REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of August 26, 2002, between
Pipeline Data Inc., a Delaware corporation (the "Company"), and each of the
stockholders of the Company set forth in Exhibit A hereto (the "Stockholders").
WHEREAS, this Agreement has been entered into in connection with an
Acquisition Agreement, dated as of August 26, 2002 (the "Acquisition
Agreement"), among the Company, Northern Merchants Services, Inc. a New York
corporation and the Stockholders.
NOW, THEREFORE, it is agreed as follows:
1. DEFINED TERMS. Each of the following terms shall have the following
meanings (such definitions to be applicable to both the plural and singular of
the terms defined):
(a) REGISTERABLE SECURITIES. The term "Registerable Securities" shall
mean the shares of common stock of the Company or shares as converted into
common stock of the Company ("Common Stock") listed on Exhibit A received
by the Stockholders pursuant to the Acquisition Agreement, and any other
securities received in connection with any stock split, stock dividend,
merger, reorganization, recapitalization, reclassification or other
distribution payable or issuable upon such shares of Common Stock. For the
purposes of this Agreement, securities will cease to be Registerable
Securities when (A) a registration statement under the Securities Act of
1933, as amended (the "Securities Act"), covering such Registerable
Securities has been declared effective by the Securities and Exchange
Commission and such registration statement has been continuously effective
for a period of nine (9) months, (B) such Registerable Securities are
distributed to the public pursuant to the Securities Act or pursuant to an
exemption from the registration requirements of the Securities Act,
including, but not limited to, Rules 144 and 145 promulgated under the
Securities Act, or (C) such Registerable Securities have been otherwise
transferred and the Company, in accordance with applicable law and
regulations, has delivered new certificates or other evidences of ownership
for such securities which are not subject to any stop transfer order or
other restriction on transfer.
(b) RIGHTSHOLDERS. The term "Rightsholders" shall include the
Stockholders, all successors and assigns of the Stockholders, and all
transferees of Registerable Securities where such transfer is accordance
with law and affirmatively includes the transfer and assignment of the
rights and obligations of the transferor Rightsholder under this Agreement
with respect to the transferred Registerable Securities.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and subsection,
paragraph, clause, schedule and exhibit references are to this Agreement
unless otherwise specified.
(d) Capitalized terms used herein but not otherwise defined shall have
the meanings given to them in the Acquisition Agreement.
2. REGISTRATION RIGHTS.
(a) RIGHT TO PIGGY-BACK REGISTRATION. If at any time on or after the
Closing Date the Company proposes to file a registration statement under
the Securities Act with respect to an offering by the Company or any other
party of any class of equity security similar to any Registerable
Securities (other than a registration statement on Form S-4 or S-8 or any
successor form or a registration statement filed solely in connection with
an exchange offer, a business combination transaction or pursuant to any
employee benefit plans of the Company), then the Company, on each such
occasion, shall give written notice (each, a "Company Piggy-Back Notice")
of such proposed filing to all of the Rightsholders owning Registerable
Securities at least 20 days before the anticipated filing date of such
registration statement, and such Company Piggy-Back Notice also shall be
required to offer to such Rightsholders the opportunity to register such
aggregate number of Registerable Securities as each such Rightsholder may
request. Each such Rightsholder shall have the right, exercisable for the
10 days immediately following the giving of the Company Piggy-Back Notice,
to request, by written notice (each, a "Holder Notice") to the Company, the
inclusion of all or any portion of the Registerable Securities of such
Rightsholders in such registration statement. The Company shall use
reasonable efforts to cause the managing underwriter(s) of a proposed
underwritten offering to permit the inclusion of the Registerable
Securities which were the subject of all Holder Notices in such
underwritten offering on the same terms and conditions as any similar
securities of the Company included therein. Notwithstanding anything to the
contrary contained in this Paragraph 2(b), if the managing underwriter(s)
of such underwritten offering or any proposed underwritten offering
delivers a written opinion to the Rightsholders of Registerable Securities
which were the subject of all Holder Notices that the total amount and kind
of securities which they, the Company and any other person intend to
include in such offering is such as to materially and adversely affect the
success of such offering, then the amount of securities to be offered for
the accounts of such Rightsholders and persons other than the Company shall
be eliminated or reduced pro rata (based on the amount of securities owned
by such Rightsholders and other persons which carry registration rights) to
the extent necessary to reduce the total amount of securities to be
included in such offering to the amount recommended by such managing
underwriter(s) in its written opinion.
(b) EXPENSES. Subject to the provisions of Section 4 hereof, the
Company will pay all Registration Expenses in connection with any
registration of Registerable Securities effected pursuant to this Section
2, but the Company shall not be responsible for the payment of any
underwriter's discount, commission or selling concession in connection
therewith.
(c) WITHDRAWAL OR SUSPENSION OF REGISTRATION STATEMENT.
Notwithstanding anything contained to the contrary in this Section 2(b),
the Company shall have the absolute right, whether before or after the
giving of a Company Piggy-Back Notice or Holder Notice, to determine not to
file a registration statement to which the Rightsholders shall have the
right to include their Registerable Securities therein pursuant to this
Section 2(b), to withdraw such registration statement or to delay or
suspend pursuing the effectiveness of such registration statement. In the
event of such a determination after the giving of a Company Piggy-Back
Notice, the Company shall give notice of such determination to all
Rightsholders and, thereupon, (i) in the case of a determination not to
register or to withdraw such registration statement, the Company shall be
relieved of its obligation under this Section 2 to register any of the
Registerable Securities in connection with such registration and (ii) in
the case of a determination to delay the registration, the Company shall be
permitted to delay or suspend the registration of Registerable Securities
pursuant to this Section 2 for the same period as the delay in the
registration of such other securities. No registration effected under this
Section 2(b) shall relieve the Company of its obligation to effect any
registration upon demand otherwise granted to a Rightsholder under any
other agreement with the Company. However, it is acknowledge and agreed to
by the parties that this agreement grants no demand rights to the
Stockholders.
3. REGISTRATION PROCEDURES.
(a) OBLIGATIONS OF THE COMPANY. The Company will, in connection with the
registration pursuant to Section 2 hereof:
(i) Prepare and file with the Commission a registration statement
under the Securities Act on any appropriate form chosen by the Company, in
its sole discretion, which shall be available for the sale of all
Registerable Securities to be included for sale in accordance with the
intended method(s) of distribution thereof and use its commercially
reasonable efforts to cause such registration statement to become effective
as soon thereafter as reasonably practicable; provided, that after such
filing, the Company shall, as diligently as practicable, provide to each
Rightsholder such number of copies of such registration statement, each
amendment and supplement thereto, the prospectus included in such
registration statement (including each preliminary prospectus), all
exhibits thereto and documents incorporated by reference therein and such
other documents as such Rightsholder may reasonably request in order to
facilitate the disposition of the Registerable Securities owned by such
Rightsholder and included in such registration statement.
(ii) prepare and file with the Commission such amendments and
post-effective amendments to a registration statement as may be necessary
to keep such registration statement effective for up to nine months; and
cause the related prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed to the extent required
pursuant to Rule 424 promulgated under the Securities Act, during such
nine-month period; and otherwise comply with the provisions of the
Securities Act with respect to the disposition of all Registerable
Securities covered by such registration statement during the applicable
period in accordance with the intended method(s) of disposition of such
Registerable Securities set forth in such registration statement,
prospectus or supplement to such prospectus;
(iii) notify the Rightsholders whose Registerable Securities are
included in such registration statement and the managing underwriter(s), if
any, of an underwritten offering of any of the Registerable Securities
included in such registration statement, and confirm such advice in
writing, (A) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and, with respect to a
registration statement or any post-effective amendment, when the same has
become effective, (B) of any request by the Commission for amendments or
supplements to a registration statement or related prospectus or for
additional information, (C) of the issuance by the Commission of any stop
order suspending the effectiveness of a registration statement or the
initiation of any proceedings for that purpose, (D) if at any time the
representations and warranties of the Company contemplated by clause (A) of
Paragraph 3(a)(viii) hereof cease to be true and correct, (E) of the
receipt by the Company of any notification with respect to the suspension
of the qualification of any of the Registerable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose and (F) of the happening of any event which makes any statement
made in the registration statement, the prospectus or any document
incorporated therein by reference untrue or which requires the making of
any changes in the registration statement or prospectus so that such
registration statement, prospectus or document incorporated by reference
will not contain any untrue statement of material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(iv) make reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of such registration statement at the earliest
possible moment and to prevent the entry of such an order;
(v) use reasonable efforts to register or qualify the Registerable
Securities included in such registration statement under such other
securities or blue sky laws of such jurisdictions as any Rightsholder whose
Registerable Securities are included in such registration statement
reasonably requests in writing and do any and all other acts and things
which may be necessary or advisable to enable such Rightsholder to
consummate the disposition in such jurisdictions of such Registerable
Securities; provided, that the Company will not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise
be required to qualify but for this Paragraph 3(a)(v), (B) subject itself
to taxation in any such jurisdiction or (C) take any action which would
subject it to general service of process in any such jurisdiction;
(vi) cooperate with the Rightsholder whose Registerable Securities are
included in such registration statement and the managing underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Registerable Securities to be sold thereunder, and enable such
Registerable Securities to be in such denominations and registered in such
names as such Rightsholder or any managing underwriter(s) may reasonably
request at least two business days prior to any sale of Registerable
Securities;
(vii) comply with all applicable rules and regulations of the
Commission and promptly make generally available to its security holders an
earnings statement covering a period of twelve months commencing, (A) in an
underwritten offering, at the end of any fiscal quarter in which
Registerable Securities are sold to underwriter(s), or (B) in a
non-underwritten offering, with the first month of the Company's first
fiscal quarter beginning after the effective date of such registration
statement, which earnings statement in each case shall satisfy the
provisions of Section 11(a) of the Securities Act;
(viii) enter into such customary agreements (including an underwriting
agreement in customary form) and take all such other actions reasonably
requested by the Rightsholders holding a majority of the Registerable
Securities included in such registration statement or the managing
underwriter(s) in order to expedite and facilitate the disposition of such
Registerable Securities and in such connection, if an underwriting
agreement is entered into and if the registration is an underwritten
registration, (A) make such representations and warranties, if any, to any
underwriter(s) with respect to the registration statement, prospectus and
documents incorporated by reference, if any, in form, substance and scope
as are customarily made by issuers to underwriter(s) in underwritten
offerings and confirm the same if and when requested, (B) obtain opinions
of counsel to the Company and updates thereof addressed to each such
underwriter(s), if any, with respect to the registration statement,
prospectus and documents incorporated by reference, if any, covering the
matters customarily covered in opinions requested in underwritten offerings
and such other matters as may be reasonably requested by such
underwriter(s), (C) obtain a "cold comfort" letter and updates thereof from
the Company's independent certified public accountants addressed to the
underwriter(s), if any, which letters shall be in customary form and cover
matters of the type customarily covered in "cold comfort" letters by
accountants in connection with underwritten offerings, and (D) deliver such
documents and certificates as may be reasonably requested by the managing
underwriter(s), if any, to evidence compliance with any customary
conditions contained in the underwriting agreement or other agreement
entered into by the Company; each such action required by this Paragraph
3(a)(viii) shall be done at each closing under such underwriting or similar
agreement or as and to the extent required thereunder; and
(ix) if requested by the holders of a majority of the Registerable
Securities included in such registration statement, use its commercially
reasonable best efforts to cause all Registerable Securities which are
included in such registration statement to be listed, subject to notice of
issuance, by the date of the first sale of such Registerable Securities
pursuant to such registration statement, on each securities exchange, if
any, on which securities similar to the Registered Securities are listed.
(b) OBLIGATIONS OF RIGHTSHOLDERS. In connection with any registration of
Registerable Securities of a Rightsholder pursuant to Section 2 hereof:
(i) The Company may require that each Rightsholder whose Registerable
Securities are included in such registration statement furnish to the
Company such information regarding the distribution of such Registerable
Securities and such Rightsholder as the Company may from time to time
reasonably request in writing; and
(ii) Each Rightsholder, upon receipt of any notice from the Company of
the happening of any event of the kind described in clauses (B), (C), (E)
and (F) of Paragraph 3(a)(iii) hereof, shall forthwith discontinue
disposition of Registerable Securities pursuant to the registration
statement covering such Registerable Securities until such Rightsholder's
receipt of the copies of the supplemented or amended prospectus
contemplated by clause (A) of Paragraph 3(a)(iii) hereof, or until such
Rightsholder is advised in writing (the "Advice") by the Company that the
use of the applicable prospectus may be resumed, and until such
Rightsholder has received copies of any additional or supplemental filings
which are incorporated by reference in or to be attached to or included
with such prospectus, and, if so directed by the Company, such Rightsholder
will deliver to the Company (at the expense of the Company) all copies,
other than permanent file copies then in the possession of such
Rightsholder, of the current prospectus covering such Registerable
Securities at the time of receipt of such notice; the Company shall have
the right to demand that such Rightsholder or other holder verify its
agreement to the provisions of this Paragraph 3(b)(ii) in a document
executed by the Rightsholder.
4. REGISTRATION EXPENSES. All expenses incident to the performance of or
compliance with this Agreement by the Company, including, without imitation, all
registration and filing fees of the Commission, National Association of
Securities Dealers, Inc. and other agencies, fees and expenses of compliance
with securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications of the Registerable
Securities), rating agency fees, printing expenses, messenger and delivery
expenses, internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the fees and expenses incurred in connection with the listing, if any, of the
Registerable Securities on any securities exchange or market and fees and
disbursements of counsel for the Company and the Company's independent certified
public accountants (including the expenses of any special audit or "cold
comfort" letters required by or incidental to such performance), Securities Act
or other liability insurance (if the Company elects to obtain such insurance),
the fees and expenses of any special experts retained by the Company in
connection with such registration and the fees and expenses of any other person
retained by the Company (but not including any underwriting discounts or
commissions attributable to the sale of Registerable Securities or other
out-of-pocket expenses of the Rightsholders, or the agents who act on their
behalf, unless reimbursement is specifically approved by the Company) will be
borne by the Company. All such expenses are herein referred to as "Registration
Expenses."
5. INDEMNIFICATION: CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
hold harmless, to the full extent permitted by law, each Rightsholder, its
officers and directors, and its legal counsel, accountants, and underwriters,
and each person who controls such Rightsholder (within the meaning of the
Securities Act), if any, and any agent thereof, against all losses, claims,
damages, liabilities and expenses (including reasonable attorney's fees and
expenses of investigation) incurred by such party pursuant to any actual or
threatened suit, action, proceeding or investigation to which they may be
subject under the Securities Act or any other federal or any state securities
laws, arising out of or based upon (i) any untrue or alleged untrue statement of
a material fact contained in any registration statement, prospectus or
preliminary prospectus, (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except insofar as the same arise out of or are based upon, any such
untrue statement or omission based upon information with respect to such
Rightsholder furnished in writing to the Company by such Rightsholder expressly
for use therein or (iii) any violation or alleged violation by the Company of
the Securities Act, the Exchange Act, any state securities laws or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities laws relating to the Registration Statement.
(b) INDEMNIFICATION BY RIGHTSHOLDER. In connection with any registration
statement in which a Rightsholder is participating, each such Rightsholder will
be required to furnish to the Company in writing such information with respect
to such Rightsholder as the Company reasonably requests for use in connection
with any such registration statement or prospectus, and each Rightsholder agrees
to the extent it is such a holder of Registerable Securities included in such
registration statement, and each other such holder of Registerable Securities
included in such Registration Statement will be required to agree, to indemnify,
to the full extent permitted by law, the Company, the directors and officers of
the Company and each person who controls the Company (within the meaning of the
Securities Act) any agent thereof, its legal counsel, accountants and
underwriters, against any losses, claims, damages, liabilities and expenses
(including reasonable attorney's fees and expenses of investigation) incurred by
such party pursuant to any actual or threatened suit, action, proceeding or
investigation to which they may be subject under the Securities Act or any other
federal or any state securities laws, arising out of or based upon (i) any
untrue or alleged untrue statement of a material fact or any omission or alleged
omission of a material fact necessary, to make the statements contained in any
registration statement, prospectus, or preliminary prospectus (in the case of a
prospectus, in the light of the circumstances under which they are made) not
misleading, to the extent, but only to the extent, that such untrue statement or
omission is based upon information relating to such Rightsholder or other holder
furnished in writing to the Company expressly for use therein or (ii) any
violation or alleged violation by such Rightsholder of the Securities Act, the
Exchange Act, any state securities laws or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities laws relating
to the Registration Statement.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after receipt by an
indemnified party under this Section 5 of written notice of the commencement of
any action, proceeding, suit or investigation or threat thereof made in writing
for which such indemnified party may claim indemnification or contribution
pursuant to this Agreement, such indemnified party shall notify in writing the
indemnifying party of such commencement or threat; but the omission so to notify
the indemnifying party shall not relieve the indemnifying party from any
liability which the indemnifying party may have to any indemnified party (i)
hereunder, unless the indemnifying party is actually prejudiced thereby, or (ii)
otherwise than under this Section 5. In case any such action, suit or proceeding
shall be brought against any indemnified party, and the indemnified party shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and the indemnifying party shall
assume the defense thereof, with counsel reasonably satisfactory to the
indemnified party, and the obligation to pay all expenses relating thereto. The
indemnified party shall have the right to employ separate counsel in any such
action, suit or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party has agreed to pay such fees and
expenses, (ii) the indemnifying party shall have failed to assume the defense of
such action, suit or proceeding or to employ counsel reasonably satisfactory to
the indemnified party therein or to pay all expenses relating thereto or (iii)
the named parties to any such action or proceeding (including any impleaded
parties) include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that there may be one or
more legal defenses available to the indemnified party which are different from
or additional to those available to the indemnifying party and which may result
in a conflict between the indemnifying party and such indemnified party (in
which case, if the indemnified party notifies the indemnifying party in writing
that the indemnified party 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 or proceeding on behalf of the indemnified
party; it being understood, however, that the indemnifying party shall not, in
connection with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys at
any time for all indemnified parties, which firm shall be designated in writing
by the indemnified party).
(d) CONTRIBUTION. If the indemnification provided for in this Section 5
from the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnifying party on the one hand and the
indemnified party on the other but also the relative fault of the indemnifying
party and indemnified party, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and the
indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitation set forth in Section 5(e), any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Paragraph 5(d) 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 clauses (i) and (ii) of the
immediately preceding paragraph. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) LIMITATION. Anything to the contrary contained in this Section 5(e)
notwithstanding, no holder of Registerable Securities shall be liable for
indemnification and contribution payments aggregating an amount in excess of the
maximum amount received by such holder in connection with any sale of
Registerable Securities as contemplated herein.
(f) SURVIVAL. The obligations of the Company and the Rightsholders under
this Section 5 shall survive the completion of any offering of Registerable
Securities in a registration statement under this Agreement.
6. PARTICIPATION IN UNDERWRITTEN REGISTRATION. No Rightsholder may
participate in any underwritten registration hereunder unless such Rightsholder
(i) agrees to sell such Rightsholder's securities on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and to comply with Regulation M under the Exchange Act and
(ii) completes and executes all questionnaires, appropriate and limited powers
of attorney, escrow agreements, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting arrangement;
provided, that all such documents shall be consistent with the provisions of
Section 3 hereof.
7. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8. ENTIRE AGREEMENT . This Agreement and the documents and instruments and
other agreements among the parties hereto as contemplated by or referred to
herein, (a) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof and (b) are not intended to confer upon any other person any rights or
remedies hereunder, except as set forth herein.
9. SEVERABILITY . In the event that any provision of this Agreement or the
application thereof becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
10. GOVERNING LAW . This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
Each of the parties hereto irrevocably consents to the exclusive jurisdiction of
any state or federal court within the State of New York, in connection with any
matter based upon or arising out of this Agreement or the matters contemplated
herein, agrees that process may be served upon them in any manner authorized by
the laws of the Commonwealth of Massachusetts for such persons and waives and
covenants not to assert or plead any objection which they might otherwise have
to such jurisdiction and such process.
11. ASSIGNMENT. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties. Notwithstanding the foregoing, the rights to cause the
Company to register Registerable Securities pursuant to Section 2 may be
assigned (but only with all related obligations) by a Rightsholder to a
transferee or assignee of such securities that (i) is a subsidiary, parent,
partner, limited partner, retired partner or stockholder of a Rightsholder, (ii)
is a Rightsholder's spouse or member of such Rightsholder's immediate family, or
a custodian, trustee (including a trustee of a voting trust), executor or other
fiduciary for the account of the Rightsholder's spouse or members of the
Rightsholder's immediate family, a trust for the Rightsholder's own self, a
charitable remainder trust or an entity that is controlled by one or more of the
Rightsholder's immediate family, or (iii) after such assignment or transfer,
holds at least 25,000 shares of Registerable Securities (subject to appropriate
adjustment for stock splits, stock dividends, combinations and other
recapitalizations), provided; (a) the Company is, within a reasonable time after
such transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; (b) such transferee or assignee agrees
in writing to be bound by and subject to the terms and conditions of this
Agreement, including without limitation the provisions of Section 2; and (c)
such assignment shall be effective only if immediately following such transfer
the further disposition of such securities by the transferee or assignee is
restricted under the Securities Act.
12. AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented
without the written consent of each of the parties hereto. Any of the
Stockholders or the Company may, by written notice to the others, (i) waive any
of the conditions to its obligations hereunder or extend the time for the
performance of any of the obligations or actions of the other, (ii) waive any
inaccuracies in the representations of the other contained in this Agreement or
in any documents delivered pursuant to this Agreement, (iii) waive compliance
with any of the covenants of the other contained in this Agreement and (iv)
waive or modify performance of any of the obligations of the other. No action
taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action or compliance with any representation,
warranty, condition or agreement contained herein. Waiver of the breach of any
one or more provisions of this Agreement shall not be deemed or construed to be
a waiver of other breaches or subsequent breaches of the same provisions.
13. NOTICES. All notices, demands, requests, demands and other
communications required or otherwise given under this Agreement shall be in
writing and shall be deemed to have been duly given if: (a) delivered by hand
against written receipt therefor, (b) forwarded by a third party company or
governmental entity providing delivery services in the ordinary course of
business which guarantees delivery the following business day, (c) mailed by
registered or certified mail, return receipt requested, postage prepaid, or (d)
transmitted by facsimile transmission electronically confirmed for receipt, in
full, by the other party no later than 5:00 p.m., local time, on the date of
transmission, addressed as follows (i) If to the Company, to Pipeline Data Inc.
000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 00, Xxxxxxxx, Xxx Xxxx, Attention: Xxxx
Xxxxxxxxxx; and (ii) if to the Stockholders, to the respective address set forth
on the signature pages hereof, or (iii) in the case of any of the parties
hereto, at such other address as such party shall have furnished to each of the
other parties hereto in accordance with this Section 13. Each such notice,
demand, request or other communication shall be deemed given (i) on the date of
such delivery by hand, (ii) on the first business day following the date of such
delivery to the overnight delivery service or facsimile transmission or (iii)
three business days following such mailing.
14. OTHER REMEDIES. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
15. FURTHER ASSURANCES. Each party hereto covenants and agrees with all
other parties hereto to promptly execute, deliver, file and/or record such
agreements, instruments, certificates and other documents and to do and perform
such other and further acts and things as any other party hereto may reasonably
request or as may otherwise be necessary or proper to consummate and perfect the
transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by themselves or their duly authorized respective officers, all as of the
date first written above.
PIPELINE DATA INC.
By: /s/ XxxXxxxxxxx Xxxxx
Name: XxxXxxxxxxx Xxxxx
Title: Chief Executive Officer
[SEE ATTACHED STOCKHOLDER COUNTERPART SIGNATURE PAGES]
Exhibit A
Counterpart Signature Page for Stockholders
The undersigned hereby agrees to become a party to that certain
Registration Rights Agreement dated as of August 26, 2002 between Pipeline
Data Inc. and each of the parties listed on Exhibit A who have executed a
Counterpart Signature Page to the Registration Rights Agreement.
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
( 500,000 Shares)
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
( 500,000 Shares)
