceeding) shall be paid to the indemnified party, as
incurred, within thirty (30) days of written notice thereof to the indemnifying
party (regardless of whether it is ultimately determined that an indemnified
party is not entitled to indemnification hereunder). Any such indemnified party
shall have the right to employ separate counsel in any such action, claim or
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be the expenses of such indemnified party unless (i) the
indemnifying party has agreed to pay such fees and expenses or (ii) the
indemnifying party shall have failed to promptly assume the defense of such
action, claim or proceeding or (iii) the named parties to any such action, claim
or proceeding (including any impleaded parties) include both such indemnified
party and the indemnifying party, and such indemnified party shall have been
advised by counsel that there may be one or more legal defenses available to it
which are different from or in addition to those available to the indemnifying
party and that the assertion of such defenses would create a conflict of
interest such that counsel employed by the indemnifying party could not
faithfully represent the indemnified party (in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such action, claim or
proceeding on behalf of such indemnified party, it being understood, however,
that the indemnifying party shall not, in connection with any one such action,
claim or proceeding or separate but substantially similar or related actions,
claims or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (together with appropriate local
counsel) at any time for all such indemnified parties, unless in the reasonable
judgment of such indemnified party a conflict of interest may exist between such
indemnified
17
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
party and any other of such indemnified parties with respect to such action,
claim or proceeding, in which event the indemnifying party shall be obligated to
pay the fees and expenses of such additional counsel or counsels). No
indemnifying party shall be liable to an indemnified party for any settlement of
any action, proceeding or claim without the written consent of the indemnifying
party, which consent shall not be unreasonably withheld.
8.4: If the indemnification required by this SECTION 8 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to in this
SECTION 8:
(i) 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 losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether any Violation has been committed by, or relates to information supplied
by, such indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such Violation. 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, subject to the limitations set forth in SECTION 8.1 and SECTION 8.2,
any legal or other fees or expenses reasonably incurred by such party. in
connection with any investigation or proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this SECTION 8.4 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 SECTION 8.4(i). 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.
8.5. If indemnification is available under this SECTION 8, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in this SECTION 8 without regard to the relative fault of such
indemnifying party or indemnified party or any other equitable consideration
referred to in SECTION 8.4.
8.6. The obligations of the Company and the Selling Holders of
Registrable Securities under this SECTION 8 shall survive the completion of any
offering of Registrable Securities pursuant to a registration statement under
this Agreement, and otherwise.
Section 9. TRANSFER OF REGISTRATION RIGHTS AND REGISTRABLE SECURITIES.
Rights with respect to Registrable Securities may be Transferred as follows: (i)
the rights of a Holder to require a Demand Registration pursuant to SECTION 3
may be Transferred to any Person in connection with the Transfer to such Person
by such Holder of at least 10,000 shares or share equivalents of Registrable
Securities, and (ii) the rights of a Holder to require a Piggyback
18
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
Registration pursuant to SECTION 4 may be Transferred by such Holder to any
Person in connection with the Transfer of Registrable Securities to such Person,
in all cases, if (x) any such Transferee that is not a party to this Agreement
shall have executed and delivered to the Secretary of the Company a properly
completed agreement substantially in the form of EXHIBIT A, and (y) the
Transferor shall have delivered to the Secretary of the Company, not later than
15 days following the date of the Transfer, written notification of such
Transfer setting forth the name of the Transferor, name and address of the
Transferee, and the number of Registrable Securities which shall have been so
Transferred.
Section 10. TAG-ALONG RIGHTS
10.1. OFFER TO HOLDERS. If any Stockholder or any of its Affiliates
(any such Person for purposes of this Section 10, the "Transferor") wishes to
transfer its shares of Common Stock or any portion thereof to any Person (the
"Transferee"), the Transferor shall first give to the Company and each Holder
(pursuant to a list provided by the Company) a written notice (a "Transfer
Notice"), executed by it and the Transferee and containing (i).the number of
shares of Common Stock that the Transferee proposed to acquire from the
Transferor, (ii) the name and address of the Transferee, (iii) the proposed
purchase price, terms of payment and other material terms and conditions of such
proposed transfer, (iv) an estimate, in the Transferor's reasonable judgment, of
the fair market value of any non-cash consideration offered by the Transferee
and (v) an offer by the Transferee or Transferor to purchase, upon the purchase
by the Transferee of any shares of Common Stock owned by the Transferor and for
the same per share consideration, that number of shares of Registrable
Securities (or if such number is not an integral number, the next integral
number which is greater than such number) of each Holder which shall be the
product of (x) the aggregate number of shares of Registrable Securities either
then owned, or issuable upon exercise of Warrants then owned, by such Holder and
(y) a fraction, the numerator of which shall be the number of shares of Common
Stock indicated in the Transfer Notice as subject to purchase by the Transferee
and the denominator of which shall be the sum of (A) the total number of shares
of Common Stock then owned by the Transferor and its Affiliates plus (B) the
total number of shares of Registrable Securities either then owned, or issuable
upon exercise of Warrants then owned, by each Holder. Each Holder shall have the
right, for a period of 20 days after the Transfer Notice is given, to accept
such offer in whole or in part, exercisable by delivering a written notice to
the Transferor and the Company within such 20-day period, stating therein the
number of shares of Common Stock (which may be the number of shares set forth in
the offer by the Transferor or Transferee, as the case may be, or a portion
thereof) to be sold by such Holder to the Transferor or Transferee, as the case
may be. Prior to the earlier of (x) the end of such 20-day period or (y) the
acceptance or rejection by each Holder of the Transferee's or Transferor's
offer, as the case may be, neither the Transferor nor its Affiliates will
complete any sale of shares of Common Stock to the Transferee. Thereafter, for a
period of 60 days after the prohibition under the preceding sentence shall have
terminated, the Transferor may sell to the Transferee for the consideration
stated and on the terms set forth in the Transfer Notice the shares of Common
Stock stated in the Transfer Notice as subject to purchase by the Transferee,
PROVIDED that the Transferor or Transferee, as the case may be, shall
simultaneously purchase the number of shares of Common Stock as calculated above
from those Holders who have accepted the Transferor's or Transferee's offer, as
the case may be. The
19
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
provisions of this Section 10.1 shall not apply to transfers between the
Transferor and any of its Affiliates or between Affiliates of the Transferor,
provided that such Affiliates execute such agreements as the Holders may
reasonably request agreeing to be bound by the provisions hereof. Any purported
transfer by a Stockholder of shares of Common Stock without compliance with the
applicable provisions of this Section 10.1 shall be void and of no effect and
the transferee shall have no rights as a Stockholder. In the event of any such
non-complying transfer, the Company shall not transfer such shares of Common
Stock on its books or recognize the purported transferee as a shareholder until
all applicable provisions of this Section 10.1 have been complied with.
10.2. LEGEND ON CERTIFICATES.
(a) The Company shall use its best efforts to cause each stock
certificate representing shares of Common Stock subject to the restrictions of
Section 10.1 within 10 days of the date hereof to be stamped or otherwise
imprinted with a legend in substantially the following form (and Canyon shall be
provided with evidence of the foregoing):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TAG-ALONG
RIGHTS HELD BY CERTAIN SHAREHOLDERS OF THE COMPANY, PURSUANT TO AN AMENDED
AND RESTATED REGISTRATION AND SHAREHOLDERS RIGHTS AGREEMENT DATED AS OF
SEPTEMBER 15, 2000 AMONG AMERICAN PSYCH SYSTEMS HOLDINGS, INC., AND THE
STOCKHOLDERS AND OTHER PARTIES THEREOF, COPIES OF WHICH ARE ON FILE WITH
AMERICAN PSYCH SYSTEMS HOLDINGS, INC.
(b) Unless otherwise expressly provided herein, each certificate for
Restricted Securities and each certificate issued in exchange for or upon
transfer of any thereof held by the Stockholders shall be stamped or otherwise
imprinted with a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR OFFERED FOR SALE
UNLESS REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS
OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO AN AMENDED AND
RESTATED REGISTRATION AND SHAREHOLDERS RIGHTS AGREEMENT DATED AS OF
SEPTEMBER 15, 2000 AMONG AMERICAN PSYCH SYSTEMS HOLDINGS, INC., AND THE
STOCKHOLDERS AND OTHER PARTIES THEREOF, COPIES OF WHICH ARE ON FILE WITH
AMERICAN PSYCH SYSTEMS HOLDINGS, INC.
(c) Any other provision of this Agreement to the contrary
notwithstanding, no transfer of any Restricted Securities of a Stockholder other
than pursuant to a Public Sale may be
20
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
made to any Person unless such Person shall have agreed in writing that such
Person, as a holder of Restricted Securities, and the Restricted Securities it
acquires, shall be bound by and be entitled to the benefits of all the
provisions of this Agreement applicable to such Restricted Securities (and upon
such agreement such Persons shall be entitled to such benefits). Any purported
transfer of Restricted Securities without compliance with the applicable
provisions of this Agreement shall be void and of no effect, and the purported
transferee shall have no rights as a Warrantholder or Stockholder (as
applicable) or under this Agreement. In the event of such non-complying
transfer, the Company shall not transfer any such Restricted Securities on its
books or recognize the purported transferee as a shareholder or warrantholder,
as the case may be, for any purpose, until all applicable provisions of this
Agreement have been complied with.
10.3. PERMITTED TRANSFERS. The restrictions on transfer provided in
this Section 10 shall not be applicable to (i) any transfer in compliance with
federal and all applicable state securities laws to an Affiliate of the holder
of Restricted Securities, from an Affiliate of such holder to such holder or
between Affiliates of such holder (if any such Affiliate to whom shares of
Restricted Securities have been transferred by a holder thereof ceases to be an
Affiliate of such holder of Restricted Securities, such Restricted Securities
shall immediately be transferred back to the transferor thereof), (ii) any
transfer upon the death of any holder of Restricted Securities to such holder's
executors, administrators or testamentary trustees or (iii) any transfer to a
trust the beneficiaries of which include only the holder of such Restricted
Securities or such holder's spouse, parents, siblings or descendants (any
transferee referred to in (i), (ii) or (iii) above being referred to herein as a
"Permitted Transferee"); PROVIDED that no such transfer shall be made to any
Permitted Transferee unless such Permitted Transferee shall have agreed in
writing that such Permitted Transferee, as a Stockholder (as the case may be),
and the shares of Common Stock it acquires, shall be bound by all the provisions
of this Agreement applicable to Common Stock.
Section 11. REDEMPTION OF WARRANTS
11.1. MANDATORY OFFER TO REDEEM BANK OF AMERICA WARRANTS. The
Company has granted Bank of America the right to cause the Company to redeem the
Bank of America Warrants pursuant to Article 5 of the Bank of America Warrant
Agreement. The Company represents and warrants that it has not granted any
other similar redemption rights to any other Person. The Company covenants that
it shall not grant any other redemption rights to common stock, warrants or
other equity securities to any other Person with respect to the Company's
securities unless the Company makes such rights available to each of the Holders
on terms at least as favorable as those offered to such other Person.
11.2. NOTICES. The Company shall give notice to each of the Holders
of any event which may allow the exercise of the Redemption Rights under the
Bank of America Warrant Agreement, and notifying each Holder of its rights under
this Section 11.
11.3. NO REDEMPTION WHILE CERTAIN AMOUNTS OUTSTANDING. No redemption
or payment can be made by the Company under Section 5 of the Bank of America
Warrant Agreement prior to payment in full of all amounts outstanding under the
2000 Note and
21
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
Stock Purchase Agreement (other than any payments that may be due with respect
to any capital securities of the Company issued pursuant to the 2000 Note and
Stock Purchase Agreement). The Purchasers (as defined in the 2000 Note and Stock
Purchase Agreement) are intended third party beneficiaries of this Section 11.3.
This Section 11.3 cannot be modified without the consent of the Purchasers
holding a majority in interest in the Notes (each as defined in the 2000 Note
and Stock Purchase Agreement), until the loans under the 2000 Note and Stock
Purchase Agreement have been paid in full.
Section 12. HOLDBACK. Each Holder entitled pursuant to this Agreement to
have Registrable Securities included in a registration statement prepared
pursuant to this Agreement, if so requested by the Underwriters' Representative
or Agent in connection with an offering of any Registrable Securities, shall not
effect any public sale or distribution of shares of Common Stock or any
securities convertible into or exchangeable or exercisable for shares of Common
Stock, including a sale pursuant to Rule 144 under the Securities Act (except as
part of such underwritten or agented registration), during the ten (10) business
days prior to, and during such period as the Underwriter's Representative or
Agent may request, not to exceed a period of ninety (90) days, beginning on, the
date such registration statement is declared effective under the Securities Act
by the Commission, PROVIDED that such Holder is timely notified of such
effective date in writing by the Company or such Underwriters' Representative or
Agent and provided further that all officers and directors of the Company, other
holders of Common Shares and warrants representing five-percent (5%) or more of
the Company's Common Stock, and Bank of America as to any securities of the
Company held by such Person, and all other persons with registration rights
(whether or not pursuant to this Agreement) agree to similar restrictions and
comply therewith (and if such persons are thereafter released, the Holders shall
similarly be released). In order to enforce the foregoing covenant, the Company
shall be entitled to impose stop-transfer instructions with respect to the
Registrable Securities of each Holder until the end of such period.
Section 13. COVENANTS OF THE COMPANY. The Company hereby covenants to the
Holders as follows:
13.1. With a view to making available to the Holders the benefits of
Rule 144 promulgated under the Securities Act and any other rule or regulation
of the SEC that may at any time permit a Holder to sell securities of the
Company to the public without registration or pursuant to a registration on Form
S-3, the Company agrees to:
(i) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public and so long as
the Company remains subject to the periodic reporting requirements under
Sections 13 or 15(d) of the Exchange Act;
(ii) take such action, including the voluntary registration of its
Common Stock under Section 12 of the Exchange Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as
22
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
practicable after the end of the fiscal year in which the first registration
statement filed by the Company for the offering of its securities to the general
public is declared effective;
(iii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(iv) furnish to any Holder, so long as accurate and so long as the
Holder owns any Registrable Securities, forthwith upon request (a) a written
statement by the Company that it has complied with the reporting requirements of
SEC Rule 144 (at any time after ninety (90) days after the effective date of the
first registration statement filed by the Company), the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), or that it qualifies as a registrant whose securities may be
resold pursuant to Form S-3 (at any time after it so qualifies), (b) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (c) such other information or
opinions as may be reasonably requested in availing any Holder of any rule or
regulation of the SEC which permits the selling of any such securities without
registration or pursuant to such form.
13.2. (i) The Company shall not, and shall not permit its majority
owned subsidiaries to, effect any public sale or distribution of any shares of
Common Stock or any securities convertible into or exchangeable or exercisable
for shares of Common Stock, during the ten (10) business days prior to, and
during the 180 day period beginning on, the commencement of a public
distribution of the Registrable Securities pursuant to any registration pursuant
to this Agreement (other than by the Company pursuant to such registration).
(ii) Any agreement entered into after the date of this Agreement
pursuant to which the Company or any of its majority owned subsidiaries issues
or agrees to issue any privately placed securities similar to any issue of the
Registrable Securities (other than (x) shares of Common Stock pursuant to a
stock incentive, stock option, stock bonus, stock subscription or other employee
benefit plan of the Company approved by its Board of Directors, and (y)
securities issued to Persons in exchange for ownership interests in any Person
in connection with a business combination in which the Company or any of its
majority owned subsidiaries is a party) shall contain a provision whereby
holders of such securities agree not to effect any public sale or distribution
of any such securities during the periods described in SECTION 12, in each case
including a sale pursuant to Rule 144 under the Securities Act (unless such
Person is prevented by applicable statute or regulation from entering into such
an agreement).
13.3. The Company shall not, directly or indirectly, (x) enter into
any merger, consolidation or reorganization in which the Company shall not be
the surviving corporation or (y) Transfer or agree to Transfer all or
substantially all the Company's assets, unless prior to such merger,
consolidation, reorganization or asset Transfer, the surviving corporation or
the Transferee, respectively, shall have agreed in writing to assume the
obligations of the Company under this Agreement, and for that purpose references
hereunder to "Registrable Securities" shall be deemed to include the securities
which the Holders of
23
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
Registrable Securities would be entitled to receive in exchange for Registrable
Securities pursuant to any such merger, consolidation or reorganization.
Section 14. AMENDMENT, MODIFICATION AND WAIVERS; FURTHER ASSURANCES.
(i) This Agreement may be amended with the consent of the Company
and the Holders, and the Company may take any action herein prohibited, or omit
to perform any act herein required to be performed by it, only if the Company
shall have obtained the written consent of Holders owning Registrable Securities
possessing a Majority of the Registrable Securities then outstanding to such
amendment, action or omission to act.
(ii) No waiver of any terms or conditions of this Agreement shall
operate as a waiver of any other breach of such terms and conditions or any
other term or condition, nor shall any failure to enforce any provision hereof
operate as a waiver of such provision or of any other provision hereof. No
written waiver hereunder, unless it by its own terms explicitly provides to the
contrary, shall be construed to effect a continuing waiver of the provisions
being waived and no such waiver in any instance shall constitute a waiver in any
other instance or for any other purpose or impair the right of the party against
whom such waiver is claimed in all other instances or for all other purposes to
require full compliance with such provision.
(iii) Each of the parties hereto shall execute all such further
instruments and documents and take all such further action as any other party
hereto may reasonably require in order to effectuate the terms and purposes of
this Agreement.
Section 15. ASSIGNMENT; BENEFIT. This Agreement and all of the provisions
hereof shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, assigns, executors, administrators or
successors; PROVIDED, HOWEVER, that except as specifically provided herein with
respect to certain matters, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned or delegated by the Company
without the prior written consent of Holders owning Registrable Securities
possessing a majority in number of the Registrable Securities outstanding on the
date as of which such delegation or assignment is to become effective. A Holder
may Transfer its rights with respect to requiring Demand Registrations and
Piggyback Registrations hereunder to a successor in interest to the Registrable
Securities owned by such assignor only as permitted by SECTION 9.
Section 16. MISCELLANEOUS.
16.1. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
16.2. NOTICES. All notices and requests given pursuant to this
Agreement shall be in writing and shall be made by hand-delivery, first-class
mail (registered or certified,
24
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
return receipt requested), confirmed facsimile or overnight air courier
guaranteeing next business day delivery to the relevant address specified on
SCHEDULE I to this Agreement or in the relevant agreement in the form of EXHIBIT
A whereby such party became bound by the provisions of this Agreement. Except as
otherwise provided in this Agreement, the date of each such notice and request
shall be deemed to be, and the date on which each such notice and request shall
be deemed given shall be: at the time delivered, if personally delivered or
mailed; when receipt is acknowledged, if sent by facsimile; and the next
business day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next business day delivery.
16.3. ENTIRE AGREEMENT; INTEGRATION. This Agreement supersedes all
prior agreements between or among any of the parties hereto with respect to the
subject matter contained herein and therein, and such agreements embody the
entire understanding among the parties relating to such subject matter.
16.4. INJUNCTIVE RELIEF. Each of the parties hereto acknowledges
that in the event of a breach by any of them of any material provision of this
Agreement, the aggrieved party may be without an adequate remedy at law. Each of
the parties therefore agrees that in the event of such a breach hereof the
aggrieved party may elect to institute and prosecute proceedings in any court of
competent jurisdiction to enforce specific performance or to enjoin the
continuing breach hereof. By seeking or obtaining any such relief, the aggrieved
party shall not be precluded from seeking or obtaining any other relief to which
it may be entitled.
16.5. SECTION HEADINGS. Section headings are for convenience of
reference only and shall not affect the meaning of any provision of this
Agreement.
16.6. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and all of which shall
together constitute one and the same instrument. All signatures need not be on
the same counterpart.
16.7. SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable, such invalidity or unenforceability shall not affect
the validity and enforceability of the remaining provisions of this Agreement,
unless the result thereof would be unreasonable, in which case the parties
hereto shall negotiate in good faith as to appropriate amendments hereto.
16.8. FILING. A copy of this Agreement and of all amendments thereto
shall be filed at the principal executive office of the Company with the
transfer agent for the Common Stock of the Company.
16.9. TERMINATION. This Agreement may be terminated at any time by a
written instrument signed by the parties hereto. Unless sooner terminated in
accordance with the preceding sentence, this Agreement (other than SECTION 8
hereof) shall terminate in its entirety at the earlier of (i) such date as there
shall be no Registrable Securities outstanding or (ii) the eighth anniversary of
the date hereof, PROVIDED that any shares of Common Stock previously subject to
25
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
this Agreement shall not be Registrable Securities following the sale of any
such shares in an offering registered pursuant to this Agreement.
16.10. ATTORNEYS' FEES. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees (including any fees incurred in any appeal) in
addition to its costs and expenses and any other available remedy.
16.11. NO THIRD PARTY BENEFICIARIES. Nothing herein expressed or
implied is intended to confer upon any person, other than the parties hereto or
their respective permitted assigns, successors, heirs and legal representatives,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.
26
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
[EXECUTION COPY]
AGREEMENT TO BE BOUND
BY THE REGISTRATION RIGHTS AGREEMENT
The undersigned, being the transferee of ___________ shares of the
common stock, $.001 par value per share [or describe other capital stock
received in exchange for such common stock] (the "Registrable Securities"), of
American Psych Systems Holdings, Inc., a Delaware corporation (the "Company"),
as a condition to the receipt of such Registrable Securities, acknowledges that
matters pertaining to the registration of such Registrable Securities is
governed by the Amended and Restated Registration and Shareholders Rights
Agreement dated as of September 15, 2000 among the Company and the Holders
referred to therein (the "Agreement"), and the undersigned hereby (1)
acknowledges receipt of a copy of the Agreement, and (2) agrees to be bound as a
Holder by the terms of the Agreement, as the same has been or may be amended
from time to time.
Agreed to this __ day of ____________________, ____________________.
---------------------------------
*
---------------------------------
*
---------------------------------
*Include address for notices.
4
[EXECUTION COPY]
SCHEDULE I
TO REGISTRATION RIGHTS AGREEMENT
HOLDER: SHARES, WARRANT SHARES AND WARRANTS
--------------------------------------------------------------------------------
CANPARTNERS INVESTMENTS IV, LLC 750,000 Shares
1,183,928 Warrant Shares
Address:
c/o Canyon Partners Incorporated
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Telecopy: 310/247-2701
--------------------------------------------------------------------------------
NAZEM & Company IV, L.P. 38,691 Warrants
Address:
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
--------------------------------------------------------------------------------
TRANSATLANTIC VENTURE PARTNERS, C.V. 77,381 Warrants
Address:
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
--------------------------------------------------------------------------------
5
[EXECUTION COPY]
IN WITNESS WHEREOF the undersigned have executed this Agreement as
of the date first written above.
THE COMPANY:
AMERICAN PSYCH SYSTEMS
HOLDINGS, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx, M.D.
-------------------------------
Xxxxxxx X. Xxxxxxx, M.D.
President
HOLDERS:
CANPARTNERS INVESTMENTS IV, LLC, NAZEM & COMPANY IV, L.P.,
a California limited liability company a Delaware limited partnership
By: Canpartners Incorporated, By: Nazem & Associates IV, L.P.,
a California corporation, a Delaware limited partnership,
its managing member its general partner
By: By: /s/ Xxxxxx Xxxxx
------------------------- ----------------------------
Name: Name: Xxxxxx Xxxxx
Title: General Partner
TRANSATLANTIC VENTURE PARTNERS,
C.V.,
a Netherlands Antilles limited partnership
By: The Banexi-Nazem Transatlantic
Venture Fund N.V.,
a Netherlands Antilles corporation,
its general partner
By: /s/ Xxxxxx Xxxxx
-------------------------
Name: Xxxxxx Xxxxx
Authorized Officer
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
SIGNATURE PAGE l of 2
[EXECUTION COPY]
THE STOCKHOLDERS:
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxx Xxxxxxx
------------------------------ ---------------------------------
XX. XXXXXXX X. XXXXXXX XXXX XXXXXXX
NAZEM & COMPANY IV, L.P., XXXXXXXX PARTNERS, L.P.
a Delaware limited partnership
By: Nazem & Associates IV, L.P., By: /s/ Xxxxx Xxxxxxxxxx
a Delaware limited partnership, ----------------------------
its General Partner Name: Xxxxx Xxxxxxxxxx
General Partner
By: /s/ Xxxxxx Xxxxx
-------------------------
Name: Xxxxxx Xxxxx
General Partner
WOODLAND PARTNERS SENECA VENTURES
By: /s/ Xxxxx Xxxxxxxxxx By: /s/ Xxxxx Xxxxxxxxxx
------------------------- ----------------------------
Name: Xxxxx Xxxxxxxxxx Name: Xxxxx Xxxxxxxxxx
Title: General Partner General Partner
WOODLAND VENTURE FUND OXFORD HEALTH PLAN, INC.
By: /s/ Xxxxx Xxxxxxxxxx By: /s/ Xxxxxxx X. Xxxx
------------------------- ----------------------------
Name: Xxxxx Xxxxxxxxxx Name: Xxxxxxx X. Xxxx
General Partner Title: Executive Vice President
PSYCH SYSTEMS HOLDINGS
REGISTRATION RIGHTS AGREEMENT
SIGNATURE PAGE 2 of 2
